Currency Linked Investments

At a Glance

Tailored to your choice of currency pairs, strike rate and tenor

Potential to earn enhanced yields on the principal amount invested

Choice of investment tenors ranging from 1 week to 6 months

Invest easily on digibank, and compare up to 5 popular currency pairs ^NEW!

You work hard for your loved ones, whether it is supporting your child's education abroad or exploring investments in overseas properties. Perhaps you’re looking to optimise returns on your cash holdings.

Whether it’s a specific financial need or an investment goal, Currency-Linked Investments (CLIs) can potentially let you earn higher returns on your money.

What are Currency-Linked Investments?Currency-Linked Investments are short term dual-currency investments with a currency option. At maturity, you will receive your principal and interest in either your base currency, or the alternate currency (exchanged at the strike rate).They are often used by investors who have a stable or mildly bullish view of a particular alternate currency against that of the base currency, to improve returns on their cash holdings.However, if they have a strongly bullish view of the alternate currency, they might prefer to buy that currency outright at the prevailing market price.NOTE:
CLIs are sophisticated investment products that carry significant risks and are not suitable for investors who do not comprehend the product or are risk averse.

How do CLIs work?You can invest in a CLI with the following steps:

Choose the base currency (your principal) and an alternate currency

Decide on the tenor

Set the strike rate and accept the resulting enhanced yield, or set the enhanced yield and accept the resulting strike rate

Illustrative example of a CLI:Angie has cash in SGD and would like to earn an enhanced yield on her cash. She is moderately bullish on the AUD and expects that the AUD should remain supported against the SGD. She decides to invest in a CLI with the following terms:

Base currency

SGD

Alternate currency

AUD

AUD/SGD exchange rate

0.8743

Strike rate

0.8613

Tenor

1 month

Enhanced yield

5.37% p.a.

Upon expiry, there are two possible scenarios:
Illustrative example of Dual Currency Investments

Scenario A

If AUD/SGD rate (0.9000) is higher than strike rate at expiry, CLI will not be exercised and Angie will receive her principal and enhanced yield in SGD.

Scenario B

If AUD/SGD rate (0.8550) is at or below strike rate at expiry, CLI will be exercised and Angie will receive her principal and enhanced yield in AUD, converted at strike rate.

When to consider investing in CLIsCLIs may be suitable for you if:

A. You need an alternate currency

Angie has set aside SGD in preparation for her child's university expenses in Australia. Investing in CLI allows her to earn a higher yield on her SGD. However, if the CLI investment results in a conversion from SGD to AUD, she is still fine as she requires AUD.

B. You have a stable or mildly bullish view of an alternate currency
For instance, Ben holds SGD and believes that the AUD/SGD spot rate (e.g. currently at 0.8743) is unlikely to fall below 0.8613. He is willing to convert to AUD at that level if it occurs.

He can invest in CLI with a strike rate at 0.8613 to earn an enhanced yield on his SGD. If the rate does fall to or below 0.8613, his principal and enhanced yield will be converted to AUD at that level (which is lower than the current 0.8743).

Benefits of CLIs

Potential yield enhancement

You may earn an enhanced return if your view of exchange rate movements is accurate.

Benefits of CLIs - Tailored to investor Needs

Tailored to the investor’s needs

CLIs can be tailored to suit your needs, based on your choice of currency pair, strike rate, and tenor.

Benefits of CLIs - Short Investment Tenors

Short investment tenors

CLIs are generally short term, ranging from 1 week to 6 months.

Benefits of CLIs - Wide Range of Currencies to choose from

Wide range of currencies to choose from

Invest online with a variety of currency pairs that include USD, EUR, JPY, GBP, AUD, CAD, HKD, CNH, NZD, CHF and SGD.

Risks of CLIs

Foreign exchange risk

The base currency may be converted to the alternate currency at a rate worse than the market at maturity

Liquidity risk

CLIs are meant to be held to maturity. Early withdrawal may result in investors receiving less than the principal amount.

Issuer risk

CLIs are issued by financial institutions and investors are exposed to the issuer’s credit risk.

Invest on digibank Invest effortlessly in a CLI via digibank, Mon - Thurs (8.30am – 10.30pm SGT) and Fri (8.30am – 6.00pm SGT), except Christmas Day and New Year's Day. Prefer a step by step guide? You can refer to this guidebook.

How to view your CLI placementsTrack your placements anytime, via your Wealth Management Account.

Alternatively, you can speak to your Relationship Manager for assistance or download this guidebook for a step-by-step guide on CLIs.

Access CLI on digibankSimply login, select 'Invest' tab, and tap on CLI.

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Apply nowTo open a DBS Wealth Management Account for trading.

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Frequently asked questions

What is CLI and how does it work?

CLIs are dual-currency investments involving a currency option. The option gives the CLI issuer the right to repay the principal and interest at maturity, in either the base currency or alternate currency. Refer to What are CLIs to see how it works.

What is the minimum and maximum amount required for CLI via online channels?

The minimum amount for CLI investment online is US$10,000 (or equivalent) and maximum amount is US$1 Million (or equivalent)

What are the benefits of booking CLI online?

Self-service Price Discovery
Different currency pairs/yields are available for comparison
Smaller minimum size of US$10,000

What is the difference between Fixing & Maturity Date?

The fixing date usually occurs two business days before the maturity date. This is the date & time where the CLI strike rate will be compared to the spot rate to determine if there will be a conversion to the alternate currency. This will occur at 2pm Singapore time / 3pm Tokyo time.

Maturity date is the day on which proceeds of the investment are credited into the investor’s account.

When can I make a CLI placement?

Invest effortlessly in CLI via digibank, Mon - Thurs
(8.30am – 10.30pm SGT) and Fri (8.30am – 6.00pm SGT), except Christmas Day and New Year's Day.