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Has anyone ever gotten the bank to wave the EWP on a CD?
Old 06-18-2018, 09:17 AM   #1
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Has anyone ever gotten the bank to wave the EWP on a CD?

I have some 5 year CD's with my credit union (LMCU) that I opened before the rates started creeping up.They have about 2 1/2 years left, only paying 2.05%

Has anyone ever gotten a bank or CU to wave the EWP and switch the funds to a higher paying CD with a similar term thats left on the original CD? (for example, if there were 24 months left on the original CD, the funds would be put in a new 24 month CD at the higher current rate)

My leverage would be that if I have to pay the penalty's, I will move all my funds out of their CU (currently have around 250K there) and put the funds in my Fido account, and invest from there.
If they wave the EWP's, I would keep the funds there in a new CD.

Has anybody tried this with any success?
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Old 06-18-2018, 09:25 AM   #2
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I've never tried that, let us know if it works. I kinda doubt it, it would depend on the latitude the manager of the CU has.
It might not apply to you, but some institutions allow penalty-free early early withdrawals from CDs to meet RMDs. So, the amount won't be a large percentage.
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Old 06-18-2018, 09:34 AM   #3
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So you entered into an agreement. Now you want to change the terms. Threat of moving funds elsewhere if you don't get your way. You are a stand up person.
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Old 06-18-2018, 09:38 AM   #4
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I would do the math first, losing 2% gains to drop into some newer CD's might at best break even if moved to new ones.

Perhaps document offers at similar banks, which offer stuff like one-time rate increases during the term?

I'd say your chances are slim to none though, rates are baked in with features, so things like ally's no penalty CD always pay a bit less than their regular ones. IE, today Ally's 1 year pays 2.3, whereas their no-penalty pays 1.8. Hard to imagine you can have your cake and eat it too. Plus regulatory bank stuff, i doubt exceptions can be made.
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Old 06-18-2018, 09:47 AM   #5
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So you entered into an agreement. Now you want to change the terms. Threat of moving funds elsewhere if you don't get your way. You are a stand up person.
There is no harm in asking. If the CU determines that retaining the funds is worth more than the EWP, then it is a win-win.

It's not breaking a contract, it called renegotiating a contract. Any party at any time can ask to renegotiate, it's done all the time. And the other party can just say "no". No big deal, nothing unethical about it at all.

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Old 06-18-2018, 09:51 AM   #6
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Never tried it.
If I was the CU, I'd see that you are not following the agreement, so naturally I'd wonder if you would follow the new deal ?
What will you do when interest rates in 1 year are another 1% higher ?

If you got a 30 yr mortgage at the CU, and in 5 years the interest rates are a few percentage higher, would you be OK with them increasing the mortgage rate as they would be getting too low a rate ?
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Old 06-18-2018, 09:56 AM   #7
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My CU told me verbally they don't enforce EWP for older IRA CDs if owner is >59.5 but I never tried to actually do it. It doesn't hurt to ask courteously for a waiver. Read the disclosure carefully to see if it includes any exceptions. Also run the EWP calculator at depositaccounts.com to find your break even point.
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Old 06-18-2018, 10:01 AM   #8
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There is no harm in asking. If the CU determines that retaining the funds is worth more than the EWP, then it is a win-win.

It's not breaking a contract, it called renegotiating a contract. Any party at any time can ask to renegotiate, it's done all the time. And the other party can just say "no". No big deal, nothing unethical about it at all.

-ERD50
Never said it's unethical, but perhaps immoral. OP should just realize THEY made a bad decision a live with the consequences, after all that's what people with morals do.

And with CD's "any" party doesn't renegotiate all the time as the CU never has the chance to renegotiate to their favor, they will stand behind what they agreed to. Would you be OK if the CU saw rates on CD"s had continued to go down and now came to you and said they were going to lower your rate? Doubt it.
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Old 06-18-2018, 10:05 AM   #9
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My CU told me verbally they don't enforce EWP for older IRA CDs if owner is >59.5 but I never tried to actually do it. It doesn't hurt to ask courteously for a waiver. Read the disclosure carefully to see if it includes any exceptions. Also run the EWP calculator at depositaccounts.com to find your break even point.
Agree it doesn't hurt to ask, and perhaps there's a chance if they've been long term customers and have other assets there. But there is nothing "courteously" with OP's request. He's already said it's do it or I'm moving my funds elsewhere.
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Old 06-18-2018, 10:05 AM   #10
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I doubt they will let you change the terms and conditions.

