Also you can call this product as tunnel deposit. The exchange rate stays in the tunnel during the term. At the begining of the maturity a particular exchange rate band is determined. A premium payment will be done according to the exchange rate being under and upper level of the band during the term agreed. Our customer will get the capital amount deposited at the begining of the term. This product is a capital protected.
Why Range Accrual? Who can benifit from this product?
|Spot Market Rate||USD/TL 1,8750|
|Agreement Rate 1||2,0000 (higher than the band)|
|Agreement Rate 2||1,7500 (lower than the band)|
|Indicator Deposit Interest||%7|
The USD/TL exchange rate will be checked every day if it stays in the band gap or not during the terms. For everyday exchange rate stays between the band gap determined 1,7500 and 2,0000 USD/TL the customer gains %12 (yearly) intereset. If you give your funds to a time deposit account you will be gaining %7 interest. For the days exchange rate is out of the band gap determined 1,75000 and 2,0000 USD/TL the customer does not gain %12 (yearly) interest.
1,75000 < %12 (gross annual interest) < 2,000
If we think the exchange rate USD/TL stays between the band for 60 day and 30 days out of the band during term.
The customer does not get any deposit interest or option primium for the 30 days stayed out of the band. For the 60 days stayed between the band will gain %12 interest (option primium).
At this example If our customer does not deposit the funds in time deposit account; can get the opportunity to get %12 yearly (gross) interest.
The option primium will be paid at the end of the maturity date according to the option conditions.