Deposit your money in a base currency, e.g. USD

Select a second currency as the alternate currency to your deposit, e.g. EUR

Agree on the foreign exchange rate also known as the strike price, which will then determine the returns of the YED for a stipulated period

Select the tenure

Prior to the maturity of the YED (normally 2 days), the Bank will determine the currency in which the principal plus returns will be delivered to you. The chosen currency will either be the base or the alternate currency you selected at the start

If the spot exchange rate of the pair is above the Strike price agreed upon, the principal and returns earned will be delivered in the base currency

If the spot exchange rate falls below the Strike Price, you will still earn the stipulated returns on your original deposit in the base currency, but the principal and returns earned in this case will be delivered in the alternate currency

To sum up, the weaker of the 2 currencies will be delivered upon maturity

If in a particular case, the alternate currency is delivered, converting into the original base currency will effectively render your investment dependent on the prevailing exchange rate that will make you face the risks of exchange rate fluctuations

Earn higher returns on your time deposits

Be assured of receiving returns on the deposits on maturity

Receive your principals and returns in either the base or alternate currency that you have chosen depending upon the spot foreign exchange rate on maturity