What are Eurodollars?
Eurodollars is simply holding U.S. currency in a foreign bank. It is not just for European banks. It is called Eurodollars for any foreign bank holding U.S. currency.
Why should you hold Eurodollars?
Holding Eurodollars can allow individuals or institutions to take advantage of higher interest rates. Right now (2020) interest rates on savings accounts in the U.S. are incredibly low. You are lucky if you can find a bank paying 1 percent, which is still much lower than the inflation rates. By depositing dollars into a foreign bank you can get a much higher interest rate on your money. However, people who are interest in this need to be aware of additional fees for transferring money internationally and taxes. There are great opportunities to earn high interest rates utilizing Eurodollars but significant research is required.