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| Tuesday, November 08, 2005 |
| Has anyone invested with EverBank? |
I have been thinking about opening an account with EverBank and investing in a Currency CD. I first heard about this product 6 or 8 months ago and recently decided to revisit the website to see what their current offering are:
You will need to click on the above table to read it, but basically the Mexican peso has the best interest rate for a 3 month CD. The catch is these require a $10,000 minimum to open. While the bank is FDIC insured, my deposit is not insured against currency deflation. So you are taking a risk to get that return.
CNN Money has an article entitled Dollar party may be over soon. Would a weakened dollar make a currency cd a better or worse investment?
Has anyone opened one of these? What are your thoughts? |
| posted by Boston Gal @ 3:45 PM *
* Subscribe to Boston Gal's Open Wallet |
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| 7 Comments: |
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If you change $10,000 into 100,000 pesos, and then the dollar drops, it means your 100,000 pesos would be worth more than $10,000 when you change them back.
I've never used a currency CD, and you should probably check out the fees and risks and all that jazz before you decide to do it. Figure out how much the dollar would have to drop for you to get a decent return, and figure out what would happen if the dollar rose, too.
Also keep in mind that when the press talks about the dollar dropping, they usually mean relative to the Euro or the Yen (two pretty stable currencies). You want some way to guess what the dollar will do relative to the peso, which is less stable.
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I have read about such investments but I have no personal experience with them. The return seems pretty good but I have no idea as to what the actual risk is. I think you would do us all a great service by investing in this and reporting to your loyal readers your results. BTW I really enjoy your blog.
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Do you have any unique insights about the direction of the US dollar vs. the Mexican peso to give you confidence in predicting the next 3 months? If the answer is no, you're gambling on something you know much too little about. Not smart ... IMHO.
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the mexican peso has appreciated against the dollar over the past year. they're entering an election year and that can be tricky. it's not until july so you might be safe for threee months...
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so did you ever get around to opening the foreign currency CD at everbank? the icelandic 3 mo cd is offering 8%.
although i'm offering between 24%-120% return on some of my deals ;-)
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I backed off on that one - did not invest in an EverBank foreign currency CD. But, since I continue to try to lure Nordic visitors to my site perhaps I should consider the Icelandic cd...
Thanks for the heads up :)
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andrew tobias says there are hidden fees, thai expats like it. With falling dollar it is well worth it.
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If you change $10,000 into 100,000 pesos, and then the dollar drops, it means your 100,000 pesos would be worth more than $10,000 when you change them back.
I've never used a currency CD, and you should probably check out the fees and risks and all that jazz before you decide to do it. Figure out how much the dollar would have to drop for you to get a decent return, and figure out what would happen if the dollar rose, too.
Also keep in mind that when the press talks about the dollar dropping, they usually mean relative to the Euro or the Yen (two pretty stable currencies). You want some way to guess what the dollar will do relative to the peso, which is less stable.