Ask Terry Questions Ads for high rate CD Offerings

Ads for high rate CD Offerings

By Terry Savage on February 11, 2016 | Chicken Money


We often see advertisements in the Chicago Tribune from Sun Cities Financial Group offering higher yield short term CD rates. Currently they are offering The Presidential CD : 6 Months at 4.5%. Do you have any experience with Sun Cities and these offerings? Would you recommend them? Sounds great in the current environment.
Thank you for your time.

Terry Says:  Several people have written to ask about high-yielding CDs and I have tried to track these down.  From what I can gather, there is a minimum investment — and the “interest rate” includes a “bonus” that would make the rate as high as advertised — IF it could be gotten on an annual basis.  But these are short-term CDs paying far less for the first 6 months!  It’s a marketing trick.  Please don’t fall for it.  It’s today’s version of the old “free toaster.”   Once they get your money, you’ll have a tough time getting it back as it may have hidden fine print that you have to keep your money there for a longer period of time earning virtually nothing at the end of the 6 month deal.

There is absolutely no such thing as a 4.5 annual percent rate on a 6 month FDIC insured CD without some kind of huge trap.  I just wrote a column about low interest rates and how frustrating they are to seniors.  That opens the door for all kinds of dirty tricks and this is one of them!

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