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  4. EWP On Andrews 84 Month CD Changes From 180 Days To 360 Days.

EWP On Andrews 84 Month CD Changes From 180 Days To 360 Days.

EdwardD
  |     |   77 posts since 2023

Has anyone recently closed early your 84 month CD which you opened before the new 360 days EWP phrase was added? Were you charged 180 or 365 days dividends?

According to current Truth-In-Savings Rev, July 2022:

Early Withdrawal Penalties (a penalty may be imposed for principal withdrawals before maturity):

• If your account has an original maturity of less than 24 months, we will charge a penalty equal to 90 days of dividends.

• If your account has an original maturity date of 24 months or greater, we will charge a penalty equal to 180 days of dividends.

• Certain Special share certificates (i.e. 55-month or 84-month) may carry a penalty equal to 360 days of dividends.

According to the Truth-In-Savings Rev. March 2016 (when I opened my 84 month CD):

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

• If your account has an original maturity of less than 24 months, we will charge a penalty equal to 90 days of dividends.

• If your account has an original maturity date of 24 months or greater, we will charge a penalty equal to 180 days of dividends.

I have two 84-month CDs with them earning 3.01% APY maturing in December this year. If they still grandfather the old CD and honor the old180 days EWP, I am wondering if I should break it off now or hold until maturity in December and hope rate will still be high at that time.

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4


Answers
111
  |     |   672 posts since 2019
“Has anyone recently closed early your 84 month [Andrews] CD which you opened before the new 360 days EWP phrase was added?” Well not exactly closed but pretty close. Mine matures in 11/2023. In 11/2022 I stripped all interest from it via an Andrews chat CSR.
 
BTW, this CD was a great deal at the time, preceding even the last rate peak of 2018-early 2019. But, I should have closed it early in 2019 when I bought some 4% CDs. It was in the on-deck position on the list, but the next 4% CD available (Connexus, maybe?) that I would have bought closed faster than I could react. Snooze = Lose. What I really should have done is close it anyway, and put the funds in stock funds/ETFs like I did with other funds.
 
Anyway, back to the present. In the Andrews chat session in 11/2002 I also had the CSR confirm the 180 day EWP based upon his records (I had the original disclosure form from 11/2016 stating that - as I think you said you do - which is always a good back-up). Just a few days ago, I chatted again and by chance got the same CSR. I referenced the earlier chat, and asked him to specify both the complete EWP and the closing amount if I were to close the CD early that day. The EWP he quoted was clearly a 180-day EWP. I haven't yet closed it but probably will. Based on my experiences I very much recommend using a chat and not a phone CSR with Andrews CU.
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JeffinEasternFL
  |     |   744 posts since 2020
Take all the interest accumulated now and every month forward, depending if you have to pay for a wire xfer at minimal cost or can simply do an ACH monthly and plop it into your MBOI Money Market Checking Account at 4.34% APY (and rising!)
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EdwardD
  |     |   77 posts since 2023
I had withdrawn all dividends credited in early January this year. Since dividends on the 84-month CD are credited quarterly, I need to wait until current dividends are paid on 3/31/2023. Wondering if earned but not yet credited dividends will be paid out if CD is closed early.
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denki
  |     |   158 posts since 2019
Thanks for the bringing that to our attention. I have an 84mo CD that still has around a year or so left on it, but for the (relatively) small amount of the CD I don't think it's worth the hassle to take the interest out early. I suppose I could put it elsewhere for a year @ 5% or so but the CD isn't all that big so the difference for me wouldn't be all that much.

Still, very disappointed to hear Andrews changed their EWP. I have in my notes from the time (I always notate everything when opening a CD) that the EWP was 180 days. I would hope Andrews would honor the terms at opening, but knowing them probably not.

Honestly, I don't know if I'd permanently "close" my Andrews account (after all, who knows if they'll have something good in the future) but I've been pretty disappointed with them for a while. No good offerings, and their customer service has been pretty terrible on the few times I've called them over the years (friendly agents that never seem to be able to help or answer questions), maybe I'll try chat like you suggested.

