Saturday, May 11, 2013

How to Earn 12% on a 3 Month Bank Certificate of Deposit in US Dollars

I don't know about you, but the last time I checked the interest rates being offered on certificates of deposit at my bank, the rates were terrible. However, they did promote a 1.5% CD, but the money would have to be tied up for ten years.

So what would you say to a bank that is offering a CD that pays 12% and you would only have your money tied up for three months? The first thing you might ask is what currency will the CD be denominated in; would it be the Yen? No, this CD is available in United States dollars. So where can you get such a deal?

Well, according to the article called 'In Dollars They Trust' in The Economist magazine, the April 27, 2013 issue on page 71, the banks in Zimbabwe are issuing such high yield certificates of deposit. Ever since since Zimbabwe was hit with runaway inflation during the previous decade, with inflation running over 200,000,000% five years ago, the country has turned to the US Dollar as an alternative currency. This type of CD is available from the country's largest back, CBZ Bank in Harare, Zimbabwe.

However, personally I would avoid such an investment as the FDIC won't be backing up the account. I would hate to lose 100% in an attempt to make 12%.

No comments: