Premium Currency Investment
Premium Currency Investment offers higher interest rates and potential gains from FX fluctuations. Maximise your money making opportunities with tenors as short as one week.
A PCI is a structured - or customised - investment product that is linked to a pair of currencies. The tenor of a PCI can range from one week to three months with minimum investment amount of SGD30,000 (or its equivalent in other currencies).
On maturity, you will receive both the principal and interest in either the alternate currency (to be converted at TCR) or the base currency.
Let's assume you have funds of SGD100,000 and you don't mind holding AUD.
Let's say the Spot Exchange Rate between these two currencies is 1.2200. However, preferring to be more conservative you set a Target Conversion Rate (TCR) of 1.2150.
As you don't need the funds for the next month, you choose a one-month tenor.
At this stage, we will inform you of the guaranteed interest rate that you will enjoy. In this case, let's assume it is 8% p.a.
On Fixing Day (two business days before maturity), it will be determined whether your funds plus the guaranteed interest will be repaid in SGD or AUD.
|Scenario 1||Scenario 2|
|SGD weakens against AUD, compared to the TCR you have set. It now trades at 1.2250.||SGD strengthens against AUD to TCR or beyond the TCR that you have set. It now trades at 1.2050.|
|You will receive:
One-month's interest in SGD.
|You will receive:
One-month's interest in AUD converted at TCR of 1.2150.
(1/12 x 8% x 100,000)
(100,000 + 667) ÷ 1.2150
(if converted at AUD/SGD spot of 1.2050 at expiry, SGD equivalent is SGD99,838, a shortfall of SGD162)
The actual profit/shortfall is dependent on the spot AUD/SGD at expiration.
Our Gold Premium Currency Investment offers higher interest rates and potential gains from gold price movements. More details»
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