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Change Of Withdrawal Policy

Friday, July 20, 2012 - 10:12 AMiGObanking - Details
I recently received this email from It sounds like if you take out a new CD,  and decide to withdraw your funds early,  you forfeit all of the interest earned up to the point of withdrawal. Sounds like a very unusual policy--and makes  you wonder what other surprises may be in store for long-term CD buyers.

Dear Valued CD Customer:

Effective July 10, 2012, our® CD early withdrawal penalties and renewal rates for new accounts and renewals changed as follows:

Early withdrawal penalties (a penalty may be imposed for withdrawals before maturity)

• If your account has an original maturity greater than five years: The fee we may impose will equal the loss of either all interest earned on the amount withdrawn or half the interest amount that would have been earned on the amount withdrawn during the entire term of the certificate, whichever is greater. Penalty may reduce principle.

Automatically renewable time account

Each renewal term will be the same as the original term, beginning on the maturity date. The interest rate will be the prevailing renewal rate on the maturity date which has the same term and minimum balance (if any) as the original time deposit.

You will have seven calendar days after maturity to withdraw the funds without a penalty.

These changes will be applicable to your account at time of renewal.
RichardDeaversRichardDeavers1 posts since
Jul 20, 2012
Rep Points: 6
1. Saturday, July 21, 2012 - 9:33 PM
I think next week I will call the FDIC and/or write to my senator about questions I have on what rights depositors have when they purchase a CD.  We all know that the banks and credit unions can and do put in certain words or clauses that gives them the right to change anything in the CD after purchase.  Somebody needs to take charge of this and find a way to make sure that depositors should be able to depend upon what is written in the terms of the CD and that NO changes should be allowed once they accept our money.   Telling us just to use another institution is just a cope out because they ALL cover themselves by certain words in the CD.  WHO is protecting the saver?

I always ask my institutions if I can depend upon what is stated in my CD at the time of purchase and they, of course, always tell me that I can.  They insist that they abide by what is written. However, if push comes to shove, I am concerned they would do whatever is best for "them" and get away with it just the way Fort Knox credit union did.We sat back and allowed Fort Knox to do this but we must find out if there is any way we can put a stop to it.

If anyone has any suggestions on who or what department would be best for me to contact, please post it.  I am tired of everything being against savers and we must try to put a stop to it before it gets worse.  If we purchase a CD for a certain amount and it states we will get a certain interest rate for a certain period and gives us their early withdrawal penalty, they should NOT be allowed to change any of these particulars once they accept out money.  As far as I am concerned, I am only purchasing their CD  because I believe I am purchasing a "product" which comes with a certain interest rate and other particulars.  I have a right to know they will stand by what they are telling me I am getting.  Thanks for any information you can provide which will help me get to the right people concerning this important issue for all savers.
paoli2paoli21,406 posts since
Aug 10, 2011
Rep Points: 6,152