EQUITY-LINKED ACCOUNT

Opportunities in equities.

Opportunities in equities.

A Citibank Equity-Linked Account is a short tenure (1 to 6 months) non-principal protected investment that involves an embedded put option which gives the bank the right to pay you principal and interest earned in either the base currency (the currency in which your initial investment was made) or the underlying share (the share which the principal could be used to purchase). A part or all of the interest that you earn on the Citibank Equity-Linked Account represents the premium that the bank pays you for the embedded put option.

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Benefits
  • You can enjoy the potential to receive better returns than a traditional time deposit if your view on share price movement of the underlying share is correct.
  • You can enjoy a flexible tenure of anywhere between 1 to 6 months.
  • You can seek exposure to a specific underlying share at a pre-agreed share price ('Strike Price') as well as benefit from the enhanced interest rates that arise from the option premium you receive.
Features

How a Citibank Equity-Linked Account can work for you:

Assuming that you have invested USD 50,000 in a one-month Citibank Equity-Linked Account, with USD as your base currency and XYZ Ltd as your underlying share1. Depending on your investment strategy and market conditions, a Strike Price will be determined. For the purposes of illustration, assume the Strike Price is USD 10.00 (95% of the share price of USD 10.53). The interest rate that you will receive is 11.25% p.a.

At Expiry Date, this is what you could expect to happen:

  1. If the closing price of the underlying share falls below the Strike Price, you would effectively be buying XYZ Ltd at the Strike Price of USD 10.00 (Scenario 1).
  2. If closing price of the underlying share is at or above the Strike Price, you will receive your principal and interest in USD on Maturity Date plus 5 exchange business days (Scenario 2).
  Scenario 1 Scenario 2
Expiry Date (3 business exchange days before Maturity Date) Closing price of XYZ Ltd shares falls below the Strike Price (e.g., share price moves down from USD 10.53 to USD 9.80) Closing price of XYZ Ltd shares is at or above the Strike Price (e.g., share price moves down from USD 10.53 to USD 10.20)
Maturity Date plus 5 exchange business days Interest in USD plus XYZ Ltd shares2 Principal and Interest in USD
Amount Payable or Shares Deliverable Interest: (USD 50,000 x 11.25% x 30/365) =

USD 462.33 and

Shares: USD 50,000/USD 10

= 5,000 of XYZ Ltd shares

Principal: USD 50,000 +

Interest: (USD 50,000 x

11.25% x 30/365) =

USD 50,462.33

Gain or loss

If you decide to realize loss by selling the underlying shares at market price of USD 9.80, loss is USD 1,000 [(5,000 x USD 9.80) - USD 50,000]

Gain of USD 462.33

1The hypothetical gains and losses shown in the above 2 scenarios are meant for illustrative purposes only regarding product mechanics for calculating the potential returns and gains or losses. The levels / movement / trends shown have no reference to historical data and are not actual or indicative of future performance.

2Citibank has the discretion to pay cash instead of delivering the underlying share in the event of unforeseen circumstances, due to but not limited to, unavailability of shares. The amount of cash payable will be computed based on the closing price of the underlying share on the Expiry Date multiplied by the quantity of the underlying share to be delivered as stated in the written confirmation. In such a case, an immediate loss on the principal will be realized.

How to Apply

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  • Simply complete the form and we will be in touch with you shortly
  • If you have further enquiry, click here to drop us a note
  • Simply contact your Relationship Manager or our 24-hour CitiPhone Banking at +65 6224 5757+65 6224 5757.
  • If you have further enquiry, click here to drop us a note
Faqs

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When establishing a Citibank Equity-Linked Account, timing, choice of base currency, choice of underlying share, tenure and your personal investment references are all crucial. You may consider the Citibank Equity-Linked Account if:

  • You are generally bullish on the underlying share.
    You are of the view that you have a high probability of receiving your principal and interest in cash because the closing price of the underlying share on Expiry Date (the date on which the closing price of the underlying share is compared to the Strike Price to determine outcome of the Citibank Equity-Linked Account) is likely to be at or above the Strike Price.
  • The share price of the underlying share appears to be stable.

    In this case, the limited share price movement means you will benefit from the higher interest by establishing a Citibank Equity-Linked Account. This higher interest may cushion some of the loss if your principal is used to purchase the underlying share at the Strike Price.

  • You are willing to receive physical delivery of the underlying share at the predetermined Strike Price if the share trades below the Strike Price on a certain date resulting in an unrealized loss of capital on investment.
  • You are willing to accept no principal protection at maturity.

