SELECT        f1, f2, SUM(Convert(decimal(20,2), f3)
FROM           t1
GROUP BY   f1, f2
ORDER BY   f1, f2

(all three fields are nvarchar and f3 has values like '123,345.65') 

I am getting an error when converting nvarchar can some one please help me to get around this...
Thanks..

 Is the above the actual query?  If so, you're missing a closing parenthesis (see below)

SELECT        f1, f2, SUM(Convert(decimal(20,2), f3)) -- close off the select with a trailing paren
FROM           t1
GROUP BY   f1, f2
ORDER BY   f1, f2

aprato:

 Is the above the actual query?  If so, you're missing a closing parenthesis (see below)

SELECT        f1, f2, SUM(Convert(decimal(20,2), f3)) -- close off the select with a trailing paren
FROM           t1
GROUP BY   f1, f2
ORDER BY   f1, f2

No the error is not the parenthesis....
it throws error unable to convert string to numeric/decimal!

is there a way to convert nvarchar to decimal ?

 Hmmmmm.... the convert should work. Are you sure that you don't have non numeric values in that nvarchar?  Perhaps
the following would do the trick?

SELECT        f1, f2, SUM(Convert(decimal(20,2), case when isnumeric(f3) <> 1 then '0.00' else f3 end))

FROM           t1
GROUP BY   f1, f2
ORDER BY   f1, f2

 The problem is that the decimal type ignores the thousant separators (,). Only the money data type handle this.

Try to cast first in money and then in decimal 

SELECT        f1, f2, SUM(Convert(decimal(20,2), cast(f3 as money)))
FROM           t1
GROUP BY   f1, f2
ORDER BY   f1, f2