Dedicated to Deposits: Deals, Data, and Discussion
Featured Savings Rates
Featured Accounts

How Financial Companies Can Advertise Very High CD Rates In Newspapers

Sunday, May 22, 2011 - 4:50 PM
Every Sunday when I’m looking for bank specials in newspaper ads, I come across ads that list very high short-term CD rates. However, the ads are not from banks or credit unions.
 
An example today is an ad that was published in the May 18th Tampa Tribune. The financial company Fidelity Deposit Corp is advertising 3.15% to 7.00% APY. The ad has very few details.

Another example is an ad that was published in the May 22nd Denver Post. The financial company First Financial Group is advertising a 4.00% APY 6-month CD. This ad does have some important small print. Two important details include “promotional incentives included to obtain yield” and “rates may vary depending on deposit amount”.

To learn why and how financial companies offer these CDs, please see my review of this FDIC article: Beware of an advertised CD rate far above the competition.

Allan Roth in his CBS MoneyWatch blog has also written about these financial companies which advertise these CD rates.

In his latest blog post he reports on his new investigation into American First Insurance and the inaction of the Colorado financial regulators:
I can only wonder how many Colorado consumers responded to the CD advertisement and ended up walking out with an annuity. Since it was done with the full knowledge of the Colorado Division of Insurance, I think the Insurance Commissioner and all employees involved are doing anything but protecting the consumer.
6
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
1. Sunday, May 22, 2011 - 7:12 PM
I've known elderly people that fall for these scams. It's truly a shame that something isn't done about this. I see ads like this in major newspapers all the time. With CD rates so low, desperation sets in for many people on fixed incomes, and they go for the bait.
6
ShorebreakShorebreak2,613 posts since
Apr 6, 2010
Rep Points: 14,168
2. Sunday, May 22, 2011 - 7:44 PM
Considering how much they advertise, I'm afraid they must make quite a profit with their annuities.
4
Ken TuminKen Tumin5,469 posts since
Nov 29, 2009
Rep Points: 125,077
Reply