Please speak to your Relationship Manager to determine the suitability of this product in light of your financial objectives and risk profile.

As with any other investment, there are risks associated with your investment in a Citibank Equity-Linked Account.

  • There is risk of losing part of your principal, when the Citibank Equity-Linked Account is exercised to purchase the underlying share and interest earned will be paid using the base currency.
  • Should the market move against you, you must be prepared to purchase the underlying share at the agreed Strike Price, which would be less favorable than the prevailing Share Price at the maturity of your Citibank Equity-Linked Account.
  • The Citibank Equity-Linked Account is not a bank deposit, nor obligation of, nor guaranteed by Citibank Singapore Ltd, Citibank, N.A., Citigroup Inc. or any of its affiliates or subsidiaries. The Citibank Equity-Linked Account is not subject to the provisions of the Deposit Insurance and Policy Owners' Protection Schemes Act 2011 of Singapore and is not eligible for deposit insurance coverage under the Deposit Insurance Scheme.

Step One

On Transaction Date (Date of Subscription with Citibank), place your principal in the Citibank Equity-Linked Account.

Step Two

Choose an underlying share and decide on the tenure of your Citibank Equity-Linked Account. The tenure can range from 1 to 6 months. The tenure is the number of days between Value Date (Start Date of Citibank Equity-Linked Account) and Maturity Date (Date on which the principal and interest in base currency or interest in base currency and underlying share are due to the investor).

Step Three

Depending on your investment strategy and market conditions, you select a Strike Price. You will then be quoted the interest rate for your Citibank Equity-Linked Account.

Step Four

On Maturity Date, you will receive the principal and interest earned in the base currency if the option embedded in the Citibank Equity-Linked Account has lapsed. In the event the option embedded in the Citibank Equity-Linked Account is exercised, your principal will be used to purchase the underlying share and interest earned will be paid in the base currency. Whether the option embedded in the Citibank Equity-Linked Account is exercised or lapsed is determined by comparing the Strike Price with the closing price of the underlying share on Expiry Date (date on which the closing price of the underlying share is compared to Strike Price to determine the outcome of the Citibank Equity-Linked Account). If the closing price of the underlying share is at or above the Strike Price, you will receive your principal and interest in the base currency. If the closing price of the underlying share falls below the Strike Price, you will effectively be using your principal to buy the underlying share at the Strike Price.

Citibank has the discretion to pay cash instead of delivering the underlying share in the event of unforeseen circumstances, due to but not limited to, unavailability of shares. The amount of cash payable will be computed based on the closing price of the underlying share on the Expiry Date multiplied by the quantity of the underlying share to be delivered as stated in the written confirmation. In such a case, an immediate loss on the principal will be realized.

Disclaimers

Unlike bank deposits, Citibank Equity-Linked Accounts are subject to investment risks and potential returns may vary, depending on the official closing price of the underlying share on the Expiry Date.

If the closing price of the underlying share is at or above the Strike Price, principal and interest in the base currency will be payable. If the closing price of the underlying share falls below the Strike Price, interest in the base currency will be payable and the underlying share will be delivered. Citibank has the discretion to pay cash instead of delivering the underlying share in the event of unforeseen circumstances, due to but not limited to, unavailability of shares. The amount of cash payable will be computed based on the closing price of the underlying share on the Expiry Date multiplied by the quantity of the underlying share to be delivered as stated in the written confirmation. In such a case, an immediate loss on the principal will be realised.

Prior to entering into a transaction, investors should consult with their own legal, regulatory, tax, financial and accounting advisors to the extent they consider it necessary, and make their own investment decisions (including decisions regarding the suitability of this transaction) based upon their own judgement and advice from those advisors they consider necessary.

In the event that investors choose not to seek advice from a financial advisor, they should carefully consider whether this product is suitable for them in light of their investment objectives, financial means and risk profile. In establishing the Citibank Equity-Linked Account for investors, Citibank Singapore Limited acts as a principal and not as an agent. Repayment of Citibank Equity-Linked Account is subject to the laws and the regulations of Singapore.

The Citibank Equity-Linked Account is not a bank deposit, nor obligation of, nor guaranteed by Citibank Singapore Ltd, Citibank, N.A., Citigroup Inc. or any of its affiliates or subsidiaries. The Citibank Equity-Linked Account is not an insured product under the provisions of the Deposit Insurance and Policy Owners' Protection Schemes Act 2011 of Singapore and is not eligible for deposit insurance coverage under the Deposit Insurance Scheme and is not insured by the Federal Deposit Insurance Corporation.

Citibank full disclaimers, terms and conditions apply to individual products and banking services.