Thank you for interest in
this free report. This report is for informational purposes only.
FREE Report…
The Truth about those High
CD Rate Advertisements!*
If it’s too good to be
true..
Have you noticed that week
after week there are ads in the newspaper touting CD rates that are 1 to 2
percent higher than your local banks?
Have you ever wondered why the
rates are so much higher?
In this report you will
quickly learn the secrets of these higher CD rate ads and just how they will
affect you.
Since you're reading this
report you most likely have a CD coming due and are wondering what to do with
the money!
That's exactly what the
companies placing these ads are hoping.
The ads we are talking about
are those with headings like these:
"Best CD rate in town",
"Higher CD Yields", or simply "3 Month CD 6.%"
All these ads tout higher
than normal interest rates and FDIC Insurance.
All of these ads are from
companies with names containing one or more of these key words: First,
National, Fidelity, Guaranty, or Security. Names containing these words
make you think these companies are banks. However, they most likely are not
banks.
All the ads have what look
like, at first glance, the standard small print disclaimer. At closer
examination you will see one or more of the following statements:
Ø
Yield may
reflect bonus
Ø
Deposits
exceeding $50,000 may qualify for higher yield
Ø
CD locator
service
Ø
We offer a
service that locates the highest yield nationwide
Ø
Promotional
incentive included to obtain yield
Ø
Various
Tax-Deferred Accounts
All of these ads are written
to peak the interest of the CD buyer who is tired of low rates.
These companies want the
senior CD buyer to call them or even better, visit them at their office.
Why?
It's pretty simple. If you
respond to the high rate CD ads you will be offered a high rate CD with, most
likely, some restrictions. The restrictions will be how much you can actually
invest in the CD or the term of the CD, or even that the rate is no longer
available. However to learn all of the facts you'll need to make an
appointment and go to the companies offices. That’s step one, get you in the
office!
At the appointment you'll find
out that these companies can not sell you a CD directly. However, if you really
want a CD they will help you find one. They will even help you fill out the
paper work to sign up for a CD. The banks that these CD’s are from are usually
banks that are somewhere other than Sarasota and may not even be in Florida.
They call this a CD locator service. Their firm will tell you where in the
country the best CD rates are. This is step two.
That doesn’t sound like a bad
idea, does it? A CD locator service, they do this for free. In fact, some of
these companies will even take it one step further and they will even pay YOU to
invest in these CD's, an “incentive”. That's how they create these higher than
normal CD rates! Confused? Read on.....
Remember in the list above one
of the "key" words in the ad was "Promotional incentive included to obtain
yield", well that's how they get that higher than normal interest rate. By
adding a "bonus" or “incentive” amount of money to the money you want to invest
in a CD, they can boost the interest rate dramatically. For example, let's say
that you want to invest $20,000 for 6 months. Let's assume the current best
yield for a 6 month CD, some where in the country, is 5.45%. By just using
simple interest, the income over 6 months would be $545. If the teaser rate they
quote you is 5.90% then the income on $20,000 would be $590, a difference of
$45. This is the amount of the “incentive” they will provide. Not a bad deal for
you, huh? With their incentive added to your $20,000, the amount of a CD you
would now purchase would be $20,045, and your earnings would be $590 giving you
5.90% yield
So why would they do this?
Step three! They do it simply
to get you in the door. You see, they are betting $45 that they can convince
you to sign up for one of their “other” investment programs. Yes, they will
really offer you that CD but they'll want to tell you about their latest and
greatest wonder investment product. Some of these “other” investment products
pay them a 10% commission or even more! Of course your money will be locked up
for as many as 15 years. So let the buyers beware!
With commissions that high,
they can afford to pay the few who don't buy the sales pitch the $45
incentive!
Now the question is, if they
are willing to give you money to come to their office shouldn’t you take
advantage of this generosity? Yes, if it's worth $45 more in income and you're
strong willed enough not to be persuaded to invest your money elsewhere. Most
people are not that strong willed and these firms are betting the $45 on it.
Now don't get me wrong. There
are many good alternatives to those low CD rates. Your bank even invests the
CD money you give them in many of these alternative investments. In fact
most banks can offer you these same investments instead of CD's, but why would
they when you are willing to buy their low rate CD's? You should also
note that your local banks are usually not the best place to find the highest CD
rates.
The idea of someone telling
you where to find the best CD rates is not a bad idea, but do you want to be
tricked into finding all this out? The bottom line: If a firm is not willing to
be up front with you about what they REALLY are trying to sell you, can you
really trust them to advise you with YOUR best interest in mind? NO!
I've been in the financial
business for the last 27 years. From all my years on Wall Street to those on
main street, one thing I have learned: if it's too good to be true it probably
isn't true.
So what should YOU do?
If you want to find out about either higher CD rates or those other alternative
investments, then ask your financial advisor. He's qualified to tell you
about CD and other investment alternatives.
Looking for a new financial
advisor or you don't have one, then go to
SeniorsOnlyFinancialAdvisor and find a qualified advisor in your area today!
*Please note: This article is
not an offer to sell Certificates of Deposit nor is it an offer to sell
securities. This article is for informational and educational purposes only.
============================================================
Information, charts or examples contained in this report is
for illustration and educational purposes only. It should
not be considered as advice or an endorsement to purchase or
sell any security or financial instrument. We do not and
cannot give investment advice.
============================================================