Thanks for the heads up.
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denki
  |     |   158 posts since 2019
PS: I assume you have the original paperwork, but in case you don't the Share Certificate Disclosure from the time does state that "Dividends credited during the term may be withdrawn at any time during the term" -- note "credited" so my guess is you'd have to wait until they were credited. Don't think (hope so) you would lose them if you tried to withdraw the dividends between quaters, but my guess is you would only have access to those dividends already credited (so if you want the dividends for Feb you'd have to wait until the end of March).

My Share Certificate Disclosure does indeed say "For share certificates with terms greater than or equal to 24 months, we will impose a penalty of 180 days of dividends."

Still, for me at least (mine matures in about 12 months) I ran the numbers and the difference wouldn't be that great. Unless yours is a very large one, probably not worth it to close at this point, even at 180 EWP. However you could get at the credited dividends without penalty and put those elsewhere, but you'll have to decide if it's worth the effort for that based on how small/large your available dividends are.
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CDMD
  |     |   141 posts since 2022
To all. I think there needs to be a differentiation in your CDs for “special” cds. Those have a unique penalty to their own. I did just close several “84 month special cds” and the penalty was 360 days. I opened them in 2019 and incurred the penalty this past January to go to a higher CD recently that made financial sense to me. I calculated I would more than make up the penalty within a year and earn more over the original remaining term. However to your question. if your cd was not a special offer cd the penalty was less in days as you stated.  Check your disclosures but please note if your cd was a special or not. 
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LongTimeDAFan
  |     |   69 posts since 2022
Same here. We had the special 84 mo CDs, and they had a 360 day EWP. I had all interest moved out of the CD at no penalty and then closed them mid-quarter. They did post my accrued interest at that time, and my EWP was applied to the entire balance withdrawn (principal + accrued interest). So my 1099-INT for last year from Andrews shows a lower interest figure than EWP figure. (ouch!)
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111
  |     |   672 posts since 2019
This is kinda' like “CD Archaeology 101”. Piecing together various people's comments, we seem to have my 84-month CD maturing in 11/2023 (opened 11/2016), EdwardD's in 12/2023 (opened 12/2016), and denki's in about 2/2024 (opened about 2/2017). Based on the comments all these seem to have the 180-day EWP.

CDMD's CDs were opened in 2019, not sure when LongTimeDAFan's were opened but both of theirs were apparently denoted as “special”. So it looks like CDMD's assertion that special = 360-day EWP for these is probably correct, and the re-designation of new 84-month CDs by Andrews as special happened between 2/2017 and sometime in 2019.

For my CD, I found nothing in my paperwork or notes denoting it as special, and the disclosure form contains only the “less than 24 months = 90 days, greater than or equal to 24 months = 180 days” EWP language.

One other thing - when I chatted with Andrews last November, I had on my PC a scan of my original disclosure form from 11/2016 (titled “Share Certificate Disclosure”); however, the scan was a bit askew, and not OCR-searchable. So I asked him if could send it to me as a PDF file, and he did. (Incidentally, the new one contains exactly the same text as the original, so no funny stuff going on.)

So, if some who have this CD (especially if bought between 2/2017 and 2019) but who can't locate the original paperwork want to check on the “special” designation, they should be able to get a PDF of their original disclosure form from an Andrews chat CSR.
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LongTimeDAFan
  |     |   69 posts since 2022
My paperwork does say "84 mo Special". Opened Feb 2020.
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EdwardD
  |     |   77 posts since 2023
Update: After I posted my question, I also sent SM to Andrews. In their SM response, they calculated what my EWP penalty amount would be for my two 84m CDs opened in 2016. The penalty amount provided is calculated based on the 180d dividends.

However, in online banking, these two CDs are listed as "84 month Specials". But my penalty is still 180d instead of 360d. So I suspect the penalty is more based on the opening date.
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