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Out-of-the-way products provide safe investment

Updated: May 3, 2013 12:14PM

Originally published: November 27, 2006

A year ago, I wrote about a “chicken money” investment -- that’s money that you can’t afford to lose, and that belongs in a safe investment such as a CD in a bank or Treasury bills) -- that is as good as gold. Now, I’m writing an update because this is your last chance to participate in the Everbank MarketSafe Gold Bullion CD.

It’s an FDIC-insured, five-year certificate of deposit with an interest return that’s tied to the price of gold. If the price of gold drops over that five-year period, you’ll get your initial investment back, but will earn no interest. The minimum investment is $1,500.

This is a very illiquid product, and you cannot break the CD before the five-year term expires, except in case of death.

This product is not, strictly speaking, a certificate of deposit, although it does carry FDIC insurance.

Instead of interest, investors receive a “market upside payment,” which is determined by the price of gold on 10 specific, semiannual dates during the five-year term of the CD. At the end of the term, the amount of your market upside payment equals the difference between the average price of gold on those 10 dates, compared with the price of gold when you purchased the CD.

At the time I wrote the column a year ago, gold was trading at about $470 an ounce, and the initial “reference point” of the CD was $472.25. Since then, gold bullion has traded over $600 an ounce. In fact, the first two semiannual “observation points” for the Oct 25, 2005 CD were $624.75 in April 2006 and $580.75 in October 2006. That makes the average gold price to date $602.75 -- or 27 percent above the reference price.

That’s not a bad one-year performance!Everbank has decided that the Dec. 12, 2006 edition of the MarketSafe Gold Bullion CD will be the last in the series. That means, if you want to participate, you must go to, click on Banking, and then on MarketSafe certificates of deposit.

You can learn all the details, and also click on a button to apply online. That will lead you to a form that you can fill out, print out, and send along with your check.

Your check must be received by Dec. 12, but the CD will be based on the price of gold on Dec. 14.

While you’re at, you might also want to look at its FDIC-insured Money Market deposit account. Everbank has promised that the yield on this account will always remain in the top five percent of comparable accounts as tracked by Bank Rate Monitor’s national index. Currently the account has a seven-day yield of 4.41 percent.

There is also an introductory special offer of a yield of 6.01 percent for the first three months the account is open for the first $50,000 invested. Subsequently, your yield will always be among the promised top five percent.

Everbank can do this because it is an online bank with no brick-and-mortar facility to maintain, and thus has lower costs. But it will accept your paper checks for deposit, and will -- in the case of the money market account -- allow you to make six withdrawals, including three paper checks per month, on your money market account.

The minimum amount to open an EverBank Yield Pledge Money Market account is $1,500.

If you’re still skeptical about this, EverBank has been voted by Forbes magazine Best of the Web in banking, and Everbank’s checking product has been acclaimed by Kiplinger’s Personal Finance. For more information go to or call (888) 882.3837.

If you’re willing to go a bit out of your way, these two unique products can give you FDIC safety, plus some additional interest, or -- in the case of the Gold Bullion CD -- some additional protection against inflation. And that’s The Savage Truth.

Terry Savage is a registered investment adviser. Distributed by Creators Syndicate.

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