What is a dual currency structured investment?
It is a financial instrument that provides a higher fixed return at the end of the term than a deposit.
However, in return for the higher fixed return, the investor undertakes to receive the capital invested converted at a predetermined exchange rate into the currency of conversion specified in the contract, rather than in the original currency, provided that the conditions determined at the start of the investment are met.
Its advantages, disadvantages, and risks
Advantages
- It provides a fixed return higher than deposit interests.
- You can choose the product that suits you best from a range of conditions.
- The conversion rate is notified at the launch of the product. If the capital invested is converted, the conversion rate is more favourable in each case than the spot currency exchange rate available at the launch of the product.
Disadvantages, risks
- The investment is not capital guaranteed. The investor assumes an exchange rate risk, on the basis of which the converted capital returned at maturity may lose value compared to the original currency.
- If the capital invested is converted, it is always at a less favourable rate than the market exchange rate at maturity.
- It is not possible to terminate the investment during the term.
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