Currency Linked Deposit
A currency-linked deposit is a structured investment product that involves derivatives. The deposit is linked with the currency option and aims to offer income on investment to meet currency needs. A client may choose any currency as the base and linked currency � USD, GBP, EUR, CAD, AUD, JPY or HKD. A currency-linked deposit is only suitable for those who understand the product, with considerable investment experience and specific investment objectives. Standardized contracts are available, but may also be customized to suit the client�s specific needs.
A currency-linked deposit is considered to be different from the conventional time deposit. It is a structured investment product that may involve a considerable amount of market risk and is subject to exchange rate fluctuation. In a currency-linked deposit, the principal amount invested is not protected. The return is based on prevailing market conditions at the time and date of fixing. For example, if the value of the linked currency depreciates, then customers are likely to suffer a loss. In extreme cases, the customer may also risk losing the entire principal amount.