A Currency Linked Investment is a dual currency investment that involves a currency option, giving you the opportunity to earn an enhanced yield based on your view of the movements of the exchange rate in the future and the risk undertaken. Based on your chosen currency pair, strike rate, and tenor, the Bank determines that the enhanced yield in base currency is 5. On the fixing date 2 business days before maturity , the prevailing exchange rate spot rate will be compared against the strike rate to determine whether you will be repaid the maturity proceeds in the base currency or the alternate currency.
If you are to be repaid in the alternate currency, the strike rate will be used to convert the maturity proceeds. When the spot rate on fixing date equals the strike rate, you will receive the aggregate of the original investment amount and the enhanced yield in the alternate currency.
All figures and rates used above are for illustration purposes only. The above illustrations are not indicative of the likely or future performance of a CLI and do not cover all possible scenarios. Currency Linked Investment CLI is a dual currency investment, which gives DBS Bank Ltd "DBS" the right to repay you at a future date your principal and enhanced yield earned in either the base or the alternate currency, regardless of your preference at the relevant time.
Dual currency investments are subject to foreign exchange fluctuations, which may affect the return of your investment. Exchange controls may also be applicable to the currencies your investment is linked to which may result in the loss of your principal sum.
In the worst-case scenario, where the Bank becomes insolvent, you will receive zero return and lose your entire original investment amount. In general, changes in interest rates in the country issuing the alternate currency relative to interest rates in the country issuing the base currency may affect the future value of the base currency relative to the alternate currency, as implied by currency futures contracts, which would generally affect the value of the CLI. Interest rates may also affect the economy of a country issuing the relevant currencies and, in turn, the exchange rates and therefore the values of the currencies relative to one another.
The interest rates for the base currency, with regards to the interest rate volatility, from time to time, may continue to be volatile. An investment in a CLI involves risks and should only be made after assessing, for example, the direction, timing and magnitude of potential future changes in the movement of interest rates, exchange rates and the terms and conditions of the CLI.
More than one risk factor may have simultaneous effects with regard to the CLI such that the effect of a particular risk factor may not be predictable. In addition, more than one risk factor may have a compounding effect, which may not be predictable. No assurance can be given as to the effect that any combination of risk factors may have on the value of a CLI. For more information on the features of the CLIs and its risks including risks that are specific to each type of CLI , please refer to the relevant Product Summary, Termsheet and other offering documents which can be obtained from DBS branch on request.
This document is not intended to be exhaustive and does not constitute an offer, invitation, recommendation or solicitation of any action based upon it. This document should not be viewed as identifying or suggesting all risks, direct or indirect, that may be associated with any investment decision. DBS and its related companies do not assume or undertake any duty to advise any person or investor, and accept no liability whatsoever for any direct, indirect or consequential loss arising from or in connection with any use or reliance on this document or anything contained in it.
You may wish to seek advice from a licensed or an exempt financial adviser before making a commitment to purchase a CLI. In the event that you choose not to seek advice, you should carefully consider whether a CLI is suitable for you. This publication is for your private information only and no part of this publication may be i copied in any form, by any means, or ii re-distributed without the prior written consent of DBS.
DBS shall have no liability for any misuse or unauthorized distribution of this publication. Further information on the contents of this publication may be obtained upon request. All or part of the interest received on the Currency Linked Investment represents the premium on the currency option.
Currency Linked Investments are subject to foreign exchange fluctuations, which may affect the return of your investment. Exchange controls may also be applicable to the currencies your investment is linked to. You may incur a loss on your principal sum in comparison with the base amount initially invested.
Step 1 Choose your base currency: SGD the original currency invested Step 2 Choose your alternate currency: AUD the alternate currency which you are comfortable in holding Step 3 Agree on a strike rate: Explore more Investing Financial Planning Payments. We appreciate your feedback. How would you rate this page?
What issues did you face today? Information is not useful. Page is hard to find. Language is hard to understand. Choose your alternate currency: AUD the alternate currency which you are comfortable in holding. Agree on a strike rate:More...