Foreign Currency Fixed Deposit (FCFD)

Categories: Banking, Forex,

A fixed investment instrument that requires a certain amount of foreign currency to be placed into a bank account for a specified time period at an agreed upon interest rate. The difference between this type of deposit and a regular fixed deposit is the value of foreign currency and the availability of interest rates. The currencies have to be exchanged to make the deposit and then again when funds are eventually withdrawn. Risk is introduced because each currency's relative value changes over time.