EverBank Offering Metals-Based CD - 10% interest+FDIC insurance

[fm1234]

Just saw this:

EverBank Timeless Metals

Was very interested as I read it; then occurred to me that EverBank has an affiliate program through Commission Soup.

Thought it might be worth mentioning for people in the gold/silver/investment vertical. The idea of an account linked to precious & industrial metals which offers FDIC insurance against loss for 100% of principal is pretty appealing, and ameliorates the consumer fear that the top will be hit and they'll take a loss. Just by example, if a customer got into this right before the big drop a couple of weeks ago, his account would still be worth what he put in it ... and as (or if) prices rebound, the value of his account goes up (it's capped at 50% over a five-year period.)

Seems like a pretty strong sell for people who want to get into metals but are averse to the short-term swings metals can experience.


Frank

 

[conv3rsion]

i dont understand how this works, you can get up to 50% gain if metals go up but you dont risk any principle. how is that possible? It seems like they are betting that the metals will increase by more than 50% and their profit will be the difference of the actual increase and the cap.

This is crazy, this would be a great CD for parking some cash.

 

[geomark]

So worst case is a return of 0%, best case a return of 50%, over a period of 5 years. Not that exciting. With that mix of metals I would forecast closer to the worst case than the best case. And in 5 years I want my money to double so I'll put it into a profitable business or other asset classes.

 

[r3p1v]

 

[jelf]

where did you get the 10% interest part. I dont see that on their website?

 

[AdHustler]

where did you get the 10% interest part. I dont see that on their website?

i dont see it either

 

[fm1234]

@jelf @AdHustler:

The interest rate is capped to 50% per metal, so it would work out to a 50% total return. With a five-year commitment, that works out to 10% -- to be more clear, I should have said "up to 10%" or something along those lines, sorry.

posted by geomark:

So worst case is a return of 0%, best case a return of 50%, over a period of 5 years. Not that exciting.

I would suggest you take a look at other investments that are guaranteed against loss, and their respective returns compared to a 10% upside. 10% a year is not a particularly sexy return; adjustable rates up to 10% with zero downside is actually not all that bad.

And, more interesting to me personally (I prefer the metals themselves, and playing around on the futures market, such as my beautiful silver short cash run recently) is the affiliate connection. Metals are huge in the press, and while the market is at near-record tops and demonstrating volatile swings, a hedged CD insured against loss is probably very attractive to investors. I'd rather market the metals CD and put the money earned into the real stuff than own the CD.


Frank

 

[geomark]

Problem is that you are locked in for 5 years and then the CD matures. You have no control over the timing to sell. That would be very unattractive with metals.

If you think metals are going to rise further, or rise and fall over the next 5 years with a lot of volatility, than buy them another way.

 

[demineus]

this is not right, if you want to buy metals you should buy actual metals, silver bullion, or even some jewelry or silverware or plates come out to the same price as if were in weight, even antiques. The point is the more hard silver we buy the less can be on JP Morgans fake balance sheets, and they will have to increase limit and margins, so buy sliver crash JP morgan, watch Max Keiser on youtube/rt tues and thurs here a clip from tomorrows show
dont miss it
[ame=http://www.youtube.com/watch?v=ugMAPY_foSE]YouTube - ‪May 23,2011 Let's not repeat history‬‏[/ame]