Citibank Premium

[thaidrew]

Does anyone here have experience of using the citibank premium deposit where they offer a high interest rate against a strike rate that relates to a proposed future currency exchange?

The deal is that the interest is paid at the end of the term, usually 30 days and that if the currency reaches the stated strike rate then the swap is actioned. It would seem that the exchange rate is very much in the favour of the bank and is a sure fired route to losses. Anyone with more knowledge please. Regards TD

[nikster]

Does anyone here have experience of using the citibank premium deposit where they offer a high interest rate against a strike rate that relates to a proposed future currency exchange?

The deal is that the interest is paid at the end of the term, usually 30 days and that if the currency reaches the stated strike rate then the swap is actioned. It would seem that the exchange rate is very much in the favour of the bank and is a sure fired route to losses. Anyone with more knowledge please. Regards TD

Citibank currently has too much cash in their accounts, so they are trying to give it away as best as they can. They want to give you a very high return so they can start working off their cash overload.

I also have a bridge to sell you - pm me!

[worldfun]

well there's 2 options of the premium account investment outcome right:

1) the exchange rate is equal or better than the strike price for the chosen currency pair & then one would enjoy the interest & the currency transaction & depending that strike price rate may be attractive or not (it better be attractive coz it was set by oneself!)?

2) if instead the exchange rate (spot rate at maturity) is worse than strike price then no currency transaction will be carried out, but the investor will still earn his interest & thus might be better off than earning a lower interest in another investment isn't it?

so I don't see any clear advantage/disadvantage for the investor or citibank. merely like any investment particularly currency trading there's risks & moneyed to be made & this particular setup could be as good as any. surely it's a bit less demanding of the investor than say currency day trading with the various such dealers like oanda etc.

of course the interest rates offered may be below 'market rates' as we all expect citi to want a nice cut for their 'service', but anyone in the know please point to a better currency rate or let us know say how many % citi's is worse than competition?

I may try it out actually as I'm now 'enabled' for it actually...

Edited September 17, 2009 by worldfun