About Dual Currency Plus
What is Dual Currency Plus?
HSBC's Dual Currency Plus helps you make the most of your foreign currency needs by allowing you to pair two currencies of your choice and making use of foreign exchange fluctuation to enhance your returns.
How Dual Currency Plus works
If you need to set aside SGD100,000 for your child's education fees in Australia, you may choose to convert the amount on today's spot rate between AUD and SGD, or wait to convert it on an unknown spot price in the future.
Alternatively, if you are not in a hurry to exchange into the foreign currency, you can use the Dual Currency Plus to apply a structured approach to acquiring foreign currency and earn an attractive yield in the meantime. The following example shows how you can invest SGD100,000 in the Dual Currency Plus, and fix a conversion rate at a foreign exchange rate that is better than today's rate.
Suppose that:
- You invest SGD100,000 in Dual Currency Plus
- Select Australian Dollar (AUD) as linked currency with a 1-month investment period
- Choose a conversion rate at the start of investment (AUD/SGD) of 0.8830 with 5% p.a. yield
- The spot rate at the start of investment (AUD/SGD) is 0.8910
By setting your conversion rate at a rate that is better than the market rate, you will be able to exchange your funds (if converted), at a level that is better than today's foreign exchange rate.
Based on the example given, there are three possible scenarios:
Scenario 1
If the AUD/SGD conversion rate is lower than the final exchange rate on fixing day, it means SGD has weakened against AUD (it takes more SGD to buy 1 AUD).
What happens to your investment
Your funds won't be converted into AUD.
You'll be repaid in your original currency (SGD) with the agreed return.
Example
Conversion rate: 0.8830
Final exchange rate on fixing day: 0.9100
Outcome: No conversion
You receive: SGD100,411 (principal + returns)
Scenario 2a
If the AUD/SGD conversion rate is higher than the final exchange rate on fixing day, it means AUD has weakened against SGD (you get more AUD for the same amount of SGD).
What happens to your investment
Your funds will be converted into AUD at the conversion rate you had set.
You'll receive repayment in AUD, including the agreed return.
Example
Conversion rate: 0.8830
Final exchange rate on fixing day: 0.8750
Outcome: conversion into AUD
You receive: AUD113,715.74 (principal + return)
Scenario 2b
If the AUD/SGD conversion rate is significantly higher than the final exchange rate on fixing day, it means AUD has weakened sharply against SGD.
What happens to your investment
Your funds will be converted into AUD at the conversion rate (0.8830) you had set.
You'll receive AUD 113,715.74 (principal + return).
Why an exchange loss will occur
Because the final exchange rate (0.8550) is more favourable than the conversion rate you had set, converting at 0.8830 can result in an exchange loss versus the final exchange rate.
Exchange loss (illustration): SGD 3,288.31
Against the final exchange rate (0.8550), an exchange loss will occur because conversion happens at your chosen conversion rate (0.8830).
Exchange loss calculation:
[(SGD100,411÷0.8550)−AUD113,715.74]×0.8830=SGD 3,288.31
Even if 0.8830 is better than the rate at the start of your investment, it's not as favourable as the final exchange rate, so the difference is larger when AUD weakens sharply.
Why invest in Dual Currency Plus?
You may earn enhanced returns in exchange for granting the Bank the right to repay your proceeds (investment and return) in either the base or linked currency at maturity depending on exchange rate movements in respect of the currency pair.
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Choice of tenors: you can choose to invest in tenors ranging from 1-week to 3-months
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Wide array of currencies: US dollar, Singapore dollar, Hong Kong dollar, Australian dollar, New Zealand dollar, Canadian dollar, Euro, Sterling, Swiss franc, Chinese yuan (renminbi[@offshore-rmb-restrictions]), and Japanese yen
Before you invest
Is Dual Currency Plus suitable for me?
Dual Currency Plus[@dual-currency-plus-cka] can help you make the most out of many foreign currency transactions, such as:
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Overseas education: growing your savings to fund your children's overseas education
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International investments: whether you are financing an overseas property or invested in foreign investment products, Dual Currency Plus can help you acquire foreign currencies at potentially better foreign exchange rates
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Remittance: give your loved ones staying overseas a better quality of life by supplementing your remittance with returns from Dual Currency Plus
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Travel: treat yourself to a room upgrade, or extra holiday cash with your returns from Dual Currency Plus
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Wealth management: grow your wealth by leveraging on currency fluctuation to receive greater returns
What should I be aware of before I invest?
Here are the key things to understand before you invest in Dual Currency Plus.
Dual Currency Plus is an investment product and not a time deposit. It is classified as an unlisted Specified Investment Product (SIP). Unlisted SIPs are those that are not listed on an exchange. SIPs are derivatives or products which may contain derivatives. They are complex products and cannot generally be sold without advice.
When you invest, your money is placed in a chosen currency (your 'base currency'). At maturity, the Bank determines whether your principal and returns are paid back in that base currency or in a different currency you've selected (the 'linked currency'), depending on how currency markets move during the investment period. In particular, if you have limited knowledge on investment products, you are encouraged to seek advice from a financial adviser. If you choose not to seek advice from a financial adviser, you should carefully consider whether the investment is suitable. Any transaction you decide to make will be of your own choice and at your own risk.
