Learn of safe modes of investments offered by foreign banks

Investments are an important aspect of an individual’s financial stature. Smart investments pay dividends’ beyond one’s comprehension. Investing in a right scheme can take you long way in earning due returns on your hard earned money. There are a number of investment options available. The most popular and widely used are certificates of deposit, savings account and money market accounts.

Certificates of deposit are investment vehicles where an investment is locked for duration of time at a predetermined rate of interest. The returns are accessible on maturation. There are a number of variations to the certificate of deposit, each one with different terms and conditions. Prior to investment one has to conduct a through survey of all the investment options available and invest in one that suits his requirements best after a careful review of the terms and conditions.

What is a Yankee CD?

They are a variation of a conventional CD. The basic plot of a Yankee CD is pretty similar to that of a conventional CD with a minor twist. They are CD’s offered by foreign banks which have their branches in the United States. This CD can be usually found predominantly in New York as it the financial trading hub of U.S. They are also known as ‘Negotiable CD’ as the terms are negotiable. The rates of interest may either be fixed of variable. The returns are accessible only on maturation. This investment instrument is often used an alternative investment option by large investors who are looking for low risk investments to round off their portfolios.

Features

They are low risk, stable forms of investments. The rates of interest are considerably low as compared to other CD’s. These investments can be sold on the derivative market. Minimum principle of this CD is $ 100,000. They can be bought in various other denominations. Foreign banks with branches in the U.S offer these CD’s. One of the disadvantages of a Yankee CD is that the returns cannot be acquired prior to maturation of the CD. This CD cannot be liquidated before the completion of its term. In case it has to be terminated prior to maturation the investor would incur hefty penalties. Large investors are the usual beneficiaries of this CD as they can afford to keep large sums of money for longer durations without need for liquidation. The rates of interest are variable. One must be careful in confirming if the rates of interest are fixed of adjusted.