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.