Important risk warning
Capture wealth opportunities while serving your currency needs
Deposit plus offers you the opportunity to generate potential higher interest return than normal time deposit and chances to exchange to 11 major currencies at your pre-defined exchange rate. Starting from only HKD5,000 (or its equivalent in other currencies), Deposit Plus is a great investment tool to enhance your potential return and fulfill your FX needs.
- Going to travel somewhere abroad
- Paying for your children’s overseas education tuition fees
- Planning to make investments in a foreign country
- Generate interest and capture chance to increase potential return, enhanced income even when the FX market is stagnant
- Chance to exchange your preferred currency at your pre-defined rate better than the initial rate1
- Flexible choice of currency pairs with investment tenors as short as one week
- No FX exchange spread
Looking for ideas?
Whether you are just starting out, or you are looking for a new opportunity, check out the top 5 currency pairs to get some investment ideas.
How does Deposit Plus work
Understanding how Deposit Plus works does not need to be complicated at all. Here is an illustrative example for you to understand how you capture growth opportunities with the products.
For example, John is planning a trip to Australia in next 2 weeks and would like to exchange for some AUD.
He thinks AUD/HKD will remain stable in the coming week.
AUD/HKD Spot Rate: 5.2228
Option 1: John decides to exchange now
Option 2: John decides to place a Deposit Plus
After John returns from Australia, he has some idle AUD. Instead of converting back to home currency immediately, he decides to capture the opportunity to increase potential return with Deposit Plus. Watch the video below to learn more:
In general, there is no additional charges on investing Structured Products, all operational, administrative and hedging costs, etc have already been contained and subsumed within the calculation of the return and/or other variables of the product.
Do I need a large sum of money to invest in deposit plus?
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- Not a time deposit - Deposit Plus is NOT equivalent to, nor should it be treated as a substitute for, time deposit. It is NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong.
- Derivatives risk - Deposit Plus is embedded with FX option(s). Option transactions involve risks, especially when selling an option. Although the premium received from selling an option is fixed, you may sustain a loss well in excess of such premium amount, and your loss could be substantial.
- Limited potential gain - The maximum potential gain is limited to the interest on the deposit.
- Maximum potential loss - Deposit Plus is not principal protected. You must be prepared to incur loss as a result of depreciation in the value of the currency paid (if the deposit is converted to the linked currency at maturity). Such loss may offset the interest earned on the deposit and may even result in losses in the principal amount of the deposit.
- Not the same as buying the linked currency - Investing in Deposit Plus is not the same as buying the linked currency directly.
- Market risk - The net return of Deposit Plus will depend upon the exchange rate of the deposit currency against the linked currency prevailing at the deposit fixing time on the deposit fixing date. Movements in exchange rates can be unpredictable, sudden and drastic, and affected by complex political and economic factors.
- Liquidity risk - Deposit Plus is designed to be held until maturity. You do not have a right to request early termination of this product before maturity. Under special circumstances, the Bank has the right to accept your early redemption request at its sole discretion and on a case by case basis. The Bank will provide an indication of the redemption price upon such request. Your return upon such early redemption will likely be lower than that if the deposit were held until maturity and may be negative.
- Credit risk of the Bank - Deposit Plus is not secured by any collateral. When you invest in this product, you will be relying on the Bank's creditworthiness. If the Bank becomes insolvent or defaults on its obligations under this product, you can only claim as an unsecured creditor of the Bank. In the worst case, you could suffer a total loss of your deposit amount.
- Currency risk - If the deposit currency and/or linked currency is not your home currency, and you choose to convert it back to your home currency upon maturity, you may make a gain or loss due to exchange rate fluctuations.
- Risks relating to RMB - You should note that the value of RMB against other foreign currencies fluctuates and will be affected by, amongst other things, the PRC government's control (for example, the PRC government regulates conversion between RMB and foreign currencies), which may adversely affect your return under this product. The value of your investment will be subject to the risk of exchange rate fluctuation. In case you receive RMB as Linked Currency at maturity and you choose to convert your maturity proceed to other currencies, you may suffer loss in principal. This product will be denominated (if Deposit Currency being RMB) and settled (when receive RMB at maturity) in RMB deliverable in Hong Kong, which is different from that of RMB deliverable in Mainland China.