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Buying Cds From Out Of Town And Maturity Problems

paoli2
  |     |   2,641 posts since 2011

After all my years of purchasing CDs from all over the US, I have run into a problem which some may not be aware of.  It seems certain credit unions, and banks, especially, will not allow one to close the CD at maturity date unless you sign and return the Original to them personally.  Signing and mailing it back is not allowed so one must return to the institution or one of it's branches which can be quite a few miles from where you live if you want your money back.  Otherwise, the CD will rollover for another 5 years (in my case) at these appalling low rates! 

So we will have several return trips to make this year and into other years to get our money back upon maturity.  I am just grateful, I did not go out of our state for these CDs or this really could be a problem.  I have done business with some of the bigger named institutions that Ken puts on his list and no matter how far away they were from my city, they always just accepted a signed letter at maturity to return the funds and their check always arrived wherever we needed it to go.  I guess this is the new way of holding on to saver's money at these dismal rates for these other banks and credit unions.  I will always now ask "before" purchase if the "Original" signed CD has to be returned personally to the institution at maturity if one wants to close it out.  Never had to before.

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Answers
Anon456
  |     |   249 posts since 2011
WOW - pls post the name of any institution that still sends you a paper CD certificate.  IF they mail it to you, they should accept it mailed back.  STILL .... I would avoid doing business with anyone who still does this.

YES - I have seen a small bank or CU over the years that wanted the CD signed and returned.  I have usually gotten that waived if you go up the food chain to get it waived.  Last time I saw this was maybe 10 years ago.  My recommendation is to make sure this forum gets notice of any place that does this.  Should be a VERY small number.

ALSO - I think me1004 has a good suggestion.  Some of these places are working on OLD business policies and without thought.  BUT they may very well have a difference position if you want the funds to go into your savings or checking at the same place.  Just do that, and write a check.

FYI - I did have a place that wanted $10 to close an account.  They would not budge.  So I moved the money to a no cost checking account, and wrote a check to make it go to zero.  NO PROBLEMO  (pulled a George Costanza)
(FYI .... no way to charge me, but I did notify them later via fax to close the checking acct so there would no "dormant fee" to ghost the acct - make note it and keep a copy in your records)
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paoli2
  |     |   2,641 posts since 2011
All of these banks are ones I found for my particular state from Ken's list.  They all were small but had good ratings.  They are about 50 miles from us so it is no big deal if we have to drive back.  We have no friends to invite for a picnic or whatever so we will just go alone.  One of the banks said they rarely have anyone but hometown people buy CDs so returning them is only a problem for out of town customers.  I have a feeling if we really could not return, they would have to allow us to sign and mail them back.  I may do them for the ones which mature in the winter if we have heavy snow to deal with.  I just will not have the CDs rollover at the dismal rates the same banks are giving now. 

Note:  For anyone rate shopping for CDs at this time, be aware, that many of the banks I have been used to having 6 months EWP for 5 year CDs are now charging 12months of interest for EWP!  That's a no no for me! (Especially if they are giving higher interest than others -- double check that EWP!)
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me1004
  |     |   1,379 posts since 2010
Once or twice over the years I have had the requirement to produce the original certificate in order to claim the CD at maturity. But I have never heard of having to go in in person for it! I am presuming the requirement to open also was that you had to go in in person -- that; I've seen often enough, by places that don't want to get too big, want to stay local. Still, something seems very wrong, and possibly very illegal, about having to go in in person to close a CD at the end of its term or they keep it forever!

Have you considered having it closed to a checking account, or even a savings account? I would
definitely ask into that.

