Cash transactions short-term investments

Money market is a short-term money market (short-term capital) with maturity up to 1 year. Reflecting supply and demand for short-term funds, it enables bank’s customers to appreciate their temporarily available funds. Moreover, customers can also hedge against foreseen interest rate volatility in the money market (hedging).

Term deposits

Term deposits present the simplest method of effective appreciation of free capital. Term deposits are available in EUR, USD, GBP, CHF, HUF, PLN and CZK, or in other denominations, and the applicable interest rates are set according to the current interest rates used in the interbank money market and it is applied throughout the entire deposit term.

The advantage of this product is its ability of flexible adjustment to customer requirements, and higher appreciation of capital compared to current accounts. The bank offers the possibility of telephonic arrangement of deposit terms or via internet application Internet Dealing, subjected to a written agreement on term deposits. The minimum amount of funds to be deposited at an individual interest rate is 30 000 EUR or the equivalent in a foreign currency.

Conditions
  • Current account in VUB branch
  • Deposit Framework Agreement signed
Contact

Corporate Sales
02/5055 9650, 02/5055 9630, 02/5055 9620, 02/5055 9610, 02/5055 9595, 02/5055 9520

Depository Note

Depository Note can be used– for short-term investment of funds in various currencies. Its advantages include flexibility (maturity between 14 and 365 days) and yield reflecting the current money market development at the time of negotiating a deal. Deals are closed by phone (under the Framework Agreement) and confirmed by fax afterwards. Depository notes are in custody of VUB. The minimum amount of a deal is 160 000 or equivalent.

Conditions:

Framework Agreement on issuance of investment notes and Agreement on custody of letter investment notes signed.

Contact

Corporate Sales
02/5055 9650, 02/5055 9630, 02/5055 9620, 02/5055 9610, 02/5055 9595, 02/5055 9520

FRA contracs

FRA contracts enable fixing an interest rate for a predefined period of time, and for an agreed amount of capital, with the aim to secure interest rate gains or interest rate expenses against future unfavourable fluctuation of interest rates.

On the date of settlement of such a contract (the first day of the defined period of time) no real movement of the contracted amount of cash occurs, only the discounted difference between the agreed FRA contract rate and the reference rate linked to a period identical to the FRA contract term is paid-out. The reference rate is the time- and currency-linked LIBOR, EURIBOR or PRIBOR for CZK –denominated contracts, and is fixed two days prior to the beginning of the agreed period of time.

Minimum amount of a FRA contract is 300 000 EUR, and any such transaction is subject to a written agreement with the client on FRA contracts.

Conditions

Framework Derivatives Agreement signed

Contact

Corporate Sales
02/5055 9650, 02/5055 9630, 02/5055 9620, 02/5055 9610, 02/5055 9595, 02/5055 9520

Interest rate swaps and options

Interest rate swaps (IRS) present an instrument of interest rate risk hedging, as they provide security against an expected increase or decrease of interest rates. A contract is based on an agreement between two parties on the interchange of interest-bearing payments at the end of an agreed period, based on a predefined principal and agreed period.

The most frequent are contracts based on a combination of fixed and variable interest rates. The reference rate used for defining the variable rates is (G7) LIBOR in respect of foreign currency denominations, for EUR currency EURIBOR, both linked to the relevant period.

Interest Options – similarly to currency options, VUB offers a full range of interest options. Two basic types of options are used: CAP options enabling the buyer (borrower) of the option to hedge against rising interest rates while profiting from falling interest rates and FLOOR options enabling the buyer (lender) of the option to hedge against falling interest rates while profiting from rising interest rates.

Conditions

Framework Derivatives Agreement signed

Contact

Corporate Sales
02/5055 9650, 02/5055 9630, 02/5055 9620, 02/5055 9610, 02/5055 9595, 02/5055 9520

Structured Products

Structured Products help clients to hedge the Interest rate risk, increase interest yields or reduce interest costs. Structured products combine a variety of relevant financial instruments ranging from FRA to options. These products are tailored to clients´ needs.

Conditions

Framework Derivatives Agreement signed

Contact

Corporate Sales
02/5055 9650, 02/5055 9630, 02/5055 9620, 02/5055 9610, 02/5055 9595, 02/5055 9520




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