cds

5 high-yielding, but risky CDs

Offshore CDs can be risky
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CDs sold offshore offer temptingly high interest rates. For example, offshore banks in Panama pay a whopping interest rate of up to 8.5 percent on CDs.

But they come with a big downside: They're not insured by the Federal Deposit Insurance Corp. "They aren't risk-free," says Greg McBride, CFA, senior financial analyst at Bankrate.com. "High rates compensate you for risks."

Because your certificate of deposit isn't insured, your only security lies in the creditworthiness of the organization backing the CD. If the bank defaults, you may not get your money back. Look for better deals here at home.


 

 

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