Understanding the risks
Dual Currency Plus is inherently speculative in nature and carries risks. Foreign currency markets are unpredictable, and if your proceeds at maturity are paid in the linked currency, you could receive back less than you originally invested.
- Exchange rate risk: currency movements could affect your overall returns
- Exchange controls: the country or region issuing the foreign currency may impose restrictions from time to time, which could delay or prevent payment of your proceeds
Check with your financial adviser whether any foreign exchange restrictions apply to your chosen currencies. If you're moving to a different country, this may introduce additional currency risks and tax implications - consider consulting a tax adviser.
Holding to maturity
Dual Currency Plus is designed to be held until maturity. HSBC will consider early termination requests on a case-by-case basis, but approval is not guaranteed. Where an early termination is exceptionally agreed, HSBC will provide an indicative redemption price of not less than USD300 (or equivalent). Please be aware that ending your investment early will likely mean a lower return than holding to maturity, and it's possible you could receive less than your original investment. We may, in our reasonable discretion, amend this minimum amount from time to time (with notice via the website). If you're residing outside Singapore, we can only consider your request for early termination if you have an HSBC Premier Relationship Manager assigned to you.
Terms that apply
Your investment is governed by the following documents:
- The relevant term sheet (applicable to DCP investments transacted via Relationship Manager), or the relevant terms for DCP investments made through mobile banking
- The Dual Currency Plus terms and conditions
- The Investment terms governing investment accounts with the Bank
- The HSBC Account User Agreement (in particular, the section on 'Foreign Currency Time Deposit')
What are the prerequisites for investing in Dual Currency Plus?
You need to have the following:
- Aged 21 and above
- An active Everyday Global Account with HSBC
- Valid Customer Knowledge Assessment (CKA) where you have assessed to have knowledge and experience in investing in Dual Currency Plus
What are the criteria set for Customer Knowledge Assessment (CKA)?
Below are the 3 criteria set for the satisfaction of CKA. To fulfill or 'pass' the CKA, you need to satisfy just one of the following criteria.
- Investment experience
- Working experience
- Education qualification
- Have a diploma or higher qualification in relevant courses like accountancy, actuarial science, business, capital markets, commerce, economics, finance, financial engineering, financial planning, computational finance and insurance; or
- Have a professional finance-related qualification. Examples of this would include the Chartered Financial Analyst Exam conducted by the CFA Institute, USA and the Association of Chartered Certified Accountants (ACCA) Qualifications
Have at least 6 transactions in unlisted Specified Investment Products (investment linked products or unit trusts) in the last 3 years;
Have a minimum of 3 consecutive years of working experience[@legal-experience] in the past 10 years in the development, structuring, management, sale, trading, research and analysis of investment products or the provision of training in investment products. (Work experience in accountancy, actuarial science, treasury or financial risk management is also considered relevant experience)
Support functions in the above-mentioned areas that are administrative or clerical in nature will not be considered as relevant experience.
How often will I need to go through the CKA? How long is a 'pass' valid for?
If you are assessed to have fulfilled the requirements of the CKA, the positive outcome will be valid for one year from the date of your assessment. On the expiry date, we will need to conduct a new CKA before allowing you to continue your usual online transactions with HSBC.
To renew your CKA, you may access 'Document Centre' via the 'Wealth Dashboard' in your HSBC Online Banking or via "Wealth" tab in your HSBC Mobile Banking app.
If you do not meet the requirements of the CKA, you may need to contact our HSBC Call Centre or Relationship Manager.
What does it mean if I do not fulfill the requirements of the CKA? Will I able to place online transactions?
You will not be able to execute online purchases (including new Dual Currency Plus orders or rollovers) yourself. If you wish to invest, investment advice must be provided to you by our Financial Consultants on whether the unlisted specified investment product(s) are suitable before you can proceed with the purchase.
If you are a new investor or need a second opinion to your current portfolio, you can contact your Relationship Manager and they will support you on portfolio review and construction.
Investing and support
How can I invest in Dual Currency Plus?
- If you have an HSBC Everyday Global Account and access to HSBC Mobile Banking:
- You may conveniently place your orders between Monday to Friday, 8:30am to 7:30pm (Singapore time) through the Wealth tab via HSBC Mobile Banking[@trading-hours]
- Orders placed at any time on a non-business day or near cut-off time maybe be processed on the next business day (if applicable)
- If you have an existing Everyday Global Account but no access to HSBC Mobile Banking, refer to the HSBC Online banking FAQ.
What are the ways to reinvest / rollover in Dual Currency Plus?
Below are the ways you can choose to rollover your proceeds upon fixing time:
- Principal + returns
- Principal only
- Add amount to the principal + returns
- Deduct amount from the principal + returns
How can I get more information / help on investing in Dual Currency Plus?
- You may visit our HSBC SG Wealth Centres
- Speak to your HSBC SG Relationship Manager
- Call us on 1800-HSBC NOW (4722 669) in Singapore or (65) 6-HSBC NOW (4722 669) from overseas
- Submit an online enquiry
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