FDIC Renminbi linked CD?

[34f3f3f]

East West Bank are offering a 5yr CD linked to the Chinese currency. I guess this has something to do with China’s recent move to loosen it’s currency’s peg to the US dollar. I wasn’t able to see the yield from their website, but a previous similar CD was 6.8%. It is FDIC covered, but I believe coverage at current levels expires in 2013 anyway. Bankrate.com rate them with a four star, but anticipates a downgrade this year, due to CRE exposure inter alia. Any thoughts, or takers?

[Hatfield]

This sounds similar to foreign-currency CDs offered by Everbank. I was doing those for awhile. You end up getting the published yield plus (or minus!) the movement of the foreign currency against the US Dollar. Just be aware that if the dollar rallies against the other currency, your mature CD can be worth less than what you paid for it. FDIC insurance does not cover losses from currency fluctuations.

[Hatfield]

This sounds similar to foreign-currency CDs offered by Everbank. I was doing those for awhile. You end up getting the published yield plus (or minus!) the movement of the foreign currency against the US Dollar. Just be aware that if the dollar rallies against the other currency, your mature CD can be worth less than what you paid for it. FDIC insurance does not cover losses from currency fluctuations.

[Hatfield]

This sounds similar to foreign-currency CDs offered by Everbank. I was doing those for awhile. You end up getting the published yield plus (or minus!) the movement of the foreign currency against the US Dollar. Just be aware that if the dollar rallies against the other currency, your mature CD can be worth less than what you paid for it. FDIC insurance does not cover losses from currency fluctuations.

[Hatfield]

This sounds similar to foreign-currency CDs offered by Everbank. I was doing those for awhile. You end up getting the published yield plus (or minus!) the movement of the foreign currency against the US Dollar. Just be aware that if the dollar rallies against the other currency, your mature CD can be worth less than what you paid for it. FDIC insurance does not cover losses from currency fluctuations.

[Hatfield]

This sounds similar to foreign-currency CDs offered by Everbank. I was doing those for awhile. You end up getting the published yield plus (or minus!) the movement of the foreign currency against the US Dollar. Just be aware that if the dollar rallies against the other currency, your mature CD can be worth less than what you paid for it. FDIC insurance does not cover losses from currency fluctuations.

[34f3f3f]

Are you actually exchanging into Yuan (easier to spell)? They guarantee principle on maturity, so I’d assumed if you invested $100k, that’s what you’d get back regardless of currency fluctuations.

[34f3f3f]

Are you actually exchanging into Yuan (easier to spell)? They guarantee principle on maturity, so I’d assumed if you invested $100k, that’s what you’d get back regardless of currency fluctuations.

[34f3f3f]

Are you actually exchanging into Yuan (easier to spell)? They guarantee principle on maturity, so I’d assumed if you invested $100k, that’s what you’d get back regardless of currency fluctuations.

[34f3f3f]

Are you actually exchanging into Yuan (easier to spell)? They guarantee principle on maturity, so I’d assumed if you invested $100k, that’s what you’d get back regardless of currency fluctuations.

[34f3f3f]

Are you actually exchanging into Yuan (easier to spell)? They guarantee principle on maturity, so I’d assumed if you invested $100k, that’s what you’d get back regardless of currency fluctuations.

[Hatfield]

This would not be a correct assumption.

Look at it this way: you invest $100k, they convert it to the foreign currency at the current exchange rate. Time marches on, the interest accrues as promised. When the CD matures, they then convert it back at the new exchange rate, and that’s what you wind up with. If the dollar rallies against the other currency, your return will be higher than the CD yield. If the other currency rallies against the dollar, your return will be lower than the CD yield. You potentially could lose principal.

FDIC only protects you if the bank fails. It will not protect you against currently fluctuation. You didn’t post a link, but this will be explained in the fine print. Here’s the fine print at Everbank:

http://www.everbank.com/001Currency.aspx

[Hatfield]

This would not be a correct assumption.

Look at it this way: you invest $100k, they convert it to the foreign currency at the current exchange rate. Time marches on, the interest accrues as promised. When the CD matures, they then convert it back at the new exchange rate, and that’s what you wind up with. If the dollar rallies against the other currency, your return will be higher than the CD yield. If the other currency rallies against the dollar, your return will be lower than the CD yield. You potentially could lose principal.

FDIC only protects you if the bank fails. It will not protect you against currently fluctuation. You didn’t post a link, but this will be explained in the fine print. Here’s the fine print at Everbank:

http://www.everbank.com/001Currency.aspx

[Hatfield]

This would not be a correct assumption.

Look at it this way: you invest $100k, they convert it to the foreign currency at the current exchange rate. Time marches on, the interest accrues as promised. When the CD matures, they then convert it back at the new exchange rate, and that’s what you wind up with. If the dollar rallies against the other currency, your return will be higher than the CD yield. If the other currency rallies against the dollar, your return will be lower than the CD yield. You potentially could lose principal.

FDIC only protects you if the bank fails. It will not protect you against currently fluctuation. You didn’t post a link, but this will be explained in the fine print. Here’s the fine print at Everbank:

http://www.everbank.com/001Currency.aspx

[Hatfield]

This would not be a correct assumption.

Look at it this way: you invest $100k, they convert it to the foreign currency at the current exchange rate. Time marches on, the interest accrues as promised. When the CD matures, they then convert it back at the new exchange rate, and that’s what you wind up with. If the dollar rallies against the other currency, your return will be higher than the CD yield. If the other currency rallies against the dollar, your return will be lower than the CD yield. You potentially could lose principal.

FDIC only protects you if the bank fails. It will not protect you against currently fluctuation. You didn’t post a link, but this will be explained in the fine print. Here’s the fine print at Everbank:

http://www.everbank.com/001Currency.aspx

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