Is foreign currency account a good deal?

Today I had a casual chat with one colleague. He mentioned that he intends to open a foreign currency account to earn a higher interest rate. I did a quick check on the interest rate of this type of account. Following is a quick summary(6 months rate):

Pound - 4.925%
Aussie - 7.045%
Kiwi - 8.145%

Sounds tempting right? The interest rate is so high. What if I convert my Sing dollar to Kiwi dollar and deposit for 6 months? Woh la, I got the high interest. But, what is the catch here? You are subjected to foreign exchange rate risk! What if Sing dollar strengthen further after 6 months? The interest you earn might not cover the exchange rate loss you suffer.

So, remember, everything has a price. Forex market is subject to high volatility.