[KevinF]

Hello All..
I'm a new member, still in New York but looking for a "Snowbird's" home in TV. I subscribe to the Daily Sun and I saw the advertisement for First Fidelity's 5.5% 3 month CD "FDIC Insured".
They sound too good to be true. Can anyone enlighten me?
TOTV is the greatest information source I have ever seen.
KevinF

[KayakerNC]

Originally Posted by KevinF

Hello All..
I'm a new member, still in New York but looking for a "Snowbird's" home in TV. I subscribe to the Daily Sun and I saw the advertisement for First Fidelity's 5.5% 3 month CD "FDIC Insured".
They sound too good to be true. Can anyone enlighten me?
TOTV is the greatest information source I have ever seen. KevinF

"Promotional incentives may be added to obtain yield. Fidelity and Guaranty is not a bank. We are an insurance agency offering a CD locator service."
"Yield and deposit amount subject to availability."
"Safe & Guaranteed Returns for IRAs & 401k's."
Sounds like an annuity sales pitch, be very careful.

[784caroline]

If this is like others, the 5.5% is a promotional rate for most likely 3 months. The Comapny sells insurance and annunities...and you may have to sit through a short presentation...maybe not. How they get the 5.5% is you give them say $10,000 and if the going rate is 2.5% at an FDIC bank that would be $250 a year in interest or $62.50 for the 3 month period. For the same $10,000 a 5.5% rate would get you $550 a year or $137.50 for the 3 month period...so to make good on their 5.5%, First Fidelity deposits IN A FDIC insured Bank, your $10000 plus adds an immediate $75 (difference between $137.50 and $62.50)so at the end of the 3 month period you have approx $10,137.50 when you redeem the certificate.
Yes it works, but it can be a hassle considering you are only dealing with a 3 month CD, and an out of state banks especially at renewal time. But you will get Approx $75 (for a $10000 deposit) for your troubles!

[Boomer]

Originally Posted by KayakerNC

...........
Sounds like an annuity sales pitch, be very careful.

Kayaker,

I bet you are right. I watch CD rates really closely and have seen nothing even close to that. That has to be an annuity pitch. I do not clearly understand annuities. Too much between the lines. I just know that you have to be super careful about them. I like liquidity too much. And I do not like to pay commissions. I avoid those annuity pitches. Annuities are not for me.

And even though the first part of your quote said that this particular one is not a bank, I just have to throw in here that many banks are sure not innocent when it comes to pitching annuities. I have a real issue with some of the bigger Cincinnati banks that require tellers to reel in older customers who have large deposits by suggesting a meeting with the bank's investment department. Older depositors in particular need to be aware that the friendly teller at the window might start working that game. Zeroing in on those larger deposits, ripe for the picking. It is often something about which the teller has no choice if the teller wants to be evaluated positively on reviews. Not all banks do this. But many do. And this practice sets me off. Not only have I seen it happen, I have heard about what it is like from a teller's point of view.

Now, I will step down from my high-horse and move forward with my day.

Boomer