Comments on: What is a Callable CD? and Why Current Callable CDs Don’t Make Sense

By: Otto

Otto — Mon, 18 Apr 2011 22:26:09 +0000

I have callable CD’s. My objective is to get the most interest possible with FDIC backing. I’m currently getting between 5 – 6 percent on 5 long term CD’s. These were purchased for my IRA approximately 2 years ago. It’s a small percentage of my overall income oriented portfolio. If you want to poo-ppo that, you are welcome to do so. But I will be collecting my quarterly interest rates while you go and try to get that rate elsewhere – good luck. I’ll take the risk of being called but meanwhile I’m collecting 5 times the going CD rate. I’ll figure out what to do when the problem arises. I’m sure my investment folks will find something that pays more than 1%.

By: BibleDebt

BibleDebt — Wed, 14 Apr 2010 01:41:23 +0000

This is my first exposure to the concept of callable CD’s. Thanks for sharing. It doesn’t sounds to enticing unless you can get an extra good interest rate for the time you take the CD out

By: Money Reasons

Money Reasons — Tue, 13 Apr 2010 22:59:06 +0000

I think they are banking on customers who have very bad math skills… People see that end rate, and jump in without doing the math…

Perhaps they are thinking “Tricking the customers, Good times…”

By: Evan

Evan — Tue, 13 Apr 2010 18:01:23 +0000

So it isn’t me, right? This product sucks. I usually like to say IF a product exists it has to have some utlility for somone. I have used that line of reasoning for Variable Universal Life, Variable Annuities, Whole Life, etc. (of course I can provide instances when it would help someone). But, I can’t figure out WHEN this would help ANYONE!

By: Kevin M

Kevin M — Tue, 13 Apr 2010 16:54:15 +0000

It’s like a reverse teaser rate! In this case putting the huge interest rates at the end, trying to sucker people into buying now. I can’t think of any situation this would favor the buyer.

5 year CDs are around 3% right now, that would seem to be the better play.