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Dual Currency Placements

Dual Currency Placements

Invest in one currency and be potentially repaid in another

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  • Overview
  • Our Dual Currency Placements
  • Management & fees

What is Dual Currency Placement?

A Dual Currency Placement is a complex short term foreign exchange investment that carries with it higher risks than short term savings, although it can also offer potentially greater returns.

If you regularly use more than one currency and are happy to take out an investment where the return may be paid in either of your chosen currencies, then a Dual Currency Placement could be for you. For example, if you live in one country and work regularly in another, or if you have children studying or working in another country, a Dual Currency Placement may potentially be suitable for you.

pdf icon See our Dual Currency Placement brochure for a more detailed explanation of our Dual Currency Placement product and its risks.

Why you may consider a Dual Currency Placement?

A Dual Currency Placement could be appropriate for you if you want:

  •   to diversify your portfolio by gaining exposure to the foreign exchange market
  •   instant, live pricing reflecting any changes in the market
  •   the potential to achieve a high short term total return
  •   to tailor your investment to suit your view, expectation and requirements
  •   to select from a wide variety of currency pairs and Strike Rates

Benefits and risks

  • These innovative foreign exchange products provide an opportunity to potentially generate a higher return on your money than other short-term deposits, if you are comfortable being repaid in one of two currencies of your choice.
  • A Dual Currency Placement could potentially provide an opportunity to generate greater returns than from short term cash investments.
  • You could receive less than your initial investment if, at the expiry date, you choose to convert the Alternate Currency back into the Base Currency, as this will be done at the prevailing exchange rate.
  • There may be tax implications to taking out a Dual Currency Placement. You should have good knowledge and experience of your tax position, or seek professional tax advice, as Citi does not provide tax advice.
  • The returns on a Dual Currency Placement are not guaranteed, and neither is the amount you initially invest. Past performance is not indicative of future results, investments can go down as well as up.

How Dual Currency Placements work at Citi

  • Select base and alternate currencies

    Select your preferred currency

    A Dual Currency Placement uses the foreign exchange Options market. You sell the foreign Currency Option to Citi, for which you receive an Option Premium.

    The Option Premium you receive is determined by various factors such as the Term, currency pair and Strike Rate. This Option Premium means you can potentially receive higher returns in comparison to a short term savings product, although the actual return will depend on your agreed Strike Rate and the position of the markets at the end of the Dual Currency Placement Term.

    First, you select your two currencies - a Base Currency and an Alternate Currency from the list below. For example, you could choose Sterling as your Base Currency and invest £50,000, with US Dollars as the Alternate Currency that you want to be repaid in. You then select the investment term - for example one month (though you can choose terms from as little as one week).

    •  United States Dollars
    •  British Pounds (GBP)
    •  Euros (EUR)
    •  Japanese Yen (JPY)
    •  Swiss Francs (CHF)
    •  Canadian Dollars (CAD)
    •  Australian Dollars (AUD)
    •  New Zealand Dollars (NZD)
    •  Danish Krone (DKK)
    •  Norwegian Krone (NOK)
    •  Emirati Dirham (AED)
    •  Russian Roubles (RUB)
    •  Turkish Lira (TRY)
    •  Hungarian Forint (HUF)
    •  Romanian Leu (RON)
    •  Polish Zloty (PLN)
    •  Czech Republic Koruna (CZK)
    •  Swedish Krona (SEK)
    •  Hong Kong Dollars (HKD)
    •  Israeli Shekel (ILS)
    •  South Africa Rand (ZAR)
  • Nominate strike rate and place order

    Then you nominate a threshold or Strike Rate at which the Base Currency would be converted to the Alternate Currency. The level of this Strike Rate helps determine the return on your investment, and we can help you to work out your options.

    You then agree to sell a foreign Currency Option to us in return for an Option Premium. The combination of the Strike Rate, currency pair and the Term will determine the Option Premium.

  • Receive payment

    On the expiry date, we will pay you your initial investment plus your return in one of the two ways as shown below. 

