Interest Rate-linked Deposit - Callable Fixed Deposit

Indicative Telegraphic Transfer rates as at 22 Nov 2008 08:23 HKT

Why are Callable Fixed Deposits right for you?

Place your deposit for as low as USD25,000 or equivalent with Business Internet Banking
Higher interest rate than that available on traditional time deposits
100% capital protection at maturity

Other benefits

The interest rate is fixed and there is no uncertainty about the return
Wide selection of deposit currencies and tenors

What is Callable Fixed Deposit ‘CFD’?

It is a principal protected deposit which offers a fixed coupon rate and can be early terminated at the bank’s discretion.
The following hypothetical example illustrates the deposit mechanism:

Deposit Currency	USD
Deposit Tenor	3 months
Interest Rate	Fixed, 1.72%p.a. (payable quarterly)
Call Frequency	Quarterly

Early Redemption Scenarios:

On each quarterly interval (not including maturity date), the bank will determine whether to terminate the deposit or continue.

Scenario 1 :
If the bank decides to exercise the call, the deposit will be terminated and customer will get back 100% of the principal amount together with the fixed coupon for that quarterly interest period.
Customer will not get any further coupon thereafter.

Scenario 2 :
If the bank decides not to exercise the call, the deposit will continue to roll. Customer will get the fixed coupon for that quarterly interest period on the immediate interest payment date.

At Maturity:
If the deposit has not been called before, customer will get back 100% of the principal amount together with the fixed coupon for the last quarterly interest period.

Note:
The information does not constitute a solicitation for the making of any deposit, or investment in any products referred to herein. The above deposits are not the same as nor should they be treated as a substitute for normal fixed time deposits. The return in relation to a deposit will depend upon market conditions prevailing at the relevant fixing time(s) during or in respect of the relevant deposit period. The level of the underlying asset may go up or down during such period and this will affect the return. The return may be less than would have been payable on a normal time deposit for the same period. You must be prepared to risk the interest that might otherwise have been earned on money invested as a deposit. If the deposit is not in your home currency, and you choose to convert it back to your home currency upon maturity, you may make a gain or loss due to exchange rate fluctuations. Investment involves risks. You should carefully consider whether any investment products or services mentioned herein are appropriate for you in view of your risk appetite, investment experience, objectives, financial resources and circumstances. If you have any concerns about the products you should consult your professional advisers. For details on the relevant deposits, please refer to the Terms and Conditions, the relevant appendices and the fact sheets, all of which are available at HSBC branches from time to time.

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