Photo by: Stephen AU
First off, Everbank IS A BANK (A United States bank hence the FDIC insured part). They’re not in the game to lose money. They’re playing the volatility of the Krona vs. the U.S. Dollar. It’s not a very stable currency and can go up and down with high fluxes and Everbank knows that. The battle Iceland has with inflation is extremely volatile so the banks are trying to find ways to get stable $ into the economy to use (i.e. the U.S. dollar).
Secondly, there is a conversion fee when you initially invest it with any Forex. When you give them your U.S. dollar, it is converted to Icelandic Krona immediately, and there is a fee for that charged, and they catch you on the backend when you cash it out as well, another fee to convert back to the U.S. dollar. On TOP of that, your minimum investment for this $10,000USD. As MoneyBlog says, “I’ll leave the gambling to Vegas.”
Photo by: lydur
This might have been a mediocre bet at the beginning of the downward spiral of the US dollar, but it is on its way back up and I wouldn’t bet against it now. ISK is risky, and sure you CAN make money off it, but be aware that it IS risky. The Iceland-Krona website itself says the economy is shaky. CDs are not generally risky, but they are in this case because once you buy it, you can’t decide when you want to get off the roller coaster, you have to see it through all 6 months. If you’re confident in the Icelandic economy, fire away. I’m going to sit this one out with Arun…