I am an American citizen living in the U.S.  How can I invest in the Euro currency?

Can I go to a bank such as Citibank and open a Euro deposit account? 
Are there other easy ways I can buy Euros?
I would prefer bigger well-known institutions (vs. smaller ForEx
brokerage sites for example).

Hello.

Someone asked this exact question to Newsday last month:

 I'd like to convert part of my assets from dollars to euros, and
place them in a European bank. What's the safest way?
...
... There is a simple way to invest in euros, says Greg McBride, a
senior financial analyst with Bankrate.com, a data company that covers
financial institutions nationwide: With a $10,000 minimum purchase,
you can buy an FDIC-insured foreign currency certificate of deposit
through Everbank, a Jacksonville, Fla.- based bank."
source: Newsday, October 10, 2004
http://www.newsday.com/business/printedition/ny-bzbrenner103999444oct10,0,254266.column?coll=ny-business-print

More information from EverBank about their foreign currency accounts:
http://currency-investing.everbank.com/direct.asp?Idpage=pro_wc_aa_t1
http://currency-investing.everbank.com/world-currency/single-currency-cds/pro_wc_cd_t2

Also see CNN.com:
http://money.cnn.com/2003/06/02/pf/expert/ask_expert/
BusinessWeek.com:
http://www.businessweek.com/2000/00_44/b3705144.htm

"The Coming Collapse of the Dollar?"
http://www.j-bradford-delong.net/movable_type/2004-2_archives/000514.html

"How to Play the Weak Dollar," Smart Money, November 2004
http://www.smartmoney.com/sectorpatrol/index.cfm?story=20041111

"Playing the Weak Dollar," Forbes, March 1, 2004
http://www.forbes.com/markets/free_forbes/2004/0301/106.html

"Guard Against the Falling Dollar," Kiplinger's, Feb. 2004
http://www.kiplinger.com/columns/value/archive/2004/va0203.htm


As mentioned in some of those articles, another option would be a
mutual fund that invests primarily in Euro-denominated bonds, stocks,
or money-market instruments.  For example, several of the articles
cite the  American Century International Bond fund (ticker symbol:
BEGBX) which invests primarily in Euro-denominated bonds. See:
http://www.americancentury.com/funds/fund_facts.jsp?fund=992

-------
search strategy:
"invest in euros"

I hope this helps.

---

Request for Answer Clarification by towersi470-ga on 25 Nov 2004 17:55 PST

Hello,

Thank you for the detailed answer.  I did have one question:  Other
than Everbank, do you know of a way to invest in Euros?  (i.e. the
same mechanism but a more well-known bank?)  I have heard of Everbank
as well, but was hoping for a better-known institution (as mentioned
in the tail end of my question).

Thank you again.

---

Clarification of Answer by juggler-ga on 25 Nov 2004 21:12 PST

Don't shoot the messenger, but, no, the biggest American banks do NOT
offer Euro deposit accounts to their retail customers.  If you're one
of their "private" clients with big bucks (e.g., millions on deposit),
perhaps the story might be different.

From the New York Times:

"SINCE the beginning of the year, demand for the accounts has been
strong. Everbank reported a 124 percent increase in deposits held in
foreign currencies in the first six months of 2003. Despite such
growth, major banks have not rushed to add similar accounts. Citibank,
Chase, HSBC, Washington Mutual and Bank of America say they do not
offer them at their retail banks, although they may be available to
clients of their private banks or overseas divisions."
http://www.nytimes.com/2003/07/27/business/yourmoney/27FORE.html


You may not have heard of EverBank, but it is really the only American
bank mentioned in the press (i.e., New York Times, BusinessWeek, WSJ,
etc.) as offering Euro deposit accounts.  See, for example, the Wall
Street Journal from two weeks ago:

"Where to Invest As the Dollar Hovers Near Its Record Low"
"...A safer alternative is owning foreign currency outright -- and
that isn't as difficult as it might seem. EverBank.com offers savings
accounts and certificates of deposit in a variety of major and
secondary currencies. Savings accounts require a minimum deposit of
$2,500; CDs, a $10,000 minimum. The accounts are FDIC-protected,
meaning the deposit is guaranteed, though any losses from currency
fluctuations aren't. The benefit is that you earn interest at whatever
prevailing rates are in a particular country and have the potential
for capital gains if the dollar continues to fall."
source:  Wall Street Journal, November 9, 2004
http://www.forex.com/04-11-09.html

As the WSJ notes in that same article, another option would be to buy
American Express Travelers Checks in Euros.  You won't earn any
interest, but that's another option if you don't feel comfortable with
Everbank.
See AmericanExpress.com for more information:
http://www10.americanexpress.com/sif/cda/page/0,1641,11532,00.asp


Again, I'm very sorry that I can't tell you, "Sure, Citibank or Bank
of America will open up an account for you in Euros."  What I've tried
to do here is present you with accurate information about realistic
options. Thank you for understanding.

Thank you.  The original answer as well as the reply to my request for
clarification was to the point and clear.  Thanks again.