Open Menu Take advantage of an enhanced yield for your USD or CAD deposits Dual Currency Deposits A Dual Currency Deposit (DCD) can be appealing if you're looking for a deposit with an enhanced yield in one currency, and are comfortable with the possibility that the deposit may be returned at the end of the deposit period in another currency. What is a Dual Currency Deposit? Advantages Who should consider DCD? Limitations & Risks Example Scenarios 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 Earn a significantly higher yield than a conventional term deposit The potential to receive an exchange rate that is significantly better than the prevailing spot or forward rates You can specify your desired conversion rate or your desired yield Who should consider DCD? Limitations & Risks Variations Who should consider DCD? Businesses that have a large balance sitting in a USD or CAD account. Businesses looking for a higher interest rate on a deposit (currently 3% on average). Businesses that have a need for another currency and is comfortable with the deposit being converted to another currency. Businesses that are able to book a deposit for a minimum of $250,000.00. Email us 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 2020-2021 Canadian FX Service Quality Leader Coalition Greenwich Ready to discuss the right DCD term for your business? Email us Contact us Connect with TD Securities Logo of Linkedin Logo of Youtube Privacy & Security Legal Accessibility Ad Choices & Personalization Site Index "TD Securities” is a trademark of The Toronto-Dominion Bank and represents TD Securities Inc., TD Securities (USA) LLC., TD Securities Limited, TD Bank Europe Limited, TD Global Finance unlimited company, TD Prime Services LLC, Toronto Dominion (South East Asia) Limited and certain other subsidiaries and branches of TD engaged in investment banking, capital markets and wholesale banking activities. TD Securities (USA) LLC is a member of SIPC and FINRA (see FINRA BrokerCheck). Visit our legal page for more information.