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Today’s proper planning holds the key to secure and prosperous tomorrow. Invest your free funds in long term cumulative term deposit, replenish and increase your savings and receive them back in the future in one-off or regular repayments during a term specified by you. Start saving today to ensure your prosperous future in the long term.
Currency
Long term cumulative term deposits are accepted in the following currencies: AMD, USD, EUR
Terms and minimum amount
Deposit Terms
- Minimum: 5 years
- Maximum: 80 years minus the age of the customer for the whole term of the deposit, and 60 years minus the age of the customer for the deposit accumulation period
Deposit Minimum Amounts
- Minimum AMD 100,000 in case you save in AMD
- Minimum USD/EUR 500 in case you save in USD or EUR
Interest rate and maturity
Interest rate and calculation method
The interest rate for the cumulative term deposit is equal to the sum/difference of the Bank's base rate and the Bank's fixed margin. Interest will be accrued on a daily basis and can be paid with the following options:
- Monthly or quarterly payment of accrued interest to the account specified by you
- Monthly or quarterly compounding of accrued interest to the term deposit (compounding of interest is available only during the deposit accumulating phase)
Interest paid for cumulative deposits is subject to income tax in accordance with RA legislation.
Important note
The current nominal interest rate of the cumulative term deposit can be changed by the Bank (which will result in change of the annual percentage yield) based on the change of the Bank’s base rate. In case of change of interest rate you will be notified at least 1 month prior to the change entering into force. In case of interest rate reduction you can terminate the deposit before the date of change entering into force and will receive the deposit amount and accrued interest in full. If the deposit is terminated after the changed interest rate enters into force interest calculation applicable for premature withdrawal of the deposit will be applied.
Maturity of your cumulative term deposit
You can choose the below two options for maturity of your cumulative term deposit:
One-off repayment
- You can instruct the Bank to transfer all accumulated savings in a one-off repayment to an account designated by you
Repayment with periodical instalments
- You can instruct the bank to repay the accumulated savings in periodical (monthly or quarterly) instalments for the duration of a term specified by you. If you choose this option, the same interest rate as applicable for cumulative term deposits at the time of repayments will be applied to the available balance on your deposit allowing you to earn interest also during the redemption period of your deposit.
Termination of the deposit
If the deposit is withdrawn within the first 12 months after the opening date, 1/100 portion of the accrued interest will be paid. In case if the deposit is withdrawn after 12 months but before the deposit maturity date, interest will be paid on pro-rated basis based on the following formula:
| PI = AI | AT |
| IT |
where:
PI - payable interest
AI - accrued interest
AT - actual term
IT - initial term
In case if interest has already been paid, interest amount will be recalculated and any applicable difference will be deducted from the deposit principal.
Example
Lets review an example. Customer (30 year old) decides to open a cumulative term deposit with an initial deposit amount of AMD 100,000 for a term of 30 years and interest rate of 10.75%. If he saves AMD 30,000 monthly and chooses to compound the accrued interest on his term deposit, upon turning 60, his account balance will be equal to AMD 64,569,681 (assuming the above-stated initial conditions remain unchanged for the whole term of the deposit).
| Initial deposit | Monthly savings | Accumulated amount | ||
| After 10 years | After 20 years | After 30 years | ||
| AMD 100,000 | AMD 30,000 | AMD 6,293,987 | AMD 22,523,477 | AMD 64,569,681 |
Learn how much you have already saved
You will receive monthly statements reflecting, among other information, your initial deposit amount, savings paid in to your deposit, total balance and interest paid.
Monthly statements delivered on the territory of Republic of Armenia as well as delivered through electronic means are provided free of charge. For other options for delivery of statements Bank may apply charges in accordance with the Bank’s tariff of charges.
