With so many other credit unions and banks today allowing CD owners to specify in advance (of maturity) how their funds are to be treated at maturity, I telephoned CCU (Consumer’s Credit Union, in Illinois) to request the same favor.
REQUEST DENIED!! was the response I received. You must wait until your CD actually matures, then you have ten days to specify what is to become of your funds.
So, asked I, what if I am incapacitated on day of maturity and physically unable to contact CCU? I could be in the hospital, or in a car accident, or could be facing an overwhelming family emergency.
Their response: Tough toenails. You can always get your money out after the ten days . . . . but of course we will charge you an early withdrawal penalty!!
I was not pleased, but my only option it appears is to cease doing business with CCU.
You know, at twenty-first century financial institutions, e.g., Ally Bank, you can log into your account and change your election at CD maturity online!! And you can do this at ANY TIME YOU WISH once the CD is open.
Then, OTOH, we have outfits like CCU which still are operating as if it were the 1950’s.
Standard business practice for a lot of CDs is to wait for the lazy customer not to shop rates and auto-renew them at some poor rate. If you ask for a better rate at the time, yeah, you’ll probably get it, but don’t ask and don’t be surprised.
I feel your pain, and agree it ought to be a simple checkbox online to change it. However, for an additional data point, Synchrony Bank does the same thing. There is no option to select when you open a CD, and once open, it says “Automatically Renewed at same Term”. I bet if interest rates were expected to fall, it wouldn’t say exactly that.
There is an account details page but it doesn’t have any option for changing the maturity action.
FWIW, I contacted their customer service and they said “Yeah, sure, we’ll change that for you” and then did nothing.
This is absolutely ridiculous. And crazy that them allowing you to decline an auto-renewal ahead of time is a favor to you.
How widespread is this practice? Has it withstood challenges?
The only CD I have is in an NFCU IRA because of the bonus the were offering, and they let me choose maturity instructions at the time I set it up, and I can choose online at any time throughout the period. I think they also give a 30 day no-fee window after maturity.
Part of the problem, I think, is archaic IT work. The systems at the incompetent financial institutions are not close to being “up to speed” or up to date. They are still operating with old software which is incapable of providing the needed customer or member service.
I did even ask if I could “write a letter” or something . . . . . you know, something as archaic as their system is what I meant. They did not want to hear from me, by any means, until my CD matured.
Bottom line, CCU is simply a stone age financial services provider.
The credit union may be old and have terrible service/technology, but that’s a risk that should be assumed if you’re going to the bank with the highest rate CDs available.
But specifically this. If this is correct, its basically an auto-renewal contract where you only have a 10 day window (not just before a time period). I’ve never seen anything like that before. I think the only way I’ve seen it worded is variations of “notice of termination at least sixty days prior to [date].”
When you buy CDs through an online broker, you don’t have to be concerned about things like this. If you want to continue to buy CDs at banks, stick to the ones that allow you the flexibility that you want.
Is there something special about their rates?
I looked them up and found “deals” for a 30 month CD for 1.60% (min. $250) or 1.85% (min. $100,000) and “new money only” rates for 1.00% for 11 months (min. $250) or 1.25% (min. $100,000).
This morning I telephoned NFCU (Northwest) regarding a matter unrelated. But I have a CD there which matures in the fall of this year, so I took the opportunity to inquire about the issue which is the topic here.
First the rep explained they will send out a document thirty days in advance which allows account holder to select disposition method at maturity. I asked if I might be allowed straightaway to make my selection . . like right now!!
The response: “Sure, no problem”!!!
And she took my instruction on the spot with no hassle at all.
I also have an account with Northwest, not sure when the CD matures. But, back to Consumer CU. Have you seen anything that looks attractive to place these funds when mature? We can always go to that add-on CD with GTE Financial 2.78%.