Citibank Online Premium Account

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Citibank Online Premium Account
Citibank Online Premium Account
Citibank Online Premium Account is a dual currency investment which offers you
the opportunity to earn potentially higher interest returns. It involves a currency
option which gives the bank the right to repay your principal and interest earned
in either the Base Currency or the Alternate Currency.
Citibank Online Premium Account
Key Benefits
Potentially Higher Returns
Returns are higher than conventional
Time Deposits.
Flexibility & Choice
Of currency pairings, interest rates,
tenure, buffer value & Strike Rate
Short Tenure of Investment
1 week to 6 months
Low start-up Investment amount
USD 5,000 or the equivalent amount
in other currencies on Citibank Online.
Target Investor
This investment is ideal for you when:
You are indifferent to the 2 currencies
chosen - you are comfortable receiving
your money in either the base or the
alternate currency.
If you wish to hold on to a particular
currency that is weakening – earn a
potentially higher interest, and also have
a chance of receiving your money back in
the same currency.
Steps on Establishing a Premium Account
STEP
1
Select Base Currency and Investment Amount.
Select your Base Currency from the 10 currencies offered by Citibank.
SGD
EUR
USD
GBP
AUD
JPY
CAD
NZD
CHF
HKD
Place your principal (minimum of USD 5,000 for online channel) in a base currency of your choice.
STEP
2
STEP
3
STEP
4
Select Alternate Currency and Tenure of your investment.
Select an Alternate Currency and decide on the Tenure of your investment, which can range from 1 week to 6
months.
Select your investment parameters.
Depending on your investment strategy and market conditions, an exchange rate between the 2 currencies will be
determined and agreed upon between you and the bank (Strike Rate). The interest rate will be determined by
factors (including but not limited to) such as the Currency Pairing, Tenure and Strike Rate.
.
Upon maturity.
The principal and interest earned in the Base or the Alternate Currency will be repaid in the weaker of the 2. This
will be determined by comparing the Strike Rate with the prevailing spot rate on the Expiry Date (2 business
days before maturity). The Strike Rate will be applied if your Base Currency is converted to the Alternate
Currency.
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Citibank Online Premium Account
Illustrating how a Premium Account Works
This example is based upon the assumption that you invest SGD100, 000 in a 1-month Citibank Premium Account with SGD as
your Base Currency and AUD as your Alternate Currency.
On Transaction Date (09 September),
Investment Amount
(in Base Currency)
Alternate Currency
Investment Tenure
Spot FX Rate
SGD 100,000
AUD
1 month
1 AUD = 1.2889 SGD
As part of your investment strategy, you could choose to maintain a buffer of 100 pips thus:
Buffer Value
Strike Rate
Interest Rate
Buffer Value = 100 pips
1 AUD = 1.2789 SGD
Interest Rate = 7.8346%
2 business days later, on the Value Date (11 September), your Premium Account is effected and you start earning interest to
the maturity date of your Premium Account.
Interest Computation:
Interest Earned
(in Base Currency)
=
Investment Amount
(in Base Currency)
X
Interest Rate%
X
Investment
Tenure
Interest Earned
(SGD)
=
SGD 100,000
X
7.8346%
X
30
/
1 Year
=
/ 365* =
Interest amount
(in Base Currency)
SGD 643. 94
*Number of days in a calendar year = 365 days; except U.S calendar = 360 days.
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Citibank Online Premium Account
On the Expiry Date, (09 October), the currency (Base or Alternate) in which your investment is returned to you is determined by
the Spot FX rate as of that date. Accordingly, you are likely to face with one of the 3 following scenarios.
Scenario 1: Spot Rate on Expiry Date > Strike Rate
Spot Rate on Expiry Date: 1 AUD = 1.2993 SGD | Strike Rate: 1 AUD = 1.2789 SGD
Inference: AUD has strengthened with respect to SGD from Transaction Date to Expiry Date. Your funds will be
returned to you in the weaker currency, i.e., SGD.
Amount you will receive upon maturity = SGD 100,000 + SGD 643.94 = SGD 100,643.94
You would have gained SGD 643.94
Scenario 2: Spot Rate on Expiry Date = Strike Rate
Spot Rate on Expiry Date: 1 AUD = 1.2789 SGD | Strike Rate: 1 AUD = 1.2789 SGD
Inference: AUD has neither strengthened nor weakened with respect to SGD from Transaction Date to Expiry Date. In
this case, your funds will be returned to you in the Base currency, i.e., SGD.
