Euro Deposit

Posted in Finance, Accounting and Economics Terms, Total Reads: 1246

Definition: Euro Deposit

Euro deposits are instruments which provide market return on cash deposits made in euro currency. Also referred as "money market euro deposit rates", they are offered to investors from U.S. The minimum rate of investment is 10,000 Euros.

Euro deposits provide a twofold benefit:

1. floating interest rate (like a money market account)

2. chance for capital appreciation ( if the euro appreciates against the investor's home currency often considered to be dollars).

Importance of Euro Deposit

Euro deposit has its significance of avoiding currency risk in fluctuating global markets. Having investments in Euro Deposit helps to mitigate certain risks as the overall portfolio is diverse. This helps on avoiding the cases where depreciation in dollar against foreign currencies can lead to an overall loss for the investor.

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