Everbank's Foreign Currency CD

Foreign Currency CD? Never heard the name? The Jacksonville, Florida based Everbank introduced such a unique investment vehicle in late 2005. Certificate Deposits or CDs are usually referred to as a safe haven in the ever-changing world of investment and are quite popular with retired people who do not wish to take a chance with their hard-earned money at a late stage of their life.

All you need to do in CD investment is just putting your money in for a fixed term, earning a set rate of interest and knowing exactly how much you'll get back at the end of the term. Everbank CDs do not fall in this stereotype. These CDs could pay you back much more or much less. That's because the Everbank CDs are bets on the value of the dollar. At the time of purchase, you select an investment amount ranging from $2,500 to $20,000 and also pick the currency or a mixed bag of currencies that you want to invest in. Everbank then purchases government bonds issued by the country or countries of your choice. These bonds pay a set rate of interest, but the real return or loss comes from the exchange rate.

At the time of maturity, if the currencies you bought are comparatively stronger than the dollar, you can make much more profit than just the interest. As we may be aware, in recent months, some world currency CDs have paid hefty annual returns because of falling dollar value. On the other hand, if, during the investment period, the value of the dollar rises, you could end up with less than what your initial investment was.

We feel, if you are interested in forex or foreign investment, it's better to do that directly through foreign currency trading or by buying foreign stocks, ETFs or mutual funds. Everbank CDs sound too risky to us. It's just good to know that such a kind of investment exists. Who knows, if at a certain point in time, you are able to make a good guess of the direction of dollar value in future, you may consider having such CD in your portfolio.