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. Interest Rate

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

    A deposit held at a financial institution that has a fixed term. ...
  4. Time Deposit

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

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

    Describes an investment vehicle, usually some kind of debt instrument, ...
Related Articles
  1. Broadening Your Portfolio's Borders
    Investing Basics

    Broadening Your Portfolio's Borders

  2. 3 Essential Rules For New Investors
    Investing Basics

    3 Essential Rules For New Investors

  3. The Bond Market: A Look Back
    Mutual Funds & ETFs

    The Bond Market: A Look Back

  4. 6 Factors That Influence Exchange Rates
    Bonds & Fixed Income

    6 Factors That Influence Exchange Rates

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center