Money Market 5.98 Apy 6 Month Bonus Rate

kylenb | Sep 24, 2018 | 2 posts since 2018

While on vacation over the weekend I stumbled upon a newspaper ad for First Financial Guarantee with two great rates. 6 Moth CD 5.65% apy. and 5.98% apy money market. I have a pic of the ad but I am unable to upload it. Thought it was odd I could not locate the institution in the search. So I thought I would ask the group there thoughts.

http://www.ffg-llc.com/

Fort Meyers 239 936 1939

Naples 239 263 1680

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Answers

alan1 | Sep 24, 2018 | 877 posts since 2015

Hold on to your wallet!

"How Financial Companies Can Advertise Very High CD Rates In Newspapers" by Ken Tumin,
May 22, 2011
https://www.depositaccounts.com/community/misc/4713-how-financial-companies-can-advertise-very-high-cd-rates-in-newspapers.html

and
From Spring 2009 "FDIC Consumer News":
Beware of an advertised CD rate far above the competition. First, it could be a product issued by a company that is not federally insured and any money invested is at risk. Second, it could be a marketing ploy. "An offer of a very high interest rate may be a lure to promote the sale of non-insured products," said Richard M. Schwartz, an FDIC attorney who specializes in consumer issues. "Some non-bank companies are using the FDIC logo and good name to draw customers in the door for a bank CD, but sooner or later, they're going to try to lock them into a long-term investment that may not be in the customer's best interest."

In one variation, a company may advertise in the local newspaper a 5.0 percent interest rate for a six-month bank CD for consumers with $10,000 to invest. When a customer calls, he or she is told to come to the office to discuss the details. It turns out that the bank is paying only 2.5 percent — not 5.0 percent — but the sales person for the company offers to add enough money to the CD purchase to make up the difference. When the CD matures, there's no similar offer on a new CD and the individual can be steered into purchasing a non-insured investment that may be a poor choice for the consumer but very lucrative for the sellers.

Schwartz offers this final advice: "If you are purchasing a CD, verify that it is issued by a federally insured depository institution. Understand the interest rate and the terms offered. Finally, research the going interest rates from banks locally and around the country, and if you find an offer that sounds too good to be true, be aware that there will definitely be strings attached."

http://web.archive.org/web/20090607012558/http://www.fdic.gov:80/consumers/consumer/news/cnspr09/shopping.html

alan1 | Sep 24, 2018 | 877 posts since 2015

And also check out this article by Ken Tumin from August 22, 2010
https://www.depositaccounts.com/blog/very-high-cd-rates-advertised-in-newspapers-are-they-real.html

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