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Home>Investments>Citibank Premium Account |
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Premium Account is an investment product with foreign exchange option, which is composed by foreign currency time deposit and foreign exchange option. |
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When investing in a Premium Account, timing, choice of currencies and your personal investment preference are crucial. You may find a Citibank Premium Account suitable for you under the following circumstances: |
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- You wish to receive a higher interest rate as compared to a traditional time deposit and you are comfortable holding either the base or the alternate currency.
- You are waiting to buy another currency for investment, diversification, business or are planning to send your children overseas. You can earn a higher interest rate as compared to a traditional time deposit while waiting to buy the alternate currency at your preferred Strike Price.
- You are holding the view that your base currency will weaken further.In view of that, the higher interest rate earned may buffer you against adverse foreign exchange movements and you are likely to have a higher chance of receiving your principal and interest back in your base currency that is weakening.
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In the meantime, you may need to aware that Premium Account is an investment product and the returns may vary. The product is subject to a number of risks. Before you open a Premium Account, Citibank will help you fully understand your investment goal and risk tolerance level through an individual risk profiling. Based on the result, you can work out an appropriate investment plan with your relationship manager. |
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Advantages of Premium Account: |
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- An opportunity to earn potentially higher interest than a time deposit of the same tenure;
- A wide selection of currencies;
- Flexible tenures that cater to your specific needs;
- An opportunity to diversify into a second currency of your choice at your pre-agreed rate.
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Upon opening a Premium Account, the investor needs to decide the investment amount of the base currency (the currency he/she is holding for the time being), investment tenure and another foreign currency as alternate currency for the option sold to the bank and a predetermined exchange rate. Upon maturity, the bank will decide whether to pay the investor in base currency or to convert into the alternate currency at predetermined exchange rate. |
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Risk Class requirement for PA is level 2. |
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Foreign Exchange Trinity |
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Note: Investment product is not a deposit and subject to investment risk. The investor should act prudently. |
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The following data are simulated data. |
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The following examples show the calculation of the potential investment returns on Premium Account. The hypothetical Spot Rates, Interest rate and Return shown in the following examples are only for illustrative purposes regarding structure mechanics for calculating the potential return of Premium Account. The levels / movement / trends shown have no reference to historical data and do not represent actual or future performance: |
Base Currency: |
USD100, 000 |
Alternate Currency: |
AUD |
Tenure:
| 1 month (31 days) |
Strike Price: |
AUD/USD: 0.9600 |
(Assuming the current market for AUD/USD is 0.9700 and investor does not mind diversifying into AUD at a preferred price of 0.9600) |
USD 1-month tenure Time Deposit Rate (p.a.) |
0.25% |
Option Return Rate (p.a.) |
7.75% |
Total Investment Return Rate (p.a.) |
8% |
Transaction Date: |
Jan 04, 20XX |
Value Date: |
Jan 11, 20XX |
Expiry Date: |
Feb 04, 20XX |
Maturity Date: |
Feb 06, 20XX |
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(The dates will be adjusted to a trading date if it comes across a non-trading date). |
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Scenario 1 |
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Scenario 2 |
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AUD/USD on
Expiry Date |
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1.0000 USD weaker
compared to Strike
Price of 0.9600 |
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0.9400 USD stronger or
equal to compared to
Strike Price of 0.9600 |
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Payout Currency |
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Principal and Return
will be paid in USD |
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Principal and Return
will be paid in AUD |
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Principal + return
received upon maturity |
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USD100, 688.89
(= USD100, 000 +
USD100, 000 x 8.00% x
31 / 360) |
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AUD104, 884.26
(= USD 100, 688.89 / 0.9600)
If converted to USD at 0.9400,
the amount is equivalent to
98, 591.20 ( = AUD 104, 884.26 x
0.9400) which is less than the principal amount. |
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Upon maturity, the principal and return will be paid in currency which is weaker compared to strike price on expiry date. If AUD/USD on expiry date is equal to strike price, it is the right of the bank to decide to pay investor USD100,688.89 or AUD104,884.26 as principal and return. |
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Note: |
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- All listed examples do not take tax into consideration. The bank reserves the right to deduct any tax from the investor account(s) according to any China law, and/or any requests from the relevant tax authorities.
- All interest rates and return rates listed in the hypothetical example are for illustrations only, and do not represent any of historical, actual and future performance.
- Option return and Interest rate (p.a.) for GBP, SGP and HKD are calculated on 365-day yearly basis, all other currencies are calculated based on a 360-day convention.
- The Premium Account or any part of it hereof shall not be withdrawn before the pre-determined maturity date.
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Minimum investment amount: RMB 100,000 equivalent. |
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Investment tenure: 1 week, 2 weeks, 3 weeks, 5 weeks, 1 month, 2 months, 3 months, 6 months. |
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Investment Currency: USD, AUD, NZD, EUR, GBP, JPY, CAD, CHF, SGD, HKD. |
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Note: For specific features, please refer to the related product sales documents. |
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* Product code in China Wealth Management Information Registration System: C1053103000001 |
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Transaction channels: |
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1. Visit Citibank branches and sub-branches; |
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2. Call your relationship manager or treasury service officer (NOT applicable to new-to-PA customers). |
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For more information, please call Citibank 24-Hour Service Hotline 400-821-1880 / 800-830-1880 (For land lines within mainland China). If you are overseas, please call(+86)-(20)-3880-1267. |
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Disclaimers: |
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