12. Foreign Currency CD
Arguably the most complicated type of CD, the foreign currency CD should be avoided by all those who are risk-averse. Novices should also consider other forms of investing and saving.
You would buy these with U.S. dollars, but they are issues in British pounds, euros and other foreign currencies. Because of this, there is no guaranteed APY.
The risk is in the fact that global economic conditions could fluctuate greatly. Sure, you may be getting super high returns, but you might lose them entirely if, say, the dollar strengthens.
One major drawback is that foreign currency CDs are rarely FDIC-insured. That’s because the principal you invest has to be guaranteed by the issuing bank. If it is subject to a loss, in the event of the bank failing, the product will not be insured by FDIC.
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