Foreign Currency Term Deposit
Foreign currency term deposits represents a term deposit investment product with a foreign currency denomination. This is especially useful to clients, who have used a forward foreign extract rate contract, as part of a strategy for foreign exchange hedging and then noted a disparity having occurred with the timing or the volume of currency, as agreed in the forward contract. A foreign currency term deposit may be entered into if there is a recognized need for the foreign currency at a future date.
A foreign currency term deposit provides the security of a locked in rate, providing guaranteed returns on foreign currency and generally offers a range of foreign currencies. Similar to a term deposit, the tenure may be chosen by the investor, but he cannot withdraw the money prior to maturity. If he chooses to prematurely withdraw the funds, then adequate notice may be given or a penalty may apply. Generally, a minimum deposit in the corresponding currency is required.It also available in countries such as Australia for example.