Take advantage of an enhanced yield for your USD or CAD deposits

What is a Dual Currency Deposit?

A Dual Currency Deposit (DCD) is a hybrid product that combines an investment strategy and a foreign exchange component.

How It Works

A cash deposit is made in one currency (CAD or USD) for a specified term.
The yield and a foreign exchange rate against the other currency (USD or CAD) is agreed upon. The conversion rate will typically be more favourable than the prevailing spot rate.
At maturity, the deposit and the earned interest is returned in either the original currency or converted to the other currency at the agreed upon rate. The currency returned is determined based on whether the DCD Conversion Rate is below or above the market rate at maturity.

See example scenarios.

Advantages

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Earn a significantly higher yield than a conventional term deposit

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The potential to receive an exchange rate that is significantly better than the prevailing spot or forward rates

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You can specify your desired conversion rate or your desired yield

Example Scenarios

Example A: USD Seller
Deposit Currency & Amount
US $250,000
Other Currency
CAD
Deposit Term
2 weeks
Market Deposit Yield
0.10%
Market Forward Rate
1.2500
DCD Conversion Rate
1.2590
DCD Enhanced Yield
3.0%
Interest Amount (US$)
$292
Exchange rates displayed are for illustrative purposes only.
What happens at the expiry date
Scenario 1: If the spot rate is below 1.2590

The deposit and interest earned will be returned to you

in USD

(US $250,000 + US $292 = US $250,292)

Scenario 2: If the spot rate is at or above 1.2590

The notional and interest earned will be converted at 1.2590 and

returned in CAD

(US $250,292 x 1.2590 = CA $315,117)

Either way, you receive the US$292 interest.

Example B: USD Buyer
Deposit Currency & Amount
CA $500,000
Other Currency
USD
Deposit Term
2 months
Market Deposit Yield
0.10%
Market Forward Rate
1.2500
DCD Conversion Rate
1.2410
DCD Enhanced Yield
3.0%
Interest Amount (CA$)
$1,233
Exchange rates displayed are for illustrative purposes only.
What happens at the expiry date
Scenario 1: If the spot rate is above 1.2410

The deposit and interest earned will be returned to you

in CAD

(CA $500,000 + CA $1,233 = CA $501,233)

Scenario 2: If the spot rate is at or below 1.2410

The notional and interest earned will be converted at 1.2410 and

returned in USD

(CA $501,233 / 1.2410 = US $403,894)

Either way, you receive the CA$1,233 interest.

Recognition & Accolades

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2020-2021
Canadian FX Service Quality Leader

More info:

Canadian FX Service Quality Leader

Coalition Greenwich

Ready to discuss the right DCD term for your business?

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