The interest rates in the U.S. are so low right now that it is difficult to make any money off certificates of deposit (CD). That said, they do offer a safe place for money; investors may not earn much, but they will not lose any money either. Another option for certificates of deposit that may provide the opportunity to earn higher interest rates is the foreign currency CD.
EverBank offers a WorldCurrency CD that earns interest rates based on the local rates of a specific country or a basket CD that offers exposure to a variety of currencies. These foreign currency CDs are subject to fluctuations in exchange rates, but generally offer higher interest rates than dollar-denominated CDs. Investors can lose money if the dollar strengthens against the foreign currency as the CD matures.
Only U.S.-based FDIC-insured banks should be used; in fact, many websites that offer foreign currency CDs at fantastic rates are scams. The FDIC insurance protects against bank insolvency, but not against the currency price fluctuations so money can be lost in this type of CD.
The above article is written in part by author Jean Folger who writes at http://financialedge.investopedia.com .
Anthony DiChi,
Your friend in Forex Currency Trading, FX Information and Forex News at TradeCurrencyNow