This CD has potential to earn real money |

This CD has potential to earn real money

Mark Cuniberti
Special to The Union

It's seldom I find any investment coming out of Wall Street or the banking industry that I view as appropriate for both conservative and aggressive investors alike.

Bank savings accounts are safe yet pay close to nothing. Bonds are everywhere, which makes them susceptible to price declines due to the sheer quantity being offered in today's debt-soaked world. Stocks and mutual funds can pay a little more and increase in value, as well, but the last market implosion taught investors that these markets are not for the young. As for annuities, well, let's just say you would do better saving all those fees and putting your money back in a government treasury, although they too don't pay much.

Occasionally, however, I find products that are brilliantly constructed, and when I do, I want to make sure investors are aware of them.

The latest one I have found is called the FDIC Safe Market CD. It offers FDIC protection so you can't lose any money. The upside is, unlike a regular CD, this CD has the potential to earn many more times your investment should the underlying asset it represents rise in value.

This CD has a five year tie-up, which means, for all intents and purposes, you can't get to your funds for five years. You will not earn any interest on your money for the duration of the CD, but five-year CD's at a regular bank pay little anyway, so I don't see this as too much of a negative.

This CD, through a unique structuring, invests in four currencies the innovating company deems undervalued at this point in time. They are the emerging markets currencies that would not normally strike me as places where the average investor would consider, but the analysts believe they are undervalued in relation to the U.S. dollar, and price increases are in their future.

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The price of these four currencies will be recorded every six months during the five-year term.

At the end of the five years, if the average price of the currencies has increased more than 0 percent, you are guaranteed a 15-percent return on your money. If the currencies increase more than 15 percent, you get 100 percent of the increase. That means it is possible to make much more than the 15 percent and possibly a lot more.

If the underlying currencies fall in value, you get your entire principal back.

This currency CD is an anti-dollar play, whereas if the U.S. dollar falls in value against these four currencies (also known as inflation), you could win and win big.

In today's economic environment, where I find it almost impossible to place investors in areas where they cannot lose money yet possibly earn a decent or even a windfall return, this CD certainly is a unique way to hedge against the U.S. dollar losing value, simply because the Federal Reserve prints too many of them.

You will have to search for this CD as it is not offered everywhere and it closes Sept. 11, so you will have to hurry. The last CD of this type that came out also had a narrow window to apply for it, and it was years before another one was offered, so those interested should move fast. As always, read the prospectus of anything you plan to buy, but with the FDIC guaranteeing your money, it's pretty hard to argue with.

This article expresses the opinions of Marc Cuniberti. He hosts "Money Matters" on KVMR FM 89.5 and 105.1 FM on Thursdays at noon. His website is His email is

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