NEW YORK (CNN/Money) - Given the downtrend of the U.S. dollar, what are some of the ways individual investors can profit from it? Is there any bank that will open an account in foreign currency, say the Euro, so that I can earn a higher interest rate and gain from Euro appreciation?

-- Michael Chan, New York, NY

With the Euro clobbering the dollar this year, it's no surprise that many investors have been wondering how they might turn the dollar's woes into some profits. Well, the good news is that you don't have to be George Soros, the famous (or infamous, depending on your point of view) hedge fund manager who profited handsomely by betting against the British pound in 1992, to try to capitalize on the weak U.S. dollar.

These days, even mere mortals like you and me can try to profit from swings in the currency markets. I stress, however, that the operative phrase here is "try to." Fact is, virtually any strategy that attempts to profit by making a bet that a currency will move in a certain direction also has the potential for losing money if the currency moves the other way.

The most accessible way for small investors to play the currency game is to put your money in a bank savings account or CD that's denominated in a foreign currency. Although this option has been available for some time, the minimum account sizes tended to range in the low six figures.

But at least one financial institution, Everbank, an online bank based in St. Louis, makes available FDIC-insured CDs in more than 25 different currencies -- ranging from the Australian dollar to Norwegian krone to the Japanese Yen, and, of course, the Euro. Minimum investment: $10,000 (or the equivalent in the foreign currency, if you happen to have that on hand).

Everbank also offers savings accounts in these currencies with an even lower minimum -- $2,500 -- but the savings accounts pay no interest until your account balance reaches about $10,000. So if you have a smaller amount invested, you would make money only if the currency you choose appreciates against the U.S. dollar.

Considering the dollar's recent swoon -- it's down about 12 percent vs the Euro this year -- and the fact that many countries have higher interest rates than the U.S., buying a foreign-denominated CD may seem like a no-brainer way to get a higher rate of interest than on U.S. CDs and to get an extra pop in the form of currency appreciation.

According to Everbank's Web site, its one-year Euro CDs were recently paying 2 percent. That compares with a recent average of 1.67 percent for regular U.S. dollar CDs, so you're already a bit better off just on the rate. If the U.S. dollar continues to weaken against the Euro, you could make even more. How? Let's take a look.

When you buy a Euro-denominated CD, you are essentially converting U.S. dollars to Euros and then depositing Euros in the CD. So with the Euro recently trading at $1.18, investing 10,000 U.S. dollars would leave you with about 8,474 Euros ($10,000 divided by $1.18 per Euro) in your Euro CD.

Assuming you earn 2 percent interest, you would receive another 170 Euros at the end of the year, making your account worth 8,644 Euros. If the price of a Euro stays at $1.18, then converting your 8,644 Euros back to dollars would give you $10,200, for a return of 2 percent.

But let's say, just for argument's sake, that the Euro rises in value to $1.20. That would mean that if you cash out your Euro CD at the end of the year, you would receive $1.20 for each of your Euros, giving you a grand total of $10,373 (8,644 Euros x $1.20 per Euro), giving you an annual return not of 3.73 percent, nearly doubling the 2 percent return on the CD. Not bad.

Of course, the thing to remember is that if the currency moves against you -- that is, if the Euro falls in value -- you'll make less than 2 percent. Indeed, you can even lose money.

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For example, if the Euro were to drop to, say, $1.15 over the year, then converting your 8,644 Euros back into dollars would give you $9,941. So instead of a 2 percent return, you'd be sitting on a 0.6 percent loss.

Actually, the loss would be somewhat larger and the gain somewhat smaller than what I've outlined here, since I haven't accounted for the spread, or markup, that you would pay when converting your dollars to Euros both when buying and cashing out the CD. That would probably siphon another one to one-and-a-half percentage points off your return.

So, the question is, how confident are you about predicting the direction of the Euro -- or any other currency, for that matter? Given the widening U.S. trade deficit and growing budget deficit, I think you can make a good case for continued weakness in the dollar.

On the other hand, it's hardly a given that the dollar will continue to slide. If the U.S. economy starts to grow more quickly, the dollar could rise in value. Or the economic situation abroad could worsen for any number of reasons making the dollar more attractive.

In general, I think that currency fluctuations are a lot like interest rates -- easy to monitor in hindsight but much harder to say what will happen looking ahead.

Everbank CEO Frank Trotter told me that he sees the bank's foreign-denominated CDs not so much as a way to make short-term bets on currency movements, but as a longer-term way to diversify one's portfolio so its value isn't totally dependent on the U.S. dollar.

I agree that such a strategy makes more sense than trying to jump in and out of different currencies based on how you think they might fare in the short-term. But, frankly, I think most investors have a lot of other ways to diversify -- large-cap stocks, small-caps, growth, value, different types of bonds, real estate securities, etc. -- before they need to start worrying about currency diversification. I just don't see it as that big a priority for the majority of investors.

But if you feel differently about the value of currency diversification -- or if you just want to play George Soros with a bit of your money -- an easily accessible tool for investing in a broad range of currencies is there. Just make sure you know what you're doing if you decide to use it.

Walter Updegrave is a senior editor at MONEY Magazine and is the author of "Investing for the Financially Challenged."