Sunday, November 25, 2007

Diversify Currency with Everbank

If you are in the US and hold most of your cash in dollars it may be worthwhile to convert some of your holdings to another freely traded currency like the Euro, Yen etc. Such a strategy would not only hedge your current dollar positions but reduce the risk of losing real value in case the dollar depreciates further against other currencies. If you prefer your entire portfolio to be in the US itself then you must consider currency options by EverBank.

Everbank is a FDIC insured Jacksonville, Florida based online bank that provides a number of currency diversification options to customers. All deposits are FDIC insured up to a $100,000 for bank insolvency. However the impact of the currency market fluctuations is not insured. Besides the currency options, Everbank offers all the regular banking features like Checking Accounts, Money Market accounts etc.

Currency Options

  • World Currency CD: This option allows the customers to diversify into a single foreign currency of choice like the Euro, British pound, Canadian Dollar and even the Indian rupee. These CDs can be of 3,6,9 and 12 months tenure and renewable. The interest rates offered are different for each foreign currency and the minimum deposits required is $10,000.
  • Multi Currency CDs : Everbank offer a different CD's each comprised of multiple foreign currencies from countries with specific regional strengths and/or geopolitical and economic development. This option gives the customer an option to diversify into multiple currencies by opening a single CD. These CDs are available in 3 and 6 months only and the minimum deposit required is $20000.
  • Metal Select Account: This account allows the customer to purchase gold and silver within 1% over the traded market price EverBank Metals Select Accounts deliver simple and low-cost opportunities to add these valuable commodities to your investment portfolio.

Risk of Investment

Although FDIC insurance will protect you from bank failure up to $100,000, it's important to understand that your deposit will be susceptible to loss or gains due to currency price fluctuations. Various geopolitical and economic influences can affect a currency's value.

As the global economy expands and countries do more trade with each currency fluctuations are bound to increase. Whatever may be your investment goals. Currency diversification strategy must be incorporated in your financial portfolio management!

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