Maybe Ken can do an article about this issue -- this would be a HUGE heads up. Imagine if you opened an account in person at a place you could get to, it was a five-year CD, and over that five years, you moved to the other side of the continent!
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paoli2
  |     |   2,641 posts since 2011
me1004:  I think if one moved very far away this would come under their "special circumstances" and they would have to allow you to mail it back to them.  I am just glad they are all at least in my same state.  The big ones like Penfed, Navy FCU, and DCU have never had  an issue of having to give the Original back.  All I have to do is write or contact them about how I want to receive the funds at maturity.  Small town banks just don't seem to be set up to offer these conveniences.  I think if something happened and we really could not go back to them, I could make a big fuss and they would have no choice but to let me mail them all back.  I'll see what my circumstances are for the others which are coming due for the later years. 
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highrate
  |     |   46 posts since 2016
yes, I have never heard of that either.  I have some cd with small banks that have passbooks but they dont require you to show up in person. 
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paoli2
  |     |   2,641 posts since 2011
Just an added note concerning this.  I checked the CD copies today and they do have it written in the disclosure that the Original CD must be signed and returned in order to cash in the CD.  They all even have lines on them in the place they are to be signed to be cashed.  However, I did not see the actual wording that indicated we had to return them "in person".  That could be my out if I decide to mail any.  Frankly, I am concerned about signed CDs for the amounts getting into the wrong hands if they are mailed.  Call me paranoid when it comes to money, I don't like to take any chances.  If it is so hard to cash signed CDs why are the banks acting so paranoid that they are insisting we bring them ourselves and sign them at the banks?
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Ally6770
  |     |   4,292 posts since 2010
If your so concerned about a signature on a check in the mail use a restricted signature or endorsement. 
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paoli2
  |     |   2,641 posts since 2011
?? What is a restricted signature or endorsement?  And wouldn't I have had to set that up when we got the CDs?  Thanks.
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me1004
  |     |   1,379 posts since 2010
It used to be common that banks would issue an actual certificate document, which is a legal document. Those certificates are uncommon now, just like passbooks have been phased out. Yes, those would have to be produced at time of closing.  I don't question that, I only question that you have to show up in person.

As you note about the security issue, that might very well be why they insist you bring it in in person. But as you point out, if that is not in writing as a requirement, on the certificate or in the general disclosures, they can't just make up a requirement out of thin air at time of maturity to block you from getting your money -- that requirement has to be in writing and you must be notified of it (generally in the disclosures you are to be given) before opening the CD, so check not only your CD certificate but also the general disclosures.

So, being as of course you have to produce the certificate, your only options would be going in in person, mailing, or hire someone to personally deliver it. As for mailing, you could do it a bit more safely by sending it certified mail with signature required -- those are more closely monitored by the post office, but of course cost more to mail. But coordinate with you bank about the signature, notify them in advance in case they want it mailed to some different address or to someone's attention in particular -- otherwise when it arrives, they might not accept it from the post office. And, expect that you might have some delay because of that, whomever is the one to sign might not be available when the carrier arrives.

If you do go in, bring in all your certificates and ask into whether you can get them changed so you don't have to bring in the actual certificate in the future.

Re Ally6770's comment about an endorsement on a CHECK that restricts it, first, he/she is talking of a check, not a CD certificate. That would simply be saying on the back something like "for deposit only in such and such bank to account number at such and such," and then signing it. You would have to look over your certificate to see if you even could do that at the signature location, and also read it all over, and the pertinent disclosures, to see if there is any ban on doing that -- I am doubtful that could be accomplished successfully on a CD certificate manually, and you would have to do it by explaining that a check be issued in your name and mailed to you at your address on record.
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paoli2
  |     |   2,641 posts since 2011
Can someone clarify what they are getting from banks and cus as "CDs" nowadays? Don't they still have to give us the form showing it is a CD with all the interest info, EWP, grace period etc on it.  One of my local credit union said they only give out a receipt for money given but I would not budge until they managed to find "old" CD forms to fill in for me to show what I actually paid for.  Are most of you only getting receipts or the old time CD form with info and Disclosures on it? I would just like to know what to really expect these days when I buy what I am used to as being a real CD.  Have they changed what they give us for the money?? Thanks.
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hank
  |     |   110 posts since 2016
yes, every one that I have had at a lot of places all give a piece of paper or a passbook with the amount, interest rate, maturity date.
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me1004
  |     |   1,379 posts since 2010
paoli2, you raised a VERY good point, one that has bothered me for some time now. No, not all banks and CUs are issuing any hard documentation at all to show you opened a CD or what the terms of it are. You might not have anything at all to show it other than when you finally get your first statement showing the CD on it. And thus, if you have a dispute with them about those details, your interest rate, your term and maturity date, you will have nothing to show other than what they give you that you are disputing! You're supposed to just trust them and their record on their side, they never make mistakes or ever commit fraud or ever have a computer glitch, you don't need any documentation to show they are wrong because they are never wrong.

