by barbarag | November 1, 2017 2:54 pm
Unlike a lot of CDs, the MarketSafe® Emerging Currencies CD doesn’t pay periodic interest or even an annual percentage yield. Instead, it’s an indexed, U.S. dollar-denominated CD, and its performance is tied to the gains and losses of five currencies over the course of the CD’s 3-year term.
The five currencies are the Brazilian real, the Chinese renminbi, the Indian rupee, the Indonesian rupiah and the Turkish lira. At the CD’s maturity, its performance will be multiplied by a factor of seven.
Let me say that again: if the average performance of the CD’s components shows a gain at maturity, that figure will be multiplied by seven. So an average index gain of 6% when the CD matures in three years means you’ll receive a market upside payment of 42% of your principal!
More importantly, since your gains depend on the average performance of all five currencies, you just need a few of them to rise higher than the others fall. Even if the average gain is 1%, you’ll still receive seven times that number.
And if all of the components fall or remain flat, you’re still covered. That’s because all of EverBank’s MarketSafe® CDs guarantee at least the 100% return of your initial principal. So the only leverage you’ll see is on the upside.
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