Having said that, I have several $53k CD's with Synchrony bank that are getting 2.25% with a 6 mos penalty. I did the math and if I break a CD (and take the penalty) and open a new 3.3% CD (Vanguard new issue) then it would earn $655 more (over the course of 5 years) Ö than it would to let the current CD run its course and then open a new one (assuming rates stayed at 3.3%).

I am considering breaking a couple of these CD's. I have not done so yet since I am wondering if rates will continue to climb in the near term.
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Old 06-18-2018, 10:25 AM   #11
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I look at it this way. Do you want to use up all of your "make me happy or I leave" goodwill cards over CD rates where you knowingly signed up for a fixed return for a certain length of time in a rising rate environment
or
play those cards when something serious occurs like fraud on your account
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Old 06-18-2018, 10:27 AM   #12
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Originally Posted by Sunset View Post
Never tried it.
If I was the CU, I'd see that you are not following the agreement, so naturally I'd wonder if you would follow the new deal ?
What will you do when interest rates in 1 year are another 1% higher ?

If you got a 30 yr mortgage at the CU, and in 5 years the interest rates are a few percentage higher, would you be OK with them increasing the mortgage rate as they would be getting too low a rate ?
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Originally Posted by bobandsherry View Post
Never said it's unethical, but perhaps immoral. OP should just realize THEY made a bad decision a live with the consequences, after all that's what people with morals do.

And with CD's "any" party doesn't renegotiate all the time as the CU never has the chance to renegotiate to their favor, they will stand behind what they agreed to. Would you be OK if the CU saw rates on CD"s had continued to go down and now came to you and said they were going to lower your rate? Doubt it.
You are totally twisting what the OP is asking about. Your scenarios have absolutely nothing to do with it or my comments.

This is about asking if they want to renegotiate. There is nothing illegal, immoral, or unethical about asking.

There really is no way for OP to do anything outside the contract he agreed to, unless CU agrees to it as well. They hold all the cards (he can't w/d the money w/o paying the EWP, unless CU agrees to it). And why would they voluntarily agree? Only if they felt it was a benefit to them. And if they did, then it is a win-win. The alternative is they lose the funds, as OP would (as defined in the contract), withdraw the funds and pay the EWP.

That is completely different from my CU telling me they are going to change the contracted rate on a mortgage or CD. They can't do that, period.

They can ask - and of course I would say "NO", unless they offered me something to sweeten the deal. Maybe a different rate, but a different term? Maybe offer to increase the amount applied, but at a mix of old/new? If we come to a win-win, we then have a new contract to replace the old. Nothing wrong about that in any way, shape or form. Just the opposite, since it is a win-win, it is good for all.

It's a good thing all the way around for OP to ask. Otherwise, he takes his money, pays the EWP and that's it. CU never was given a chance to negotiate a win-win. Why not give them that chance?

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Old 06-18-2018, 10:28 AM   #13
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Originally Posted by bobandsherry View Post
So you entered into an agreement. Now you want to change the terms. Threat of moving funds elsewhere if you don't get your way. You are a stand up person.
It's called negotiations. If you don't want to address my original question, then move on, I don'd need your smart a__ remarks.
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Old 06-18-2018, 10:40 AM   #14
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You are totally twisting what the OP is asking about. Your scenarios have absolutely nothing to do with it or my comments.

This is about asking if they want to renegotiate. There is nothing illegal, immoral, or unethical about asking.

There really is no way for OP to do anything outside the contract he agreed to, unless CU agrees to it as well. They hold all the cards (he can't w/d the money w/o paying the EWP, unless CU agrees to it). And why would they voluntarily agree? Only if they felt it was a benefit to them. And if they did, then it is a win-win. The alternative is they lose the funds, as OP would (as defined in the contract), withdraw the funds and pay the EWP.

That is completely different from my CU telling me they are going to change the contracted rate on a mortgage or CD. They can't do that, period.

They can ask - and of course I would say "NO", unless they offered me something to sweeten the deal. Maybe a different rate, but a different term? Maybe offer to increase the amount applied, but at a mix of old/new? If we come to a win-win, we then have a new contract to replace the old. Nothing wrong about that in any way, shape or form.

-ERD50



The problem is that OP is not asking... he is demanding.... either let me out of my CD or I will move all of my money... IMO, demanding is much different than asking...





One of the problems with doing it at a CU instead of a bank is that the CU usually does not have the same turnover and they will remember... this could affect you some time in the future...


