Bankers Revenge !
Attention all CD depositors - please read my story and avoid my huge mistake !! Well, like many of you, my CD expired and was up for renewal. I really couldn't find a better place to put my money so I thought I would leave the CD with Bank Atlantic. Because I did nothing, the CD rolled over to a new CD automatically for another 12 month certificate. Well, my old CD rate was 4.17%, and today (7/17/09) I went to the bank knowing my rate would be low - but they advised my new rate was .80% ! I was floored, .80% - that's less than 1% I said - how could that be? The CSR advised, that was the new rate for rollover CD's. Strangely, their website is showing a 2% CD rate for 12 months - how did I get a .80% rate?? The CSR advised that unless you negotiate a rate - you automatically get the lower rate. I then advised that I would cancel my CD rollover - the CSR said sure no problem, you owe us a $275 penalty !! The CD had just rolled over to a new one and I was 1 day out of the grace period !! So not only did they rip me off on the CD rate - they also charged me $275 to get out of the bad deal. Other depositors need to be aware that if you let your CD automatically rollover - you could end up with a very poor rate. On Friday, 7/17/09, I moved my money to Progress Bank - they had a promo rate of 2.80% for 12 months. Banks are getting really stingy in this economy !!
I've read reports from readers of other banks doing this same thing. Wachovia is one. With interest rates at historic lows, it's especially important these days that we don't let banks take advantage of us.
Last year I wrote a post Things Your Bank Won't Tell You that lists several issues related to CDs and savings accounts that banks don't clearly disclose. If you're unaware of these, it can be costly.
For those who would like to get in on that 2.80% 12-month CD, I'm afraid it's over. According to the reader it was a grand opening special at Progressive Bank's new Tampa branch that ended on Friday. However, Progressive Bank continues to offer a very competitive reward checking account with a 5.05% APY (as of 7/18/09) on balances up to $25K if the typical reward checking requirements are met each month (see post).
Thanks to the reader who shared his experience on this rollover CD. If you have similar experiences that you think could help others, please leave a comment or email me.