A Citibank Equity-Linked Account is a short tenure (1 to 6 months) non-principal protected investment that involves an embedded put option which gives the bank the right to pay you principal and interest earned in either the base currency (the currency in which your initial investment was made) or the underlying share (the share which the principal could be used to purchase). A part or all of the interest that you earn on the Citibank Equity-Linked Account represents the premium that the bank pays you for the embedded put option.

BENEFITS

You can enjoy the potential to receive better returns than a traditional time deposit if your view on share price movement of the underlying share is correct.
You can enjoy a flexible tenure of anywhere between 1 to 6 months.
You can seek exposure to a specific underlying share at a pre-agreed share price ('Strike Price') as well as benefit from the enhanced interest rates that arise from the option premium you receive.


FEATURES

Assuming that you have invested USD 50,000 in a one-month Citibank Equity-Linked Account, with USD as your base currency and XYZ Ltd as your underlying share1. Depending on your investment strategy and market conditions, a Strike Price will be determined. For the purposes of illustration, assume the Strike Price is USD 10.00 (95% of the share price of USD 10.53). The interest rate that you will receive is 11.25% p.a.

At Expiry Date, this is what you could expect to happen:

If the closing price of the underlying share falls below the Strike Price, you would effectively be buying XYZ Ltd at the Strike Price of USD 10.00 (Scenario 1).
If closing price of the underlying share is at or above the Strike Price, you will receive your principal and interest in USD on Maturity Date plus 5 exchange business days (Scenario 2).


https://www.ipb.citibank.com.sg/english/investments/short-te...

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Note added at 19 hrs (2018-01-01 15:16:25 GMT)
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(e) Equity Linked Accounts -

Equity Linked Accounts are accounts where the amount of interest payable or any other return is to be calculated in whole or in part by reference to changes in the market prices of a single share or other security or a basket of shares or other securities specified in the relevant Equity Linked Account Confirmation, or in the levels of a single index or a basket of indices specified in the relevant Equity Linked Account. Equity Linked Accounts carry risks not normally associated with ordinary bank deposits and are generally not a suitable substitute for ordinary savings or time deposits. Equity Linked Accounts are speculative and are not appropriate if you are not willing or able to accept the risk of adverse movements in the reference value.

The return on Equity Linked Accounts will be dependent, to at least some extent, on movements in the reference value.
The price of shares or the level of an index may go down as well as up and past performance is not necessarily a guide to future performance. A short term investment in an equity linked investment such as an Equity Linked Account is likely to involve a greater risk of loss than a long-term investment.

An Equity Linked Account is “principal protected” or “principal-at-risk.” Where an Equity Linked Account is principal protected, only the interest or yield on the account may be affected by movements in the relevant reference value and that the principal amount deposited will be repayable in full at the end of the account period. The total return on a principal protected Equity Linked Account cannot be negative, but may be zero or significantly less than the return which might be obtained on a normal time deposit in the event of an adverse movement in the relevant reference value. Where an Equity Linked Account is principal-at-risk, interest or yield may be affected by movements in the relevant reference value and all or part of the principal may be lost as a result of loses caused by such movements. The total return on a principal-at-risk Equity Linked Account may be negative as well as zero or significantly less than the return which might be obtained on a normal time deposit in the event of an adverse movement in the relevant reference value. In the case of either a principal protected or principal-at-risk Equity Linked Account, where an Equity Linked Account is withdrawn by you prior to its scheduled maturity date, the adjustment made by reason of early repayment may result in a negative return.

Equity Linked Accounts cannot generally be cancelled or withdrawn by you prior to the agreed maturity date without the consent of the Bank unless the terms of an Equity Linked Account expressly provide for it. If the Bank does consent to an early withdrawal, it will be subject to conditions that the Bank, in its absolute discretion, may impose, including the condition that the amount of any cost or loss suffered by the Bank by reason of early withdrawal or cancellation is deducted from the account. Such costs and losses may include the cost of unwinding a hedging position taken by the Bank to cover the account, and may result in a lower rate of return than might be expected, or even a negative rate of return.

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