Also, if I were the CU manager with this kind of demand I would assume that you are going to be leaving anyhow... making an all or nothing demand (do or die) means the customer is already out the door... just a matter of time... I would not let you off...
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Old 06-18-2018, 10:42 AM   #15
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I look at it this way. Do you want to use up all of your "make me happy or I leave" goodwill cards over CD rates where you knowingly signed up for a fixed return for a certain length of time in a rising rate environment
or
play those cards when something serious occurs like fraud on your account
But would it be giving up any 'goodwill'? For all we know, the CU would be happy to reduce the EWP to keep the funds. So if OP doesn't ask, the CU just loses the funds (and gets the full EWP).

Why not give the CU the opportunity to negotiate a deal. They can always say 'NO", and then everything is where it was. How is any harm done?

-ERD50
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Old 06-18-2018, 10:52 AM   #16
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But would it be giving up any 'goodwill'? For all we know, the CU would be happy to reduce the EWP to keep the funds. So if OP doesn't ask, the CU just loses the funds (and gets the full EWP).

Why not give the CU the opportunity to negotiate a deal. They can always say 'NO", and then everything is where it was. How is any harm done?

-ERD50
Its the notes entered into your file. Develop a history as a malcontent or "high maintenance" with the institution and they'll quit doing you favors. Save the powder for a worth while battle.
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Old 06-18-2018, 11:10 AM   #17
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But would it be giving up any 'goodwill'? For all we know, the CU would be happy to reduce the EWP to keep the funds. So if OP doesn't ask, the CU just loses the funds (and gets the full EWP).

Why not give the CU the opportunity to negotiate a deal. They can always say 'NO", and then everything is where it was. How is any harm done?

-ERD50
Go back and re-read the original post. This isn't just about asking. It clearly states a threat if CU doesn't comply. That's the part that I and others have take offense to.
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Old 06-18-2018, 11:18 AM   #18
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Its the notes entered into your file. Develop a history as a malcontent or "high maintenance" with the institution and they'll quit doing you favors. Save the powder for a worth while battle.
But again, it's not clear that asking would be considered an issue by the CU.

As I've mentioned, this could be seen as doing a favor for the CU - giving them an opportunity that didn't exist otherwise.

To put a finer point on this - I assume you are 100% OK with OP deciding to cash in the CD, and pay the agreed to EWP - that's all part of the contract, right? He can then take that money, and do whatever he wants, buy a new CD, spend it, burn it in the fire pit.

If he does that, the CU has no choice in the matter. They accept the EWP and give him what's left. The money is gone from their account.

So by asking, the CU now has an alternative. They can weigh it, and accept or decline. I see no way that offering up an alternative is a negative. OP isn't 'threatening' them with anything other than he would do under the current contract anyhow (taking his money out). It's all voluntary, take it or leave it.

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Old 06-18-2018, 11:23 AM   #19
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Go back and re-read the original post. This isn't just about asking. It clearly states a threat if CU doesn't comply. That's the part that I and others have take offense to.
OK, I see the "threat" includes his other funds outside the CD. I did miss that on the first go-around.

In that case, OK, maybe the CU would see this as "high maintenance" and not be too motivated to go above/beyond to help out in the future. I still don't see that as an ethical issue, but OP should be aware he might be giving up more value than he thinks. But that's his problem, as I see it. CU can do as they wish as well.

It's still all voluntary on either side. I don't have a problem with it, but yes, there may be consequences.


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Old 06-18-2018, 11:33 AM   #20
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But again, it's not clear that asking would be considered an issue by the CU.

As I've mentioned, this could be seen as doing a favor for the CU - giving them an opportunity that didn't exist otherwise.

To put a finer point on this - I assume you are 100% OK with OP deciding to cash in the CD, and pay the agreed to EWP - that's all part of the contract, right? He can then take that money, and do whatever he wants, buy a new CD, spend it, burn it in the fire pit.

If he does that, the CU has no choice in the matter. They accept the EWP and give him what's left. The money is gone from their account.

So by asking, the CU now has an alternative. They can weigh it, and accept or decline. I see no way that offering up an alternative is a negative. OP isn't 'threatening' them with anything other than he would do under the current contract anyhow (taking his money out). It's all voluntary, take it or leave it.

-ERD50
I think you're twisting a little bit more into it with "OP isn't threatening". OP is willing to re-invest at the same institution, just wants the higher rate, but will remove his money (assuming OP actually does it and isn't just bluffing for "leverage") from the institution if he doesn't get his cake and eat it too.

Yes. Viewed strictly as an isolated event, it could be seen as "voluntary, take it or leave it". But accumulated behavior over a long term relationship its burning good will.
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