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Frequently asked questions about the Progressive deposit

What serves as an investment in the Progressive Deposit?

The financial means invested in the Progressive Deposit are split in two parts. The largest part of the amount is being deposited and serves as a security guarantee. A base asset market option is purchased for the smallest part of the investment and risk premium. This part ensures equal or a little higher profit opportunity to the direct investment. The earned income of the option if there is any, will be paid out as interest by the bank at the end of the deposit term.

How is the Progressive Deposit different from other deposits?

At the time of making the investment the return on investment or the interest income is unknown or is only known in the form of guaranteed income. The possible profit of Progressive Deposit is determined by the changes in financial markets, meaning that in case of favourable market conditions, you are able to earn higher interest in Progressive Deposit in comparison to other deposit investments. If the investment is not going to bring any profit due to negative market conditions, bank guarantees you to repay the amount of deposit in full at the end of the deposit term.

What is base asset?

The price of base asset determines the profitability of the investment. The base asset of the Progressive Deposit is most often made by particular industry's or region's share index, raw material, currency or from market conditions independent from strategy indices. Each offer of the Progressive Deposit is based on the possible estimated increase of the base asset price.

What does the guaranteed interest mean?

The guaranteed interest means that at the end of the investment term you will not earn less than the stated guaranteed interest rate.

How is the profitability of Progressive Deposit calculated?

The interest rate of return of the Progressive Deposit is calculated by taking in consideration the changes of base asset that have occurred in the time period starting from the moment of making the investment. The final evaluation of the base asset at the end of the investment term is made by a certain number of base asset measurements (average), that are made during the last year of the particular investment period. If the price increase of the base asset is sufficient, investment works out with a profit. If the price, contrary to expectations, does not change, the bank repays the invested amount in full at the end of the investment period.

What is the risk premium of the Progressive Deposit?

Depending on the risk you are willing to undertake, you can choose from two options:
  •     Progressive Deposit without risk premium: no matter the market condition, you will receive the invested amount in full after the end of the investment period. In case of positive market results you will also gain profit – part of the value changes of the base asset stated in the offer (index, shares, goods or other assets).
  •     Progressive Deposit with risk premium: in addition to the invested amount, you also pay risk premium to the bank which repayment is not guaranteed at the end of the investment term. By paying the risk premium, your possible profit in case of an increase of the base asset value is higher. Your participation in the investment can even overreach 100% meaning that the Progressive Deposit can be more profitable than direct investments. In case of negative market result, the amount of losses will not overreach the amount of risk premium. In case of increasing market indices, the investment will start bringing profit when the earned income will overreach the amount of the paid risk premium.

What does the volume of participation in the Progressive Deposit mean?

Volume of participation is the rate of expected changes of the base asset value or investor's right to have a part of the total profit. The profit of investment rate is calculated by multiplying the value of the participation by the changes of the base asset value. The value of the participation is determined at the day of making the investment and it is fixed for the whole investment term. Meaning that the higher is the participation, the higher profit is possible in case of positive market results.




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