What Happens To Bank CD Rates In A Bank Takeover

I read an interesting article today in USA Today September 29, 2008. It was titled Whats next for failed WaMu's customers? Several interesting points were made in the Q and A style article. First point as you know qualifying accounts under the $ 100K FDIC limit are federally insured. What you may not know is the point made later in the article by Charlie Scharf JPMorgan Chase Bank's head of retail business was quoted as saying Cd rates for WaMu products will remain the same "as we figure out how to merge the companies". The article goes on to state "But it is unlikely that Chase will honor the rate on WaMu's 5%CD rate through maturity" said Bankrate.com senior analyst Greg McBride. The key point here is that although the principal is guaranteed the INTEREST RATE PAID IS NOT GUARANTEED!!! OUCH!! not only do banks not pay the best rates available but if they screw up you may not even get the promised rate.

If you are thinking about buying a Bank CD or facing a rollover date now might be a very good time to consider non bank alternatives. If you are looking at 1-5 year terms guaranteed rates of close to or over 5% are available and if you are over 40 years old we can offer products with a superior guaranteed yield of 6-7.2% in a five year, a ten year or longer timeframe with the additional benefit of a 5% initial bonus credited to the principal on day one if you choose the 10 year product. These interest rates are the contractually guaranteed minimum rates and the rates can be as much as two or three times as high in good years. A percentage of the funds are available annually without penalty. At any time you can convert the account balance into a lifetime income stream you cannot outlive. In effect you can convert this into a personal pension plan at your option any time you wish. No bank CD offers you these three things Competitive minimum interest rates, significant upside potential earning and a lifetime income stream. Does this make sense for some percentage of your assets?

This product should be in your portfolio for some portion of your assets if you are qualified to purchase these products. You have to meet suitability and minimum initial contribution limits. It is not necessarily available in all 50 states. Contact us if interested.

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