Empty Spaces Inc. said…
have you looked into everbank.com’s icelandic CD? it pay ~10%
EverBank offers a 13.10% APY 3-Month Icelandic krona CD. The yield looks very attractive so I did some research on this CD. The CD is FDIC-insured. And the reason why the yield is so high is because Iceland is combating inflation and the banks are offering high-yield CDs to combat inflation. So what’s the big catch on this CD? I found out that you can lose on principal in the CD, because the krona currency fluctuates. Also, there’s a exchange rate fee. The conversion fee is three quarters of a percent (0.0075%) for CDs less than $100,000.
The way it works is that your US Dollars get converted to Icelandic kronas and then at maturity if you decide to withdraw, the kronas will be converted back to US Dollars. The exchange rate then could be different from the start of the CD.
Does any one has experience with Icelandic CDs? Do you think it is low risk? Are they are other catches I am missing?