Interest Rates
Cumulative Term Deposits Nominal Interest Rates
| Currency | Minimum Initial Deposit | Bank Base Rate (BR) | 24 – 36 months | 37 – 60 months | 61 – 120 months | 121 – 240 months | 241 – 360 months | more than 360 months |
| AMD | 100,000 | 10.5%* | BR - 1% | BR - 0.5% | BR - 0.25% | BR - 0% | BR + 0.25% | BR + 0.5% |
| 9.50% | 10% | 10.25% | 10.5% | 10.75% | 11% | |||
| USD | 500 | 8.75%** | BR - 4.75% | BR - 3.75% | BR - 2.75% | BR - 2.25% | BR - 2% | BR - 1.75% |
| 4% | 5% | 6% | 6.5% | 6.75% | 7% | |||
| EUR | 500 | 7.00%*** | BR - 6% | BR - 5% | BR - 4% | BR - 3.5% | BR - 3.25% | BR - 3% |
| 1% | 2% | 3% | 3.5% | 3.75% | 4% |
* effective from 01/05/2009
** effective from 10/11/2008
*** effective from 22/05/2009
Cumulative Term Deposits Annual Percentage Yield
| Currency | Interest amount payment / compounding periodicity | Deposit Total Term | |||||
| 24 – 36 months | 37 – 60 months | 61 – 120 months | 121 – 240 months | 241 – 360 months | more than 360 months | ||
| AMD | Monthly | 9.92% | 10.46% | 10.74% | 11.01% | 11.29% | 11.56% |
| Quarterly | 9.84% | 10.37% | 10.65% | 10.91% | 11.18% | 11.45% | |
| USD | Monthly | 4.07% | 5.11% | 6.16% | 6.69% | 6.96% | 7.22% |
| Quarterly | 4.06% | 5.09% | 6.13% | 6.66% | 6.92% | 7.18% | |
| EUR | Monthly | 1.0% | 2.02% | 3.04% | 3.55% | 3.81% | 4.07% |
| Quarterly | 1.0% | 2.01% | 3.03% | 3.54% | 3.80% | 4.06% | |
Interest on the cumulative deposits is calculated based on the nominal interest rate. The Annual Percentage Yield shows how much income you would receive if you reinvest the interest received into deposit.
The annual percentage yield is being calculated based on the formula below:
where:
- A – is the initial deposit amount.
- n – is the consecutive number of the time deposit related monetary flows.
- N – is the last number of the time deposit related monetary flows (including the monetary flow at the moment the time deposit started), after which the time deposit agreement term is being considered as expired.
- Kn – the flows of the time deposit invested at the moment of time deposit opening and/or during the operation of it, as well as the flows of the capitalized interests, and, if available, of the mandatory fees.
- Dn – is the number that indicates how many days are passed from the moment the time deposit has been opened till the time deposit related monetary flows are being done, including the consecutive n-th one. In case the monetary flows are at the moment of time deposit opening, D1 = 0.
Ways to save
After you open the cumulative long term cumulative term deposit, funds may continue to be deposited into the account at any time either by yourself or any third parties.
To replenish cumulative term deposit you can:
- Set regular payments by giving instruction to the bank
- Deposit any amount at any time
- Stop replenishing your account, or take a payment holiday and restart later if circumstances change
You can transfer funds to the cumulative deposit via the following channels:
- ATM network: more than 50 ATMs at over 40 locations in Yerevan where you can effect your transfers
- Telephone Banking: call us at (+37410) 515 000 7 days a week and ask our Call Centre agents (if registered for Telephone Banking service)
- Internet Banking: make your transfers 24/7 via HSBC Personal Internet Banking services from anywhere in the world and any time during the day, at no additional cost
- Branch network: you may visit any of our 7 branches to make your payment transactions in cash or via transfer
Important Information
Cumulative deposit account is opened free of charge and is not subject to any service charges for the whole duration of the deposit term.
Your deposit is guaranteed by the Deposit Guarantee Fund in accordance with the RA Law on Guarantee of Compensation for the Banking Deposits of Physical Persons. The law stipulates the below limits for deposit guarantees:
- If you have a deposit only in AMD within the same bank: AMD4mln
- If you have a deposit only in foreign currency within the same bank: AMD2mln
- If you have deposits both in AMD and in foreign currency within the same bank and if the deposit in AMD is more than AMD2mln: AMD4mln (only the deposit in AMD is guaranteed)
- If you have deposits both in AMD and in foreign currency within the same bank and if the deposit in AMD is less than AMD2mln: AMD2mln (the deposit in AMD is fully guaranteed and deposit in foreign currency is guaranteed in the amount of the difference between AMD2mln and the guaranteed deposit in AMD)
Dispute settlement
The disputes or disagreements arising from the cumulative term deposit agreement are settled in accordance with the RA legislation.
If the property claim related to a dispute does not exceed AMD ten million or its equivalent in other currency, the dispute can be settled through the Financial System Mediator.
The Bank has waived its right to appeal the decisions of the Financial System Mediator, if the property claim requested by you does not exceed AMD 250,000 (two hundred and fifty thousand) or its equivalent in other currency and the amount of the transaction does not exceed AMD 500,000 (five hundred thousand) or its equivalent in other currency.
