Dual Currency Deposit and Dual Currency Investment opportunities

A DCP is an innovative type of cash investment that uses our expertise in international banking to offer returns that are potentially greater than some short-term savings and investment products. Sometimes known as a dual currency deposit or dual currency investment, they can suit many international investors as they allow you to take advantage of fluctuations in the foreign exchange market.

Take advantage of a Dual Currency Placement

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How a Dual Currency Placement works

A Dual Currency Placement is similar to a Time Deposit. You invest cash for an agreed period, and receive a return at the end of it. However, a DCP can offer the potential for greater returns because it uses the foreign exchange options market.

You invest in one currency, and choose an alternate currency which you would also be happy to be paid back in at the end of the term from the list below.

The minimum you can invest is US$20,000 or equivalent, and you choose your currencies and the term of your investment. Current time periods are one week, two weeks and one month.
The foreign currency option is sold to a trader, who pays a premium option fee, which lets us provide substantially higher returns. We may repay in either currency.

At maturity, if you are paid in the alternate currency you can convert your money back into the base currency. However, the prevailing exchange rate might mean you receive less than your original investment. So it is best to choose an alternative currency you are happy to hold.

Dual currency placements are complex products that carry higher risks than traditional savings vehicles. So we offer them through two routes – via our advisory service or as a non-advised option. Your Relationship Manager will explain which best suits your circumstances.

Speak to your Relationship Manager for details.

How a Dual Currency Placement works in practice

When you invest, you nominate your desired currency pair, made up of a 'base currency' and an 'alternate currency'. Your investment is held in the base currency. You nominate a threshold (strike rate) at which your investment would be converted from your base currency into your alternate currency.

If the prevailing exchange rate has not moved beyond your nominated strike rate at the expiry time on the expiry date, your funds, plus the pre-determined interest are paid to you in your base currency. If the prevailing exchange rate has moved beyond the strike rate, your funds, plus the pre-determined interest are converted into the alternate currency at the strike rate and paid to you in this currency.

Advantages of a Dual Currency Placement

• They help you to manage currency risk, and potentially take advantage of currency fluctuations.

• They can be ideal for investors seeking attractive short term returns while they wait to buy a currency at a particular exchange rate.
• If you think that a certain currency will weaken further, the higher interest rate could offset loss caused by currency fluctuation.

The risks of a Dual Currency Placement

• Once a Dual Currency Placement is set up you cannot cancel or make withdrawals before the end of the term.
• There is a currency fluctuation risk and is only suitable for investors who fully understand this risk. Returns may be less than you could achieve with other savings.

• If you convert the alternate currency back into your base currency, you would need to do so at the prevailing exchange rate, which may mean you receive less than your original investment.

Who do they suit?

• Dual Currency Placement are suitable for people happy to receive their return in either currency, if for example, you live in one country and work regularly in another, or have children studying or working in another country.

There are tax implications. You should seek professional tax advice.

Take advantage of a Dual Currency Placement

Already a client?

Interested in joining us?