The Dynamic Deposit is a term deposit offering unlimited opportunities of earning profit and a guaranteed deposit amount upon maturity.
The interest earned on the Dynamic Deposit depends on changes in the price of the underlying asset (such as security, equity index or any other financial instrument) linked to the deposit. The more successful performance of the respective underlying asset over the period of time set for the deposit, the higher the interest earned by the customer.
Possibilities and advantages:
- Deposit money in various currencies - LVL or EUR;
- Choose deposit type without risk premium or Dynamic Deposit with risk premium;
Risk premium means a non-refundable additional instalment, which enables a considerably higher participation in the rise of the value, thus greatly increasing the potential profit on the deposit upon maturity. If the price of the underlying asset drops or remains the same, only the risk premium will be lost.
- Sign up for deposit during specially organized campaigns, but put the total transaction amount in the principal account on the Deposit Opening Date. Deposit will be active at the end of this date when the funds will be automatically transferred to the deposit account;
Total transaction amount is formed of the deposit amount, which is 100% guaranteed upon maturity and the additionally paid non-refundable risk premium if it is defined for the particular type of deposit.
- allow automatic conversation on the expected Deposit Opening Date;
Automatic conversation means that when the deposit is activated, the bank can convert total transaction amount into the deposit currency at that day’s exchange rate of the bank in case the client lacks sufficient funds in the deposit currency.
- get unlimited earning opportunities provided by being linked at the participation ratio to dynamically growing global financial markets;
The participation ratio represents the share of rise in the price of the underlying asset, which is paid upon maturity for the invested deposit amount. For example, the price of the underlying asset (Eastern Europe Equity Fund unit) surged 67.8% during the maturity of the first Dynamic Deposit. On 2 Jul 2008, clients received 20.3% deposit profit or certain share (30%) of the rise in price.
Deposit Profit = Rise in Price x Participation ratio = 67.8% × 30% = 20.3%
Depozīta peļņa = Cenas pieaugums × Dalības apmērs = 67,8% × 30% = 20,3%
- enjoy 100% security, because, irrespective of any financial market fluctuations, the deposit amount is guaranteed upon maturity;
The 100% security only applies to the deposit amount guaranteed upon maturity. Dynamic Deposit with a risk premium, which is intended for the greatly increasing the potential profit margin, entails investment risk – the client may possibly lose the additional amount paid as the risk premium is never returned.
- receive accrued interest earned and the deposit amount at maturity;
The interest earned on the deposit amount invested is calculated certain share of the rise in price. In case of unfavourable situation on financial markets resulting in the price of the underlying asset dropping or remaining the same, the clients will not earn the interest expected; however, they will always receive the guaranteed deposit amount upon maturity.
- use several Dynamic Deposits simultaneously.
To apply for Dynamic Deposit, you have to:
- Get acquainted with Swedbank’s price list, the general terms and conditions of the Dynamic Deposit Agreement and the Special Conditions for the particular offer.
- Sign a Dynamic Deposit Agreement with the Bank during the campaigns at any branch of Swedbank, via the Internet banking for business clients or by phone 67444444.
- Provide the deposit amount and the unsecured risk premium, if any specified for the relevant offer, in the deposit currency on the Deposit Opening Date. Otherwise, the client’s Dynamic Deposit will not be activated at the close of the day.
