The safer way to make money in FOREX

I have a friend who is a brilliant FOREX trader - on paper. When she goes to make a real trade, she freezes up and the trade flops. But there is a way she can use all her hard-earned FOREX experience while still playing it relatively safe: investing in foreign currency CDs. Everbank is one institution offering this special kind of CD, and they just introduced a unique 3-year BRIC CD (BRIC stands for Brazil, Russia, India, and China currencies) with an issue date of 10/20/09. Are these countries poised for a big takeoff in the next few years and beyond? If you are one of the people who thinks so, consider this way of putting your toe in the FOREX water without risking going underwater (and losing a lot of real money).

Here's how the BRIC CD works: First, you open an account with US dollars (the minimum at Everbank is currently $1,500 USD). Your money is held in US dollars, but your gains will be measured by how well the dollar performs against the BRIC currencies (equally divided against the Brazil real, Russia ruble, Indian rupee and Chinese renminbi). If the value of BRIC currencies together gains against the dollar by the end of the three years, you'll receive a payment. If the value does not increase or decreases, you get 100% of your principal deposit back. In this scenario, there is no other payment.

You do not risk losing principal with the BRIC CD -- it is considered "market safe" and your account is FDIC-insured -- and it has a good potential upside performance if the underlying currencies go up during the term of the CD. However, this CD is not without significant risk on the downside, and although you will not risk principal, you need to weigh how much you would make in interest in a traditional CD vs. your risk of making no payment at all with a BRIC CD.

Everbank offers other foreign currency CDs and they all work differently, for example, their single currency CD, or WorldCurrency CD, requires a much higher minimum deposit ($10,000 USD) and involves substantial risk in that your principal is not 100% protected; in addition, you are invested in only one currency, not diversified across several.

Incidentally, another site called Zecco, which boasts a new FOREX trading platform, is currently offering a $75 cash bonus for every friend you refer. All your friend has to do is deposit $500 into a new Zecco account (not necessarily a FOREX account) within 60 days. That's a sure 75 bucks without any risk in FOREX at all... stay tuned for bigger and better FOREX promo deals from Zecco as they roll them out.

Foreign currency CDs are one way to manage your risk in the FOREX markets, and to diversify your overall investment portfolio.