A very special reverse convertible bond is being advertised at comdirect Bank until 26 March 2018. As part of the current campaign, there is an option to conclude a Commerzbank Protect reverse convertible bond with Deutsche Bank. The reverse convertible is advertised with a fixed interest rate of 7.5% p.a. and can be found in comdirect Bank’s directory under the code CV7TS0.
What advantages does the Protect Deutsche Bank reverse convertible bond offer through Commerzbank?
The reverse convertible bond offers a secure yield of 7.5% p.a.. This yield is independent of the performance of the underlying. This means that the reverse convertible can be subscribed for at a fixed price of 100%, starting from a sum of EUR 1,000 per bond. With an interest rate of 7.5% p.a. the offer is clearly more attractive than it is the case with many other bonds of this kind.
A buffer of 20% can be built in for security, which guarantees the repayment of the invested sum at the end of the term. The risk reduction barrier will only be observed on 21 June 2019. If the barrier is touched or breached on this day, the investor receives shares instead of his paid-in capital.
The term of the entire investment is quite short. This means that the bond can only be issued over a period of 15 months. It can be traded particularly flexibly and offers the option to sell on a daily basis.
Which risks are associated with the Protect Deutsche Bank reverse convertible bond issued by Commerzbank as a whole?
It is recommended to pay attention not only to the advantages but also to the potential risks of this investment. In principle, the maximum yield of the investment is limited to the coupon. This means that it will not be higher than defined in advance. There is no capital protection for the investor. As already mentioned, if the investor touches or falls below the barrier on the valuation day (21 June 2019), he will receive a 1:1 participation in the performance of the underlying asset. It is conceivable that the value of the delivery of the underlying asset may, of course, be significantly lower than the nominal value of the share.
It is also possible that, for example, changes in the share price and the volatility of interest rates can lead to a negative development in the value of the reverse convertible. The investors also bear the issuer risk of Commerzbank AG.
What advantages do the current account and the deposit of comdirect Bank?
The customers of comdirect Bank may be pleased that they can manage a deposit and a current account free of charge, provided they manage both accounts in parallel with the bank. That means that first the free Girokonto and also the free depot can be opened. One of the large advantages consists of the fact that both products can be led parallel in on-line Banking and naturally also in the fact that they are very easy to act in each case. Likewise it must be mentioned that the depot with the comdirect bank can be steered exactly like the Girokonto via mobile App.
Beside the free account guidance, which is free without condition, the customers profit also from the fact that they can act accordingly a very large selection at products. Over the depot the entire trade is available which concerns shares. Also CFDs as well as ETFs are offered over the depot in each case. It is worthwhile itself thus naturally to take the appropriate offers of the bank under the magnifying glass.
Was the fund trade concerns, recruits the comdirect bank with the fact that it holds a particularly large offer ready at funds for its customers. The list at funds amounts to altogether approximately 10,000 different. It is to be noted that the funds can be acquired without problems over the depot and with most a discount is given at a value of 50% on the issue surcharge. With some funds this discount amounts to even on 100%.
Comdirect savings plan can be implemented starting from 25 euro sum
Ebenso offers the bank a quantity at ETFs. Several hundred ETFs are offered, many of which can also be executed as a savings plan. About 200 ETFs are offered as a savings plan. Customers can also use around 385 different funds as a savings plan. The savings plan can be executed at comdirect Bank every one, two or three months. It should be mentioned that the savings plan can be executed from a sum of EUR 25.