Currency Linked Premium Deposit
Earn potential higher interest income than fixed deposit
How it Works
Online CLPD Service
The key risks for Currency Linked Premium Deposit are set out below. However, these risks do not represent all possible risks associated with an investment in Currency Linked Premium Deposit. You should refer to the relevant offering documents and understand the nature and risks involved of this investment product and obtain any necessary and appropriate professional advice before investing in this product.
Non-Principal Protected Structured Deposit - Currency Linked Premium Deposit is a structured deposit involving derivatives. Currency Linked Premium Deposit is not principal protected. You could lose all or part of your original deposit amount.
Derivative Risk - Currency Linked Premium Deposit is embedded with foreign exchange 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.
Not a Protected Deposit - Currency Linked Premium Deposit is not equivalent to time deposit and should not be regarded as a substitute for time deposit. Currency Linked Premium Deposit is not a protected deposit and is not protected by the Deposit Protection Scheme in Hong Kong.
Foreign Exchange Risk - The return of CLPD is linked to the exchange rate between the Deposit Currency and the Alternate Currency. Movements in exchange rates can be sudden and drastic, and affected by complex political and economic factors. You will be exposed to a risk of loss arising from exchange rate fluctuations. If the Deposit Currency and / or Alternate Currency is / are 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.
Exchange Control - For currencies subject to exchange controls imposed by the relevant governments, such as renminbi (RMB), the exchange rates may be easily affected by change in government policies. Such currencies may have different exchange rates quoted in different markets. For example, exchange rates of RMB are quoted in onshore and offshore markets; the onshore rate of RMB is being referred as "CNY" and the offshore rate (i.e. when traded in Hong Kong) is being referred as "CNH". Although CNY and CNH represent the same currency, they do not necessarily have the same exchange rate and may not move in the same direction.
Limited Potential Return - Investing in Currency Linked Premium Deposit is not the same as investing in the Alternate Currency directly. Even if your view of the market movement of the Alternate Currency is correct, the maximum potential return is limited to the total interest amount for the Currency Linked Premium Deposit.
Credit Risk - Currency Linked Premium Deposit is not supported by any collateral or guarantee. Currency Linked Premium Deposit is subject to the creditworthiness of Dah Sing Bank ("Bank"). If the Bank becomes insolvent or goes into liquidation or defaults on its obligations under the Currency Linked Premium Deposit while your Currency Linked Premium Deposit is still outstanding, you will rank as an unsecured creditor of the Bank and could, in the worst case, lose your entire deposit amount irrespective of the terms of the Currency Linked Premium Deposit.
Liquidity Risk - Currency Linked Premium Deposit should be held until maturity. Currency Linked Premium Deposit is not listed on any exchange and is not transferable. Any termination, cancellation or withdrawal prior to maturity is subject to the consent of the Bank. You may incur significant costs or losses as a result of early termination, cancellation or withdrawal.
Risks of early termination by the Bank - The Bank has the right (but not the obligation) to terminate this product early upon occurrence of certain events. If this product is terminated by the Bank early, you may suffer a substantial loss under this product.
Conflict of Interests - Potential conflicts of interest may arise from the different roles played by the Bank, its subsidiaries and / or its affiliates in connection with the Currency Linked Premium Deposit. The Bank and / or its subsidiaries and / or its affiliates may enter into, adjust or unwind transactions relating to the relevant currencies, whether for its or its subsidiaries' or its affiliates' proprietary accounts or for account under management or to facilitate transactions on behalf of investors or otherwise. In carrying out these roles, the Bank's economic interests and those of its subsidiaries and / or its affiliates are potentially adverse to the investors' interests in the Currency Linked Premium Deposit.
Not Covered by the Investor Compensation Fund - The Currency Linked Premium Deposit is not listed on any stock exchange and is not covered by the Investor Compensation Fund in Hong Kong.
Currency Linked Premium Deposit is a structured investment product involving derivatives. This investment decision is yours but you should not invest in this product unless the Bank has explained to you that this product is suitable for you having regard to your financial situation, investment experience and investment objectives.
This brief warning cannot, of course, disclose all risks and other aspects in relation to Currency Linked Premium Deposit. The customer should accordingly obtain independent expert financial advice before investing in any Currency Linked Premium Deposit.