Dual Currency Deposit (DCD) Account

This account combines a money market deposit account with a currency option to provide a higher yield than that available for a standard timed deposit. There is a higher risk than with the latter - the depositor can receive less funds than originally deposited and in a different currency. So one could do a USD/TL DCD (Dual Currency Deposit) depositing USD and receive TL.

The Dual Currency Deposit (“DCD”) is a foreign exchange linked deposit in which the principal can be repaid after being converted into the alternative currency at the strike rate on the maturity date depending on the spot foreign exchange rate. The returns are higher than the returns on normal timed deposits in compensation for the higher risks that are associated with DCDs due to being exposed to foreign exchange.

For details of this and other investment products please visit any of the İktisatbank branches or call our Telephone Banking on 444 4 444.

Dual Currency Deposit (DCD)

Dual Currency Deposit is a product to the customers who want to gain an additional income or an alternative to deposits interest. This investment product is preferred by customers who wants to gain more, with the risk of foreign exchange.
You will be gaining two different profits as DCD option premium and deposit profit.

  • Customer; sells the right of selling or buying in any currency determined, a specific term with certain price to the bank. In exchange gains option premium.
  • The amount you deposit will be in a time deposit account until the maturity date and the customer gains interest from the amount.
  • Customer aims to achieve a high profit by taking an exchange rate risk.
  • This product is not a capital protected, the risk of the transaction varies depending on the movement of exchange rates on the market.
  • The amount available can not be used before the maturity date.
  • The minimum transaction amount is 100.000 USD and equivalent amounts.
  • To our customers who wants to take the risk of gaining extra interest on the interest of the deposit.
  • To the customers who follows the foreign exchange market and wants to gain the future foreign exchange expectations.
Example Transaction 1:

This is suitable for the customers that think the USD/TL exchange rate would not be higher or to the customers who wants to exchange their foreign exchange to TL from a suitable level.

Transaction Amount

USD 100,000 -

Maturity Date

32 day

Spot Market Rate

1,9300 (usd/tl)

Agreement Rate

1,9500 (usd/tl)

Option Primium

%7

Deposit Interest

%4 (gross)

Total Gain

%11 (gross)

If the exchange rate of USD/TL lower than agreement rate 1.9500 at the maturity date:

The bank does not use the right owned according to the primium that is paid, the amount stays as USD.

If the exchange rate of USD/TL higher than agreement rate 1.9500 at the maturity date:

The bank uses the rights owned according to the primium that is paid and the amount will be exchanged to TL with the agreement rate of USD/TL 1.9500.

In both cases option primium will be in the account at the next working day of the transaction date; the deposit interest; will be in the account at the maturity date.

As you can see at the example, the advantage of the transaction is higher than any deposit interest gained in the market. However, the possibility of exchange rates going up very hard at the maturity date; this causes the customers foreign exchange on lower level. It is notcapital protected productYour loss would be much more if the exchange rate at the market is higher than the agreed exchange rate at maturity date.

Example Transaction 2:

This is suitable for the customers that think the USD/TL exchange rate would not be lower or to the customers who wants to exchange their foreign exchange to TL to USD from a suitable level.

Transaction Amount

TRY 100,000 -

Maturity Date

32 day

Spot Market Rate

1.9300 (usd/tl)

Agreement Rate

1,9000 (usd/tl)

Option Primium

%4

Deposit Interest

%8 (gross)

Total Gain

%12 (gross)

If the exchange rate of USD/TL higher than agreement rate 1.9000 at the maturity date:

The bank does not use the right owned according to the primium that is paid, the amount stays a TL.

If the exchange rate of USD/TL lower than agreeent rate 1.9000 at the maturity date:

The bank uses the rights owned according to the primium that is paid and 100,000 TL will be exchanged to USD with the agreement rate of USD/TL 1,9000.

In both cases option primium will be in the account at the next working day of the transaction date; the deposit interest; will be in the account at the maturity date.

As you can see at the example, the advantage of the transaction is higher than any deposit interest gained in the market. However, the possibility of exchange rates going up very hard at the maturity date; this causes the customers foreign exchange on lower level. It is notcapital protected productYour loss would be much more if the exchange rate at the market is higher than the agreed exchange rate at maturity date.

Knock Out DCD

1. Customer; sells the right of seling or buying in any currency determined, a specific term with certain price to the bank. In exchange gains option premium.

If the exchange rate reaches the determined barrier between the term the optiın will be cancelled and will expire.

2. Customer will gain deposit interest between the option terms.

  • Customer gains much more by taking exchange rate risk.
  • This product is not a capital protected, the risk of the transaction is changed according to the exchange rates movements at the market.
  • If the exchange rate reaches the determined barrier between the term the option will be cancelled and will expire.
  • The amount can not be used before the maturity date.
  • Applicable in all currency pairs. (USD/TRY, EUR/TRY, EUR/USD,.....)
  • This product may be advisable for investors who have experience in derivative transactions.
  • This products is for customer who thinks deposit interest is not enough and want to gain extra funds in addition to it.
  • To the customers who follows the foreign exchange market and wants to gain the future foreign exchange expectations.
Example Transaction :

This is suitable for the customers that think the USD/TL exchange rate would not be higher or to the customers who wants to exchange their foreign exchange to TL from a suitable level.

Amount

USD 1,000,000

Term

1 year

Spot Market Rate

USD/TL 1,9500

Agreement Rate

2,1000

Knock Out Rate

1,9250

Option Primium

USD 15,000

If USD/TL exchange rate reaches 1,9250 between the term option will be cancelled. This way customer does not have any risk no longer and does not have to wait until maturity date. However, in every condition our customers receives the option premium of 15,000 USD.

If the USD/TL exchange rate does not reach the 1,9250 level between the terms, arises the possibility of two different results as follows.

These possibilities are realized if;The bank uses the rights owned according to the primium that is paid

  • If the USD/TL exchange rate stays under the level of 2,100 at the end of the year (maturity date); The bank does not use the option rights and the customer's funds stays as 1,000,000 USD. Customer gains 15,000 USD premium.
  • If the USD/TL exchange rate stays on top of the level of 2,100 at the end of the year (maturity date); The bank uses the option rights owned according to the primium that is paid and will exchange the dolar of the customer with USD/TL 2,1000 exchange rate and 2,100,000 will be in the account. Customer gets the 15,000 USD in any case.