The FINANCIAL — Tbilisi, December 18, 2008 – From now onwards, TBC Bank is offering its clients a new, unique term deposit – the Golden Deposit. The peculiarity of the Golden Deposit is that TBC Bank guarantees additional security of the deposit by the gold purchased by the bank.
For centuries gold has always been one of the most stable currencies in the world. The price of gold has never gone down, on the contrary, the price always goes up and by the end of 2008, the cost of gold has reached its peak, meaning 1 ounce of gold costs USD 1,000. Experts forecast even more growth regardless of the global financial crisis. The price of gold will increase in the upcoming months due to the above-mentioned crisis.
Golden Deposit is a term deposit which is secured with gold. In order to receive maximum profit and ensure additional security of the deposit, TBC Bank will strengthen the deposit with the gold purchased at the New York Mercantile Exchange (NYMEX). It means that along with additional security guarantees, the owner of a Golden Deposit will be able to receive interests accrued in accordance with the price of gold.
Interests will be accrued in accordance with the changes in the price of gold. This makes up to 16% in case of increase and guaranteed annual 9% if the price of gold decreases.
For instance, if during one year the price of gold:
Decreases or increases from 0% to 9% only – the accrued interest will be guaranteed 9%.
Increases from 9 up to 16% (e.g. 15%) – The deposit will accrue an interest rate which is equivalent to the increased price (in this example an annual 15%).
Is over 16% – the interest rate will be accrued in accordance with the maximal interest rate (i.e. an annual 16%).
The term of the Golden Deposit is 1 year and any individual or legal entity can open it with just a minimal initial deposit of USD 500. Interest is accrued on the deposit at the end of its term.
Q. What is the advantage of Golden Deposit over an ordinary term deposit?
A. Golden Deposit is secured with gold for additional security. Therefore, although annual guaranteed interest accrued is 9%, that is by 2% less than the standard deposit rate, as the price of gold increases a client will have the opportunity to receive extremely high interests amounting to 16% in USD.
Additional information about the gold deposit:
Q. What does “secured with gold” mean?
A. To ensure your security and to give you maximal benefit, TBC Bank will strengthen the deposit with the purchased gold. Meanwhile, if the price of gold increases, you will be able to get additional interest. Deposits secured with gold are very popular in East European countries.
Q. What does change in price mean?
A. The change of gold price means difference between the final and initial prices fixed at the New York Mercantile Exchange. This is how the difference is calculated:
, with P1 meaning initial price of gold and P2 – final price.
Q. How are the initial and final prices identified?
A. The initial price of gold is the price of 1 ounce of gold in USD fixed at the New York Merchantile Exchange the day before the deposit account was opened.
The final price of gold is the cost fixed on the 25th of the previous month before the termination of the deposit term. Again, this is the cost of one ounce of gold in USD fixed at the New York Merchantile Exchange.
Q. How can we identify the price of gold?
A. The price can be checked on the TBC Bank web-site – www.tbcbank.ge – and at the web-site of NYMEX – www.nymex.com.
Q. What is the guarantee that the price of gold will increase?
A. Gold has been the most stable currency for centuries. The price of gold has been increasing every year. Only in the last 5 years, the price of gold has doubled. As a rule, the price goes up in a period of economic crisis as well as in the economy development process. It is very likely that the price of gold will increase in the future and together with guaranteed interest rate, your deposit will accrue much higher interest.
The price of gold reached its peak at the end of 2008, i.e. one ounce of gold costs USD 1,000. Based on the specifics of the economic cycle, it has decreased to the level it had in July 2007. With the backdrop of the global economic crisis, experts expect price growth in the nearest 6 months.
Q. What happens if I withdraw a deposit earlier than its termination and what is the interest accrued in this case?
A. In the event of premature cancellation of an agreement, the deposit will accrue 2% from the date of opening until the date of termination. If this is the case, the difference between the initial and final prices is not considered.
Q. Can I get gold instead of money after the deposit term expires?
A. Although the bank buys gold to strengthen your gold deposits, it cannot be split in parts and shared between the deposit holders. Respectively, gold cannot be granted instead of money.
Q. Is it possible to change the deposit amount in the period of the Gold Deposit?
A. If you want to add money to the deposit, you can open a new deposit from only USD 500, but if you need money you can cancel the deposit or get a loan secured by the deposit in about an hour.
Written By Madona Gasanova
