FDD has various meanings in the Banking category. Discover the full forms, definitions, and usage contexts of FDD in Banking.
Foreign Currency Demand Drafts (FDD) are a pivotal instrument in international banking, facilitating cross-border transactions with efficiency and reliability. These drafts are issued by banks, allowing customers to make payments in foreign currencies without the need for a foreign bank account. The process ensures that funds are available on demand, making it a preferred method for businesses and individuals engaging in global trade.
In the context of banking, FDDs serve as a secure alternative to carrying large amounts of foreign currency. They are particularly useful for paying overseas suppliers, tuition fees, or settling international invoices. The drafts are drawn on the issuing bank's foreign correspondent, ensuring that the payee receives the exact amount specified, free from the fluctuations of exchange rates at the time of transaction.
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