EURO Indexed Deposit

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Agreement for a time deposit of RSD linked with EUR

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Description

Agreed time deposit of RSD amount which is denominated in EUR, earns interest rate and is paid back to depositor based on EURRSD exchange rate in the future (at maturity date)

Specifications/Advantages

  • RSD deposit with the characteristics of a EUR deposit
  • Interest rate is calculated in EUR, pay out in RSD
  • Flexible expiration date
  • Flexible arrangement in case of roll over or buying EUR without additional costs or FX differences
  • Protection of deposit in case of depreciation of RSD

Example

On 24.02.2010 client decides to deposit RSD 10,000,000 in “EUR Indexed Deposit” for 3 months with an interest rate of 3.00%. RSD amount is denominated in EUR at EUR/RSD= 99.55, applied on contract date.

RSD Deposit: RSD 10,000,000 ---> EUR/RSD=99.55 ---> EUR countervalue: EUR 100,452.03

At the maturity date, on 24.05.2010, client will receive back RSD which will be the counter value of initial EUR amount plus interest for specific deposit period converted in RSD at EUR/RSD exchange rate on maturity date, i.e.

EUR countervalue
EUR 100,452.03

EUR countervalue +3%
EUR 101,197.05

EUR/RSD=102.55

Final RSD Deposit
RSD 10,377,757.48

So, even though RSD depreciated, client maintained his capital in EUR terms