Dual Currency Premium Account

4 simple steps for dual currency investment

• Invest by choosing 2 currencies, one as the base currency (usually the currency you begin with) and the other as the alternate currency
• Select from flexible tenures ranging from 2 weeks to 6 months
• Select from an extensive range of currencies: USD, JPY, AUD, NZD, EUR, GBP, HKD, CAD, CHF and SGD
• On maturity, get paid in either your base or alternate currency, depending on which is the weaker currency when measured against your pre-determined exchange rate (strike price)

Is Citibank Premium Account suitable for you?

You may find a Citibank Premium Account suitable for you under the following circumstances:

• 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 migration purposes, 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 currency movements and you are likely to have a higher chance of receiving your principal and interest back in your base currency that is weakening.

How does the Premium Account work?

To help you understand how the Citibank Premium Account works, please take a few minutes to read this simple illustration.

*This is an indicative rate for a USD Premium Account of USD 100,000 with AUD as the alternate currency, strike price 250 points away from the prevailing spot rate as of May 10, 2010 for a one-month tenure.

¹Call Date is 2 business days before maturity date, 10am Singapore Time.

^{^} In the event that the market rate on Call Date is equal to the strike price, the Bank reserves the right to pay your principal plus interest in either the base currency (USD 100,541) or the alternate currency(AUD 114,511).

On call date, it will be determined if you will receive your principal plus interest back in your base or alternate currency depending on which is the weaker currency when measured against your strike price.

Should you be paid in your alternate currency (AUD), you may consider:

• Establishing another Premium Account with AUD as your base currency. This will provide you with an opportunity to convert your AUD back to your original base currency; or
• Placing your AUD in a time deposit

However, in this instance, you must be aware that if you choose to convert your AUD back to USD immediately, you will experience a loss as the prevailing foreign exchange rate is not in favor.

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Premium Account requirements

• Minimum US$50,000 (or equivalent)
• Minimum US$5,000 (or equivalent) for Premium Accounts established on Citibank Online

Risks

A Premium Account is unlike a traditional bank account as it is an investment and returns may vary. Premium Accounts are subject to a number of risks:

FX Risk

• Risk of being converted to the alternate financial instrument. If you convert your alternate financial instrument back to the base financial instrument, you may have potential losses.
• Should the market move against you, you must be prepared to buy your alternate financial instrument at the agreed Strike Price, which would be less favorable than the prevailing exchange rate at the maturity of your Premium Account.
• There may be from time to time for certain financial instruments, controls that governments put in place to ban or restrict the amount of foreign financial instruments or domestic financial instruments that is allowed to be traded or purchased. Common types of exchange controls include banning the use of foreign financial instruments and restricting the amount of domestic financial instruments that can be exchanged within the country.
• 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 financial instruments in your financial instrument pair. In such cases, payment to you will be made in the alternate financial instrument in your financial instrument pair or another financial instrument chosen by the Bank. You may incur a loss on the principal amount invested in such cases.

Liquidity Risk

• Pre-termination of the Premium Account is strongly discouraged and may incur substantial costs.
• 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.
• Some of the factors used in calculating such charges include the exchange rate for the financial instrument pair, the prevailing interest rate and the remaining term of the Premium Account. As a result, the amount repaid to you may be less than the principal amount invested.

* The above is only a summary of some of the key risks in investing in the product. Detailed risk disclosures are set out in the documentation relating to the specific product. Prior to entering into a transaction, you should ensure that you have read and understood the nature of all of the risks associated with the investment in order to determine whether the investment is suitable for you in light of your experience, objectives, financial position and other relevant circumstances. You should consult with your legal, regulatory, tax, financial and/or accounting advisors to the extent you consider it necessary in making your own investment decision.