High Fees for Withdrawing Pre-mature CDs

Posted on February 15th, 2007 in CDs by Smarty

I have a 13 month Washington Mutual CD that’s going to mature at the end of September 2007, but I need funds in my checking account and I want to withdraw early from my CD. I called up the bank about the interest earned to date. I have roughly $1400. Then I asked about the penalty if I withdraw early.The representative told me that the penalty is a $1570 fee. That means I will have a loss in principal if I withdraw early. Clearly, it’s not a smart move to withdraw early, since I’m half-way through the CD terms. I’ll just have to tranfer funds to my checking account from other accounts, and not touch this CD account until it matures.

EverBank Icelandic krona 13.10% APY 3-Month CD

Posted on January 5th, 2007 in CDs by Smarty

Empty Spaces Inc. said…

have you looked into everbank.com’s icelandic CD? it pay ~10%

EverBank offers a 13.10% APY 3-Month Icelandic krona CD. The yield looks very attractive so I did some research on this CD. The CD is FDIC-insured. And the reason why the yield is so high is because Iceland is combating inflation and the banks are offering high-yield CDs to combat inflation. So what’s the big catch on this CD? I found out that you can lose on principal in the CD, because the krona currency fluctuates. Also, there’s a exchange rate fee. The conversion fee is three quarters of a percent (0.0075%) for CDs less than $100,000.

The way it works is that your US Dollars get converted to Icelandic kronas and then at maturity if you decide to withdraw, the kronas will be converted back to US Dollars. The exchange rate then could be different from the start of the CD.

Does any one has experience with Icelandic CDs? Do you think it is low risk? Are they are other catches I am missing?