Foreign Currency Fixed Deposit - FCFD

AAA

DEFINITION of 'Foreign Currency Fixed Deposit - FCFD'

A fixed investment instrument in which a specific sum of money with an agreed upon time and interest rate is deposited into a bank. Although fixed deposits have virtually no risk, foreign currency fixed deposits introduce an element of risk because investors must exchange their currency into the target currency and then covert it back again once the term is over.

INVESTOPEDIA EXPLAINS 'Foreign Currency Fixed Deposit - FCFD'

When foreign currency fixed deposits are larger and longer in duration, they receive much higher interest rates. An FCFD can be a very useful and safe way to invest your money. However, you must make sure that you do not need that money for the entire duration of the term.

RELATED TERMS
  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Time Deposit

    A savings account or certificate of deposit (CD) held for a fixed-term, ...
  3. Risk

    The chance that an investment's actual return will be different ...
  4. Fixed Term

    Describes an investment vehicle, usually some kind of debt instrument, ...
  5. Interest Rate

    The amount charged, expressed as a percentage of principal, by ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term. ...
Related Articles
  1. Here we look at the major fund categories that exist for investors seeking international opportunities, as well as the advantages and disadvantages of these funds.
    Investing Basics

    Broadening Your Portfolio's Borders

    Find out what type of international fund might suit your needs in gaining exposure to foreign markets.
  2. Investing Basics

    3 Essential Rules For New Investors

    Find out how beginner investors can invest sensibly, suitably and simply.
  3. Mutual Funds & ETFs

    The Bond Market: A Look Back

    Find out how fixed-income investments evolved in the past century and what it means today.
  4. Bonds & Fixed Income

    6 Factors That Influence Exchange Rates

    Find out how a currency's relative value reflects a country's economic health and impacts your investment returns.
  5. Bonds & Fixed Income

    Asset Allocation In A Bond Portfolio

    An investor's fixed-income portfolio can easily beat the average bond fund. Learn how and why!
  6. Options & Futures

    I have a short period of time (1 year or less) during which I will have money to invest. What are my ...

    If you only have a short period of time in which to invest your money (i.e. less than one year), there are several investment options you should consider outside of the typical checking and savings ...
  7. Options & Futures

    Writing Covered Calls On ETFs

    The strategy of writing covered calls on ETFs can limit your losses and hedge risk, but they cap your upside potential.
  8. Economics

    Indian Banking Regulations -- What You Didn't Know

    Through these regulations, the Reserve Bank of India steers India's banking sector away from risk and toward its goals for India's economy and society.
  9. Bonds & Fixed Income

    What determines the price of a bond in the open market?

    Learn more about some of the factors that influence the valuation of bonds on the open market, and why bond prices and yields move in opposite directions.
  10. Taxes

    Why should I keep records on my tax-exempt bond transactions?

    Keep your purchase records on all investments, including tax-exempt bonds. Though the interest is tax-free, you may owe taxes if you sell your bond for a gain.

You May Also Like

Hot Definitions
  1. Santa Claus Rally

    A surge in the price of stocks that often occurs in the week between Christmas and New Year's Day. There are numerous explanations ...
  2. Commodity

    1. A basic good used in commerce that is interchangeable with other commodities of the same type. Commodities are most often ...
  3. Deferred Revenue

    Advance payments or unearned revenue, recorded on the recipient's balance sheet as a liability, until the services have been ...
  4. Multinational Corporation - MNC

    A corporation that has its facilities and other assets in at least one country other than its home country. Such companies ...
  5. SWOT Analysis

    A tool that identifies the strengths, weaknesses, opportunities and threats of an organization. Specifically, SWOT is a basic, ...
  6. Simple Interest

    A quick method of calculating the interest charge on a loan. Simple interest is determined by multiplying the interest rate ...
Trading Center