Dual Currency Deposit (DCD):
(Additional income to deposit interest rate)
It consists of selling an option to the bank on any currency pair, thus getting a certain amount of option premium in addition to time deposit return.
Example: (for USD time deposit )
| Amount |
1.000.000 USD |
| Expiry |
19/08/2010 |
| Spot Rate |
1,5450 USD/TL |
| Strike |
1,6000 |
| Option Premium |
%4,12 (3.500. – USD) |
| Deposit Interest Rate |
% 3,50 (Net: % 2,975) |
| Total |
% 7.095 (Net) |
- If the USD rate is above 1,6000 at the end of the maturity,
DenizBank exercises the option and buys 1.000.000 USD from the client at 1,6000 USD/TL rate
- If the USD/TL rate is below 1,6000 at the end of the maturity,
DenizBank does not exercise the option.
The option premium will be transferred to the client’s bank account in the next business day and client gets the premium in any case. The client gets the deposit interest rate at the end of the maturity.
Example 2: (for TL time deposit)
| Amount |
1.000.000 TL |
| Expiry |
29/08/2010 |
| Spot Rate |
1,5221 USD/TL |
| Strike |
1,5000 |
| Option Premium |
%4,20 (4.378. – TL) |
| Deposit Interest Rate |
% 9,10 (Net: % 7,74) |
| Total |
% 11.94 (Net) |
- If the USD/TL rate is above 1,5000 at the end of the maturity,
DenizBank does not exercise the option
- If the USD rate is below 1,5000 at the end of the maturity,
DenizBank exercises the option and sells 1.000.000 TL to the client at 1,5000 USD/TL rate
The option premium will be transferred to the client’s bank account in the next business day and client gets the premium in any case. The client gets the deposit interest rate at the end of the maturity.