FAQ | FXD Capital

Our FAQ’s

Is FXD Capital approved to hold client monies?

FXD Capital do not hold client monies and most importantly you will maintain all the control through dealing directly via the bank.

Why would I want to use a broker when I can deal directly with the bank?

By not being beholden to any one single bank, that cannot offer you anything other than their own products, our independence and impartialness ensures you will always have access to a broad and diverse range of counterparties. We have economies of scale through the funding assurances we make to our partner banks and it’s our relationships with them that means you will benefit directly from exclusive and preferential products and rates that would not otherwise be available by going direct. It is also the banks that remunerate FXD Capital therefore there is no cost to you, the depositor, for our service.

You claim to be able to help reduce risk, how?

A major consideration for any depositor should be counterparty diversification. It is an ever-changing, crowded market and the process to identify suitable banks is both onerous and time-consuming. With variables such as financials, liquidity ratios and credit ratings, maintaining assessment of these is a near impossible task. We place enormous importance on this and it’s our ongoing counterparty risk assessment that will help you ensure that your deposits are always secure, freeing up your time to be spent on other areas of your business.

How are you able to increase our yield on cash deposits?

FXD Capital covers many banks so that you don’t have to. As their appetite for liquidity changes, and interest rates move, the rates offered to you as the depositor may change too. What comes with this are opportunities and we are uniquely positioned to inform you of the ways in which you could generate additional interest income.

Are you able to offer advice on how best to manage our deposits?

We have all the experience and resources to inform and assist with your reporting processes and decision-making. Whether you are a business that has always placed on instant access even though you know the funds aren’t going to be used for the foreseeable, or, a larger more sophisticated corporate with a treasury policy and treasury team, who may choose to adopt a portfolio approach to managing deposits. In any scenario, by getting an understanding of your business, requirements and counterparty criteria, we will work together on everything from the treasury policy, to deal structuring, onboarding and the negotiation of rates. Everything we do is to help you ensure sufficient accessibility of your funds whilst maximising yield and diversifying counterparty risk.

We only deal with banks that have an investment grade credit rating from one of the established ratings agencies.

Our diverse range of partner banks are carefully selected for their size, financials and credit rating. We deal with some of the most highly rated banks in the UK as well as some carefully selected challenger banks. For those that aren’t credit rated, they are growing quickly and so do offer a service capability and value-add which some depositors may want to consider.

We are probably too small to warrant using a broker.

Your deposit is essentially a loan to the bank so why wouldn’t you want to earn more interest? We know that interest income is relevant to our clients however large or small, so every client is as important as the next one. Naturally we do find that the larger the depositor, the more significant the opportunity is in real money terms so we also recognise that our value add will vary, as well as the level of proactivity you therefore might come to expect or ask of us. Regardless, from counterparty risk assessment to generating additional interest income, if you have deposits then we know our services will be relevant to you in one way or another.

How do you decide on what banks you show your clients?

We know that choosing counterparties will vary for every depositor. We also know that our counterparties also have preferences on the type of depositor. By taking the time to truly understand your business and your requirements FXD Capital are then well placed to show you counterparties and products that will be of interest and meet your criteria.

Are you able to provide analysis on future interest rates?

The team at FXD Capital are not economists or traders so we leave the experts in that field to make the calls on the market. We do however have our own views from experience and speaking to the banks and market participants daily which we are able to discuss. As market expectations, political events and economic uncertainty will always play a significant part on your decision making, we aim to ensure we provide you with only the most useful and relevant information in order to help you make better informed decisions. Whether that be a conversation or more formal market commentary for a board report, assisting you with managing your deposits is what we do!

How do I become a client of FXD Capital?

Becoming a client is straightforward. We also suggest that we do it only once we have identified whether there’s an opportunity where we can add real-value. After all, this is the basis of any long-lasting relationship. We have a non-contractual term sheet that lays our commitment to you, including the responsibilities and confidentiality that you would want and expect.

It’s only once you are comfortable to proceed with any one bank that we will then, make the necessary introduction and name give and help you onboard directly to the bank. Until such a time, as we are independent of the banks our direct relationship means you operate with anonymity and have access to all the banks that you may ever want to consider.

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