CDs Over 6% With Some Catches

With the help of a nice reader, I've come across some CDs with very high rates of over 6%. However, all have some catches that diminish their attraction. These may be good deals in some cases.

6.25% 10-year CD

Ridgewood Savings Bank is offering a 6.25% 10-year CD with a minimum deposit of $10K. You also can choose from various gifts in return for a lower 6.00% CD. There are over 35 gifts to chose from. The higher the deposit, the more expensive the gift. The gift options for a $50K deposit are a Phillips 42-inch Plasma HDTV and a JVC 37-inch LCD TV. There are also 5-year and 7-year gift CDs that pay 5% and 5.5% APY. One important note about the gift is that it'll count as interest income on the first year of your term. Ridgewood Savings Bank has branches through out Metropolitan New York.

The catch regarding this 6.25% CD is the 10-year term. That's a long time to lock up your money. You might regret a CD like this if interest rates continue to rise over the next few years. However, based on the latest news from the Federal Reserve Board, rate hikes may come to an end sooner than some might expect.

6.14% 1-year CD

The Martin County Credit Union is offering a 1-year 6.14% APY CD. Martin County is located in Florida and you can join this credit union just by living or working in Martin County.

The catch about this CD is that it requires a new auto or HELOC loan.

6.14% 5-year CD

Founders Federal Credit Union is offering a 5-year 6.14% APY CD. The minimum required deposit is $5K. Founders has branches through out South Carolina and Wisconsin. Membership eligibility is described here.

The catch about this CD is that the rate is variable. The website doesn't provide much more information. A customer service representative stated that the rate changes January 1st and July 1st of each year based on the Wall Street Prime minus 1% with a maximum rate of 12%.