Amount you will receive upon maturity = SGD 100,000 + SGD 643.94 = SGD 100,643.94
You would have gained SGD 643.94
Scenario 3: Spot Rate on Expiry Date < Strike Rate
Spot Rate on Expiry Date: 1 AUD = 1.2657 SGD | Strike Rate: 1 AUD = 1.2789 SGD
Inference: AUD has weakened with respect to SGD from Transaction Date to Expiry Date. Your funds will be
returned to you in the weaker currency, i.e., AUD.
Amount you will receive upon maturity = (SGD 100,000 + SGD 643.94)/1.2789 = AUD 78, 695.70
If converted back to SGD, the amount is equivalent to SGD 99,605.15 (AUD 78, 695.70 x 1.2657) which is less than the
principal amount of SGD 100,000.
You would have lost SGD 394.85
2 business days after Expiry Date, is the Maturity Date (11 October), that marks the end of your Premium Account Investment.
You earn interest for your Premium Account up to this date. The funds from your Premium Account are returned to you on
Maturity date in the weaker currency that was determined on Expiry Date.
Note: The hypothetical profit and loss shown in the above 3 scenarios are meant for illustrative purposes only. The scenarios
shown above have no reference to historical data and are not actual or indicative of future performance.
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Citibank Online Premium Account
Flexibility and Convenience of Investing Online
Enjoy instant access to market opportunities anytime, anywhere with Citibank Online Investments. Featuring a choice of
currencies and access to real-time rates, you can establish new Premium Accounts and track all your investments online at
www.citibank.com.sg.
Start a Premium Account today
with an easy minimum of USD 5,000 via our online platform.
For more information, please contact (+65) 6333 9000.
Before You Start
Please contact your Relationship Manager or Personal Banker or visit any of our branches to
complete the Investment Risk Profile and Premium Account Agreement.
Disclaimer
By investing in a Citibank Premium Account, you are allowing the bank 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. A Premium Account is unlike a traditional bank account as it is an investment and returns may vary.
A Premium Account is an investment in one or more foreign currencies. It is subject to foreign exchange rate fluctuations,
which may provide both opportunities and risks. You may experience a loss when you convert any alternate currency into the
base currency. The higher rate of interest you may earn in the Premium Account as compared to a traditional time deposit may
not compensate you for the foreign exchange loss. A Premium Account is not a deposit and is not subject to the provisions of
the Deposit Insurance and Policy Owners' Protection Schemes Act 2011 of Singapore ("Act"), nor eligible for deposit insurance
coverage under the Deposit Insurance Scheme. Exchange controls may apply from time to time to certain foreign currencies.
Our Treasury Services Managers and Relationship Managers may assist you with information on any exchange controls that are
relevant to the currencies in which you invest. You should note that a Premium Account is an investment product that should
be held to maturity. Early withdrawal of a part of a Premium Account prior to the maturity date is not permitted. Early
withdrawal of the whole of a Premium Account is permitted but strongly discouraged, because you will have to pay early
termination charges and these charges will be deducted from the amount repaid under the Premium Account. As a result, the
amount repaid to you may be less than the principal amount. If you wish to terminate your Premium Account prior to maturity,
please contact the Bank. The Bank may, at any time at its discretion, terminate the Premium Account. This may happen, for
example, if restrictions on convertibility and transferability become applicable to any of the currency in your Premium Account.
In such cases, payment to you may be made in the alternate currency or another currency chosen by the Bank. You may incur
a loss on the principal amount in such cases. You should obtain the advice of a licensed or an exempt financial advisor before
making a commitment to enter into a Premium Account transaction. In the event that you choose not to seek advice from a
financial adviser, you should carefully consider whether a Premium Account is suitable for you in light of your investment
objectives, your financial means and your risk profile. For more information on a Premium Account, you should also carefully
read the terms and conditions of the Premium Account. Investment and Treasury products are not available to US persons.
Citibank's full disclaimers, terms and conditions apply to individual products and banking services.
©2012 Citibank. Citibank is a registered service mark of Citigroup Inc. Citibank Singapore Limited Co. Reg.No. 200309485K
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