    • Scenario A

      Initial Investment and return will be paid in USD
      since USD on Expiry Date weakens to 1.6000 in
      relation to Strike Rate of 1.5600
      Total earned on Expiry Date
      (Initial Investment + Option Premium)
      USD $50,000 + 13.50%
      USD £50,563

      Indicative exchange rate for illustration purposes only

    • Scenario B

      Initial Investment and return will be paid in GBP
      since USD on Expiry Date strengthens to 1 .5500
      in relation to Strike Rate of 1.5600
      Total earned on Expiry Date
      (Initial Investment + Option Premium) USD
      $50,000 + 13.50% / 1.5600
      GBP £32,412* 2>

      Indicative exchange rate for illustration purposes only

  • Glossary

    Dual Currency Placement Glossary


    Alternate Currency

    means the currency in which we buy the Base Currency from you, in the event we choose to exercise the Currency Option.

    Base Currency

    means the currency in which you agree to sell us the Currency Option and the currency in which the Initial Investment is made.

    Currency Option

    the right (but not the obligation) for Citi to convert your Initial Investment and Option Premium into the Alternate Currency at the Strike Rate.

    Differential

    The number of Pips by which the Strike Price is placed away from the Spot Price. Differential value can be positive or negative. Please note that the selectable Differential range is subject to change without notice due to market conditions.

    Expiry Date

    means the date on which your Dual Currency Placement matures and the date on which we pay you the Initial Investment and Option Premium.

    Option

    an Option is a financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the Option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the corresponding obligation to fulfil the transaction. The underlying asset can be a stock, a bond, a currency or a future. In a Dual Currency Placement, Citi International Personal Bank will buy a Currency Option from you.

    Option Premium

    means the premium payable by us to you as consideration for you granting us the Currency Option.

    Strike Rate

    means the pre-agreed exchange rate of one unit of the Base Currency into the Alternate Currency.

    Term

    means the period of time from when the Dual Currency Placement begins until the Expiry Date. The Term must be less than nine (9) months and will normally be one (1) or two (2) weeks or one (1) month.

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A Treasury Support Officer can:

  • Send you the latest market analysis
  • Sell Dual Currency Placements on your behalf
  • Provide support and guidance to your Relationship Manager
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With Citi online you can

Open and manage a Dual Currency Placement through Citi Online at your own convenience.

Managing Dual Currency Placements online gives you more freedom and flexibility, and is done on a non-advised basis.

Before you take out a Dual Currency Placement for the first time, your Relationship Manager will complete a risk profile with you to make sure the product is suitable for your personal wealth management strategy and investment experience to date. You can arrange to do this quickly and easily by contacting them.

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Eligibility

The minimum trading/investing value is $20,000 (or currency equivalent)

Fees

Transaction fees
Non-Advisory Services

Where you use our Non-Advisory Services, and you decide to invest in a Dual Currency Placement, you will be charged an upfront transaction fee based on the investment amount you invest, in addition to the amount you invest, as follows:

(i) If you invest through a Relationship Manager (in branch or via telephone): 0.15%

(ii) If you invest through Citi Online: 0.10%

Advisory Services

Where we provide you with Advisory Services in relation to a Dual Currency Placement, and you decide to invest in that Dual Currency Placement, an upfront Advisory Fee will be charged, in addition to the amount you invest.

The upfront Advisory Fee is made up of:

(i) an advice fee of 0.05% based on the amount you invest; and

(ii) a transaction fee of 0.15% based on the amount you invest

Fees will be the same, irrespective of which country you choose to invest in.

Why Wealth Manage at Citi?

  • As part of a model portfolio Receive guidance to meet your financial goals

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  • As offshore investments Diversify your wealth on a global scale

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Take the first steps to your wealth management planning with Citi

Speak to a Relationship Manager
0207 500 1992

Already with Citi? Contact your relationship manager or view product availability on Citi Online

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Important information
Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated.


Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.