DollarBull CD Hypothetical Scenarios

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Henry felt that the U.S. dollar would rally in the coming year due to the stabilization of the U.S. economy. He also thought that results of an upcoming election in Britain would weaken the pound based on the uncertainty of its outcome. Wanting to take advantage of this potential currency change, he opened a one-year DollarBull® CD with an initial deposit of $20,000.

Let's see how Henry fared one year later with three hypothetical scenarios.

Example Assumptions:
U.S. dollar deposit amount $20,000
Currency conversion rate 1.74 USD/GBP (or 0.5730 GBP/USD)
Holding Period 365 days
Net Interest Cost Glossary 5.00% APY Glossary (paid in British pounds)
Holding CD principal £11,494.25
Paid interest £574.71
Ending Balance £12,068.96
Hypothetical Scenario 1 Hypothetical Scenario 2 Hypothetical Scenario 3
Reaction to the election outcome didn't match Henry's expectations. Additionally, the U.S. trade deficit continued to increase resulting in the pound appreciating against the dollar. Henry may have been better off in this outcome by opening a WorldCurrencySM CD. Even though the election outcome created some opportunity for a dollar rally, this was countered by considerable weakness in the U.S. economy due in a large part to an ever-widening trade and account deficit. As a result, there was no currency change, but John experienced a loss nonetheless due to the Net Interest Cost. For this outcome, Henry might have benefited by opening a WorldCurrency CD. Henry correctly gauged the reaction to the election outcome—the U.S. economy did stabilize and was able to ward off inflationary concerns. The U.S. dollar strengthened against the pound providing Henry with a modest gain.
Currency Conversion Rate: 1.80
Total Return: $18,275.87
Total % Return (8.62%)
Net Loss: $1,724.13		 Currency Conversion Rate: 1.74
Total Return: $19,000.00
Total % Return (5.00%)
Net Loss: $1,000.00		 Currency Conversion Rate: 1.60
Total Return: $20,689.66
Total % Return 3.45%
Net Gain: $689.66

Since the DollarBull CD mimics a loan in a foreign currency, EverBank® assesses a charge for the interest on the "borrowed" money. EverBank will determine the amount of the Net Interest Cost at its sole discretion and will inform the depositor prior to opening the CD.
Images, quotes and scenarios are used for illustrative purposes only and are not meant to represent any actual EverBank customer.