Re Soverign Bank CD
Wednesday, May 12, 2010 - 4:04 PM
Re Soverign Bank CD, yes, following more links I see the longer term CD is linked to the S&P 500. But no where does it say its return is not capped, nor does it tell how your interest rate will be determined if the S&P goes up -- it does NOT say that the interest rate will MATCH the rise in the S&P. The information on the Web site seems incomplete.
Of course, the consideration is that no one really knows where the stock markets will be going. While they might go up, they are probably more likely to be going down as the Fed raises interest rates -- which will yield you zero return on this CD -- or at least only rise a small amount if any. So, that is a risk you would be taking, even though your original principal (and they say your PRINCIPLE, not any interest posted over the course of the CD) would be protected.
Of course, the consideration is that no one really knows where the stock markets will be going. While they might go up, they are probably more likely to be going down as the Fed raises interest rates -- which will yield you zero return on this CD -- or at least only rise a small amount if any. So, that is a risk you would be taking, even though your original principal (and they say your PRINCIPLE, not any interest posted over the course of the CD) would be protected.
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