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How the Callable Investment Product Works
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The Bank pre-sets the Return Rate. |
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The Bank shall have the right to redeem the Investment Product on any Callable Date and the number of Callable Date(s) will be predetermined by the Bank. If the Bank determines to early redeem the Investment Product, the Bank will give prior notice to the investors. |
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The investors can still enjoy the predetermined Return Rate for the investment period prior to the Bank’s early redemption of the Investment Product. |
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Repayment of Investment Amount and fixed Return if the Investment Product is held to the Maturity Date or Call Date (as the case may be). |
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The Investment Amount and Return on the Maturity Date or Call Date (as the case may be) will be settled in the Base Currency. |
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Early termination by investors is not allowed for the Investment Product during the Investment Period. |
Illustrative Examples 1
| Base Currency |
:USD |
| Investment Amount |
:USD 100,000 |
| Investment Period |
:1 year |
| Annual Return Rate |
:4.00% p.a. (Fixed) |
| Return Rate Calculation Basis |
: |
30 / 360 (for USD as Base Currency, Return is calculated on the basis of a year of 360 days and 12 months of 30 days. Please refer to the product terms and conditions for detailed calculation basis.) |
| Interim Return |
:No |
| Number of Callable Dates |
:Every 3 months |
The Bank shall have the right to redeem the Investment Product on any Callable Date, i.e. every 3 months. If the Bank determines to early redeem the Investment Product, the Bank will give the investors no less than 5 Business Days’ prior notice and will repay the investors the Investment Amount and Return on the Call Date. Investors do not have the right to early terminate the Investment Product.
Scenario 1 - Held to Maturity
If the Investment Product has not been early redeemed by the Bank, investors can receive the Investment Amount and Return for the whole Investment Period at maturity, which is the highest return investors can get from the Investment Product. The total Return at maturity is calculated as follows:
Return |
Total Return on Call Date
|
Return = |
Investment Amount x Return Rate x
(no. of months in Investment Period x 30 / 360) |
= |
USD100,000 x4.0%x360/360 |
= |
USD4,000 |
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| Total Return at Maturity |
= |
Investment Amount + Return |
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= |
USD100,000 +USD4,000 |
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= |
USD104,000 |
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Scenario 2 - Redeemed by the Bank on the 1st Callable Date
If the Investment Product has been redeemed by the Bank after 3 months, i.e. on the 1st Callable Date, investors have only held the Investment Product for 3 months. On the Call Date, investors can receive the Investment Amount and the Return for the 3 months based on the Bank’s pre-set Return Rate. The total Return on Call Date is calculated as follows:
Return |
Total Return on Call Date |
Return= |
Investment Amount x Return Rate x
(no. of months in Investment Period x 30 / 360) |
= |
USD100,000 x4.0%x90/360 |
= |
USD1,000 |
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| Total Return on Call Date |
= |
Investment Amount + Return |
| = |
USD100,000 +USD1,000 |
| = |
USD101,000 |
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Note: All figures used in the above example are for illustration only. The actual return may be higher or lower than those used in this example. The product details as specified in applicable Term Sheet shall prevail.
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Illustrative Examples 2
| Base Currency |
:HKD |
| Investment Amount |
:HKD 1,000,000 |
| Investment Period |
:1 year |
| Annual Return Rate |
:3.50% p.a. (Fixed) |
| Return Rate Calculation Basis |
: |
Actual Calendar Days / 365 (for HKD as Base Currency, Return is calculated on the basis of the number of calendar days in the relevant Interim Return Period / Investment Period divided by 365) |
| Interim Return |
: Yes |
| Number of Callable Dates / Interim Return Payment Dates |
:Every 3 months |
The Bank will pay the Interim Return(s) for the relevant Interim Return Period(s) and have the right to redeem the Investment Product on the Interim Return Payment Date(s) / Callable Date(s), i.e. every 3 months. If the Bank determines to early redeem the Investment Product, the Bank will give the investors no less than 5 Business Days’ prior notice and will repay the investors the Investment Amount and Return on the Call Date. Investors do not have the right to early terminate the Investment Product.
Scenario 1 - Held to Maturity
The Investment Product has not been early redeemed by the Bank and investors have held the Investment Product to maturity. The Interim Return(s) of the Investment Product is payable on relevant Interim Return Payment Date(s) and at maturity the investors can receive the Investment Amount and the Return for the last return period (i.e. from the last Interim Return Payment Date to the Maturity Date), which is the highest return investors can get from the Investment Product. The total Return at maturity is calculated as follows:
Interim Return
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Total Return at Maturity |
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= |
Investment Amount x Return Rate x
(Actual Calendar Days1 /365) |
1st Interim Return (90 days)
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= |
HKD1,000,000 x 3.5% x 90 / 365 |
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= |
HKD8,630.14 |
2nd Interim Return (92 days)
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= |
HKD1,000,000 x 3.5% x 92 / 365 |
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= |
HKD8,821.92 |
3rd Interim Return (92 days)
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= |
HKD1,000,000 x 3.5% x 92 / 365 |
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= |
HKD8,821.92 |
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| Total Return at Maturity |
= |
Investment Amount + Return of the last return period (91 days) |
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= |
HKD1,000,000 + HKD1,000,000 x 3.5% x 91 / 365 |
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= |
HKD1,008,726.03 |
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Scenario 2 - Redeemed by the Bank on the 2nd Callable Date
If the Investment Product has been redeemed by the Bank after 6 months, i.e. on the 2nd Callable Date, investors have only held the Investment Product for 6 months. On the Call Date, investors can receive the Investment Amount and the Return for the last return period (i.e. from the last Interim Return Payment Date to the Call Date). The total Return on Call Date is calculated as follows:
Interim Return
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Total Return on Call Date |
| Interim Return |
= |
Investment Amount x Return Rate x
(Actual Calendar Days1 1/365) |
1st Interim Return
(90 days) |
=
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HKD1,000,000 x 3.5% x 90 / 365
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= |
HKD8,630.14 |
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| Total Return on Call Date |
= |
Investment Amount + Return for the last return period (92 days) |
| = |
HKD1,000,000 + HKD1,000,000 x 3.5% x 92 / 365 |
| = |
HKD1,008,821.92 |
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Note:
| 1. |
Actual Calendar Days means the number of calendar days in the relevant return period. |
| 2. |
All figures used in the above example are for illustration only. The actual return may be higher or lower than those used in this example. The product details as specified in applicable Term Sheet shall prevail. |
Comparison of Return of Callable Investment Product and Time Deposit
| Product |
Tenor |
Effect on Movement of
Interest Rate to Return |
Investment Amount
/ Principal |
Return / Interest |
Total Return
at Maturity |
| Callable Investment Product |
USD as Base Currency
(Assumed return rate of 4% p.a.) |
1 Year |
N/A |
USD100,000 |
USD4,000 |
USD104,000 |
HKD as Base Currency
(Assumed return rate of 3.5% p.a.) |
1 Year |
N/A |
HKD1,000,000 |
HKD35,000 |
HKD1,035,000 |
| Traditional Time Deposit |
| USD Time Deposit
(Assumed interest rate of 3% p.a.) |
1 Year |
N/A |
USD100,000 |
USD3,000 |
USD103,000 |
| HKD Time Deposit
(Assumed interest rate of 2.625% p.a.) |
1 Year |
N/A |
HKD1,000,000 |
HKD26,250 |
HKD1,026,250 |
Note: All figures including the interest rate of time deposit in the above example are for illustration only. Please refer to the Bank for up-to-date information. |
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