I have run into the situation multiple times now at various places that they don't issue anything, they say you will see the CD on the statement or can go to your account online and see the CD. The latest one I had that issue with is Veridian CU - and I still have NOTHING to show, two months later, they issue statements quarterly, so I won't have anything at all of my own to show I have a CD there until the quarter ends at the end of September. And they say there is no way for me to see that they actually listed my beneficiaries on the CD, not on the statement, not online, and they will not send out anything showing it. They say I can call back and talk with a different CSR and see that they too confirm the beneficiaries!

Not sure, but I think all the statements I get do show how long the CD is for, and the interest rate it is getting today, and if any name of the CD, such as "15-Month Promo CD," that too. From there, you would have to link up to the Disclosures to tell anything else. Similar online. (And online, I already can see my Veridian CD posted there -- but I have no control over that, that is not a hard document I am holding, a mere computer glitch could leave me with no CD ever opened there and no documentation to show I have a CD there.)

I find it VERY bad that the law allows them to do this without you getting any sort of hard document showing you opened a CD and the interest rate you get on it -- or that you have beneficiaries on it. Yes, the disclosures will explain the rules pertaining to the CD, but not the interest rate you got or how much money you put in or the date you opened it and the maturity date.
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Ally6770
  |     |   4,292 posts since 2010
I have used a restricted signature every time since the 70's on large checks and CD's sent through the mail.  I have never had any bank refuse my check or CD when signed this way. 
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Sylvia
  |     |   389 posts since 2012
Sorry to hear that.  What a bummer and major inconvenience for you!  When you say "certain credit unions, and banks, especially," I'm uncertain of the type.  Are they small ones that only conduct business in person with little online presence?  Can you share a name or two, and the relevant wording in their terms and conditions?
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paoli2
  |     |   2,641 posts since 2011
Sylvia, these are mainly small town banks that admit they rarely have out of town customers so my problem is not a usual one for them.  I have called them since posting and they will allow me to mail or even fax a notorized signing of the CDs to them and then mail a Cashiers check back to us for the balance.  That will just increase the time it will take for me to get the money into another local bank or credit union unless I can convince them to let me pay for them to wire the funds.  One even told me they were not set up to "wire" funds.  Are they aware this is 2016 and not 1816?  I thought all banks can wire.  I am not done with this yet so we will see what happens.
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me1004
  |     |   1,379 posts since 2010
Good! Yes, that is ALWAYS something to do when you have an issue: Call back, talk with someone else, try doing that several times -- I have found more often than not that eventually someone just lets you do what you were trying to do.

And if that doesn't work, you can always go up the ladder, and all the way to the CEO (it can be hard to be able to contact the CEO -- I once guessed at what their e-mail address would be after trolling around to find their name, and lucked out, my guess worked, and she just waived their rule -- she actually could not figure out why they had the rule, thought it stupid --  and let me do it, and told staff to let me, although the rule to this day remains unchanged).
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me1004
  |     |   1,379 posts since 2010
Of course, unfortunately, you will probably have to pay $10 (over time, I have come to know which state you are in) for each signature you need to have notarized. If you have another local bank, you might ask this place where you CD is maturing if you can use a signature guarantee instead, as often banks will give out a signature guarantee to customers free, but the notary is a charge.
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Shar
  |     |   21 posts since 2016
Not at Chase.  They have always done notary work for me for free.
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Ally6770
  |     |   4,292 posts since 2010
I have never paid for a signature guarantee or a notary. Even your insurance person is most likely a notary and sometimes even the people working in their office can notarize.  
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ChrisCD
  |     |   134 posts since 2010
We have worked with a hand full of institutions that require the original to be returned.  All of them allowed the original to be mailed.  Some of them even allowed a fax of the signed original knowing the original was in the mail.

