Premium Currency Investment

When it comes to potentially gaining higher yields with maximum control, Premium Currency Investment puts you in the driver's seat. Now you can:

Enjoy higher interest rates
Get potential gains from foreign currency movements
Maximise your money-making opportunities with tenors as short as one week

All you have to do:

Choose a base currency
Choose another currency as your alternate currency
Decide on your placement tenor
Agree on a Target Conversion Rate (TCR) to be applied between the two currencies

Premium Currency Investment is ideal for you when:

You wish to enjoy higher interest rates on your funds and don't mind receiving your money in either the base or alternate currency as you have need of both the currencies. For example, if you have to pay for the tuition fees of your child who is studying overseas.
You feel that you are holding a currency that may be weakening against an alternate currency. You can use this opportunity to receive a higher interest rate which may act as a buffer against the fall in value of the currency you are holding.

Why you should choose premium currency investment

Higher interest rates and flexible deposit options

You stand to gain an interest rate considerably higher than that of a conventional fixed deposit. And you are free to choose your currency pairs as well as set the TCR at a level you are comfortable with.

Better pricing and service

We provide real-time pricing for Premium Currency Investment. This, coupled with the fact that we trade till 7pm, gives you greater flexibility and more time to make better informed investment decisions.

Sound analysis

In Bloomberg surveys, our Foreign Exchange Strategy team has consistently emerged top for forecasting accuracy. With us, you know you are getting sound analyses.

Wider choice, shorter tenors and lower minimum deposits

Your investment can be as small as SGD50,000 (or equivalent), while larger amounts can be placed for tenors of just one week. And with over 60 currency pairs to select from, you are more in control of your investment.

How It Works

Let's assume you have funds of SGD100,000

You do not mind holding AUD

Let's say the Spot Exchange Rate between these two currencies is 1.2200. However, preferring to be more conservative you set a Target Conversion Rate (TCR) of 1.2150

As you would not be using the funds in the next month, you choose a tenor of 1 month

At this stage, we will inform you of the guaranteed interest rate that you will enjoy. In this case, let's assume it is 8% p.a.

On Fixing Day (two business days before maturity), it will be determined if your funds plus the guaranteed interest will be repaid in SGD or AUD

Scenario 1

SGD weakens against AUD, compared to the TCR you have set. It now trades at 1.2250.

You will receive:
Your Funds
+
one-month's interest in SGD

Which is:
100,000
+
(1/12 x 8% x 100,000)
= SGD100,667*

The actual profit/shortfall is dependent on the spot SGD/AUD at expiration

Scenario 2

SGD strengthens against AUD beyond the TCR you have set. It now trades at 1.2050.

You will receive:
Your Funds
+
one month's interest in AUD converted at TCR of 1.2150.

Which is:
(100,000 + 667) ÷ 1.2150
= AUD82,853+
(if converted at SGD/AUD spot of 1.2050 at expiry, SGD equivalent is SGD99,838+, a shortfall of SGD162+)

What are your available options if your SGD is converted into AUD?

1. You can put your AUD into an ordinary fixed deposit account to enjoy an interest rate that is usually higher than most SGD fixed deposit accounts.

2. You can wait for the AUD to appreciate back to 1.2150 or higher. You can then decide if you want to convert the funds back to SGD.

3. You can remit the funds to Australia , e.g. to pay for your child's tuition fees.

4. You can open another Premium Currency Investment account with AUD as your base currency and SGD as the alternate currency, to earn another round of higher interest rate. You may again set the TCR at the same level of 1.2150.

To find out how you can take advantage of the currency market, speak to us today.
Click here to contact us, or call 1800 747 7000

Premium Currency Investment is not a deposit but an investment product. Unlike traditional deposits, Premium Currency Investment has an investment element and returns may vary. The returns on Premium Currency Investment will be dependent, to at least some extent, on movements in specified currency exchange rates. A wide range of factors, including national and international financial and economic conditions and political and natural events, affects currency exchange rates. The effect of normal market forces may at times be discounted by interventions of central banks and other bodies including foreign exchange controls being imposed. At times, the exchange rates and prices linked to such rates may rise or fall sharply. Such rise and fall in rates can result in the loss of the principal sum (in comparison with the amount of the base currency initially deposited/invested) if the proceeds are paid at maturity in the alternate currency.

A dual currency investment involves a currency option, which confers on the deposit-taking institution the right to repay the principal sum at maturity in either the base or alternate currency, and part or all of the interest earned on this investment represents the premium on this option. By purchasing this dual currency investment you are giving the issuer of this product the right to repay you at a future date in an alternate currency that is different from the currency in which your initial investment was made, regardless of whether you wish to be repaid in this currency at that time.

This document does not constitute any recommendation that any person enters into any transaction described or any similar transaction and must be read in conjunction with the Currency Linked Account Agreement. You may wish to seek advice from a licensed or an exempt financial adviser before making any commitment to invest in this product. In the event that you choose not to seek advice from a licensed or exempt financial adviser, you should carefully consider whether this product is suitable for you.