Fubon Currency-Linked Deposit

Fubon Currency-Linked Deposit

It's Advantageous, leverage the Edges and Make Your Wealth Rocket

What are the key risks of this product ("Currency-Linked Deposit")?

What are the key risks of this product ("Currency-Linked Deposit")?


Not a time deposit
Currency-Linked Deposit is NOT equivalent to, nor should it be treated as a substitute for time deposit. It is NOT a protected deposit and is NOT protected by the Deposit Protection Scheme in Hong Kong.


Derivatives risk
Currency-Linked Deposit is embedded with FX option(s). Option transactions involve risks, especially when selling an option. Although the premium received from selling an option is fixed, customers may sustain a loss well in excess of such premium amount, and customers’ loss could be substantial.


Limited potential gain
The maximum potential gain is limited to the interest payment received from the relevant Currency-Linked Deposit.


Maximum potential loss
Currency-Linked Deposit is not principal protected. Customers could lose all of their deposit amount plus interest if the underlying currency depreciates to zero value.


Not the same as buying the Linked Currency
Investing in Currency-Linked Deposit is not the same as buying the Linked Currency directly. During the deposit period of Currency-Linked Deposit, customers have no rights in the Linked Currency. Movements in the market price of the Linked Currency may not lead to any corresponding change in the performance of Currency-Linked Deposit.


Market risk
The return of Currency-Linked Deposit is linked to the exchange rates of the Deposit Currency against the Linked Currency. Movements in exchange rates can be unpredictable, sudden and drastic, and affected by complex political and economic factors. The maturity payment currency depends on the prevailing market rate on the Fixing Date / Time and is solely at the Bank’s option as described in the termsheet. The loss of investing in the Currency-Linked Deposit can be substantial if the Linked Currency depreciates drastically at Fixing Date / Time.


Liquidity risk
Currency-Linked Deposit is designed to be held till maturity. The Bank may at its absolute discretion refuse to consent to any withdrawal request before maturity. Customers do not have the right to request early termination of this product before maturity.


Risk of underlying asset conversion
Currency-Linked Product often involves selling a put option which the customers are obliged to buy the Linked Currency at a predetermined price (i.e. Conversion Rate). In the case that the put option is being exercised, the original money invested will be converted into Linked Currency which the market value may be far below compare to the original investment amount.


Credit or Default risk of the Bank
Currency-Linked Deposit is not secured by any collateral. When customers invest in this product, customers will be relying on the Bank’s creditworthiness. If the Bank becomes insolvent or defaults on its obligations under this product, customers can only claim as an unsecured creditor of the Bank. In the worst case, customers could suffer a total loss of customers’ deposit and interest amount.


Currency risk
If the Deposit Currency and/or Linked Currency is not in customers’ home currency, and customers choose to convert it back to his or her home currency on or after maturity date, customers may gain or loss from exchange rate fluctuations.


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, customers may suffer a substantial loss under this product. See “Can the Bank adjust the terms or early terminate this product?” below.


Can the Bank adjust the terms or early terminate this product?

Can the Bank adjust the terms or early terminate this product?

The Bank may early terminate a Currency-Linked Deposit if imposition of exchange controls, events of default, or other events occurs. If a Currency-Linked Deposit is early terminated by the Bank, the amount payable by the Bank (if any) on such termination will be determined by the Bank (acting in good faith and in a commercially reasonable manner).


Such adjustments or early termination events may negatively affect customers’ return or loss under this product.


Back to topTOP