Did you open it with a branch visit?  None of our dealings are ever via branch visit, so that may be part of the difference.

Have you tried talking to a supervisor or even higher up?  Often times, folks in upper management can be more reasonable.

cd :O)
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paoli2
  |     |   2,641 posts since 2011
These are smaller banks in small towns I found in my state.  Five years ago I found the only way to get rates closer to 2.5% was to use small town banks which seem to need the business more.  Most have 3 month EWPs so you know they wanted the business!  In fact. in rechecking my list, I realize they "all" are banks.  No credit unions.  I mainly deal with the bigger out of town credit unions that Ken has on this site and they don't ask for the originals.

I have called back about this but they won't budge.  It is not on the CD.  I was told it is a security for the bank to get the CDs back and signed to keep some relative one day finding them and trying to cash them in.  Seems to me their records should show if they were cashed in and the date.  I think it is a ploy to get us back to the bank to try to sell us more.  Unfortunately for them, I have decided not to purchase CDs unless it is in my own city even if I have to take a lower rate.  BTW, these were all opened in the main bank of these hometown banks not just branches.  Under "certain" circumstances a couple did state they would allow me to mail the signed CDs back but I am concerned about their getting lost in mail or taking too long to get the money back and put someplace else closer.
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Sylvia
  |     |   389 posts since 2012
These are apparently old-timey banks, the sort where you might still find a passbook savings account.  I think the issue is less about location and more about business practices.  These are places that are probably still reliant on face-to-face identity verification.  They're insisting on a visit so they can personally check your ID and match signatures, you know, the way they've always done redemptions.
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Ally6770
  |     |   4,292 posts since 2010
Have never had to do this since our first CD's that we started in the 70's. We did drive down to 
a town 30 minutes away because the bank  wanted $25 to transfer an IRA. We did it ourselves because the credit union we were going to was in our town. This allowed us to ask some friends
that lived in that town to share our picnic at the lake with us 
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HollyHolly
  |     |   89 posts since 2015
Many credit unions have shared branches and are part of the coop shared branch network.  If your CU
is part of a coop shared network, you can go to a branch near you (if there is one) to make a deposit or to get your money.
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paoli2
  |     |   2,641 posts since 2011
Unfortunately, I was informed that one cannot close a CD and get the funds from a shared branch.  Maybe certain shared branches will close the CD but the ones I have used won't.  Also the institutions I am dealing with which are out of town are all banks.  They don't have shared branches.
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me1004
  |     |   1,379 posts since 2010
Not all CUs are part of the shared branch system. (One major one that is not is Alliant CU.)
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Ricochet
  |     |   522 posts since 2010
^^ 
Stirs Pot
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Stewie
  |     |   87 posts since 2010
Not only was the pot not stirred, but nary a leaf stirred nor a dog stirred....
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Ricochet
  |     |   522 posts since 2010
got my vote.
reason has prevailed
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paoli2
  |     |   2,641 posts since 2011
If you don't stir the pot, it's not worth eating. Here's to all pot stirrers!
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Romulus
  |     |   11 posts since 2011
Last year I had tremendous problems getting MY money from a number of banks & credit unions when the CD's matured.  My concern was that they might have been failing because they were unwilling to pay me the funds... I did force the issue.  I've not known what to do since then since writing to their presidents yielded no results.  I would like to know what the Federal Law is but have not had time to check.
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Ricochet
  |     |   522 posts since 2010
Romulans  have always forced the issues without checking

Star Date :: 2016

Go easy on me moderators
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