Posted By: CFP&WM On: Aug 7th, 2009 In: Beware - Horror stories My soap box

High Rate CD Offer with Strings Attached

I recently had a newspaper clipping mailed to me by a client.  It was an advertisement for a high yielding CD, safe, FDIC insured, etc. After reviewing the “fine print,” we found that it was an introductory offer of 5% for 3 months and no mention of the rates after that.  There was a $10,000 maximum limit as well.  We also found that you could only get a CD after a financial meeting with one of this annuity company’s sales associates!

After calculating the costs to the company, we found that it was cheaper for them to pay this interest short-term than to pay for a dinner presentation, workshop, and marketing services.  It was just another way of paying to get clients in front of their sales associates.  The concept is similar to the free vacation/time share selling.

Be aware of any offer that has strings attached like this one.  Sometimes that dangling carrot is there for a reason and it is not for your benefit.  It could land you in a less than favorable situation that is difficult to get out of.

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