Question: My husband and I had a six-month CD with Countrywide Bank at a great 5.55 percent. News of the company’s subprime troubles concerned us, so when the CD matured in September (value: $37,745), we decided to cash it in. We mailed the form during the 10-day grace period and waited. No check. Upon calling, we were told that the bank hadn’t gotten the form and that the funds had been rolled over into another CD. We faxed another request and got our money - minus a $396 penalty! We didn’t do anything wrong. Can you help? -Barb Foster, Fairfield, Calif.
Answer: Losing half the interest you made may seem extreme, but Countrywide isn’t alone in imposing harsh penalties for early withdrawals. Banks set terms on CDs because they use the deposits to fund loans and want to ensure that they’ll have money at their disposal. On average you’ll lose three [...]
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