Foreign Currency Fixed Deposit - FCFD


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.

BREAKING DOWN '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.

  1. Term Deposit

    A deposit held at a financial institution that has a fixed term, ...
  2. Exchange Rate

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

    A savings account or certificate of deposit (CD) held for a fixed-term, ...
  6. Interest Rate

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