Has anyone ever gotten the bank to wave the EWP on a CD?

[ERD50]

We use two banks. The big bank waves fees at us for everything. The little bank waives fees for us for almost everything.

 

[jazz4cash]

OP
What rates are available to you for 24 months? I see around 2.4 which is not huge difference, so unless it's a very large balance is it really worth it?

 

[OldShooter]

If I was a CU manager and was approached with an ultimatum as stated in the OP, I would simply refuse and hope the customer did leave. I would certainly not train him to think that he can get me to lose money simply by threatening to pull his savings. Unlike dogs, customers usually need only one lesson to learn a bad habit.

 

[street]

I have asked for a better rate on CD's many times and they have always accomodated me. The president did say every time that he will do it but I need to keep the money with him. I have kept my word through the years and so has he. He knows for him to keep people they need to work with us also

 

[Ready]

If I'm understanding this correctly:

OP purchased five year CDs at 2.05%. OP agreed to either keep the funds at the CU for five years or pay an EWP for early withdrawal.

Rates have increased an OP now has the option to exercise the EWP clause and reinvest the funds (and additional funds outside the CD) at a higher rate available at another competing institution.

If I was the OP, I would have a very simple conversation with a manager at the CU. It would go as follows:

I currently have a CD at 2.05%. I now have other options that are paying a higher rate at a competing institution. I'm considering exercising my EWP clause and moving my funds, along with other funds outside the CD, to another institution to achieve a higher rate. Before I do so, I would like to know if you would consider raising my rate on my current CD in return for me leaving all of my funds with your institution.

OP has now made an offer to renegotiate the terms of his contract. The CU can either accept, reject our counter the offer. Regardless of the outcome, the bank will either get to keep the funds for several additional years, or will earn an EWP from the customer for terminating early.

Maybe I'm missing something but this is just simple business. I see no morale or ethical issues here. If I was the CFO of a public corporation and I didn't do what the OP is considering, the stockholders would go after me for dereliction of duties. You have a responsibility to ensure that your funds are invested for the highest and best rates available. The banks and CUs have more than adequately protected themselves with their extensive legal agreements and heavy EWPs for pulling the money out early.

What am I missing?

 

[bobandsherry]

What am I missing?

I dunno, maybe the other 28 messages before yours?

This one may help.

 

[redduck]

OP should just realize THEY made a bad decision a live with the consequences, after all that's what people with morals do.

Guess this answers the question of what people with morals do. Good to know.

 

[Texas Proud]

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.

I do not think it is immoral at all... it is renegotiating the contract... I just think that coming at it as a threat is not going to work... I think Ready had a better approach and it has the same result but not in a form of a threat...


BTW, banks change their terms all the time... There have been many businesses that had big financial troubles in the 07-08 timeframe and banks yanked their line of credit.... and some were proven to be against the contract... they thought it was better for them (the bank) and screwed the customer...

 

[Ready]

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.

What bad decision was made here? I always purchase 5 year CDs to lock in the highest rate available, knowing that if rates go up I can choose to pay the EWP and reinvest the funds at the higher rates. That's the whole point of offering an EWP. It's a guarantee that you can pay a fixed termination fee to pull your money out early.

I've commented on many prior threads about the disadvantage of purchasing brokered CDs, where instead of paying a fixed EWP you have to sell the CD on the open market at whatever the prevailing value is. That's why I always favor bank CDs over brokered ones.

 

[youbet]

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?

I haven't negotiated away an EWP, but I recently got my CU to consider cash I had in a passbook account there with them to be "new money" for the purpose of buying a CD with a special offer interest rate (as a marketing scheme to attract new deposits). You can always ask...….

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.

In your position, I'd move my money to Fido regardless. Just be ready to deal with the consequences of brokered CD's.

 

[audreyh1]

If I'm understanding this correctly:

OP purchased five year CDs at 2.05%. OP agreed to either keep the funds at the CU for five years or pay an EWP for early withdrawal.

Rates have increased an OP now has the option to exercise the EWP clause and reinvest the funds (and additional funds outside the CD) at a higher rate available at another competing institution.

If I was the OP, I would have a very simple conversation with a manager at the CU. It would go as follows:

I currently have a CD at 2.05%. I now have other options that are paying a higher rate at a competing institution. I'm considering exercising my EWP clause and moving my funds, along with other funds outside the CD, to another institution to achieve a higher rate. Before I do so, I would like to know if you would consider raising my rate on my current CD in return for me leaving all of my funds with your institution.

OP has now made an offer to renegotiate the terms of his contract. The CU can either accept, reject our counter the offer. Regardless of the outcome, the bank will either get to keep the funds for several additional years, or will earn an EWP from the customer for terminating early.

Maybe I'm missing something but this is just simple business. I see no morale or ethical issues here. If I was the CFO of a public corporation and I didn't do what the OP is considering, the stockholders would go after me for dereliction of duties. You have a responsibility to ensure that your funds are invested for the highest and best rates available. The banks and CUs have more than adequately protected themselves with their extensive legal agreements and heavy EWPs for pulling the money out early.

What am I missing?

I don’t think you are missing anything. I think it’s pretty straightforward. Instead of just paying the EWP and moving funds elsewhere with no feedback, the OP is giving the bank the opportunity to offer alternatives.

 

[Bestwifeever]

Pretty sure we’re going to plop RMDs every year into CDs with TOD to our kids. We’ll let them wave them at the banks after we’re gone.

 

[redduck]

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, maybe I am missing something here. Where do you see that others-- other than yourself have taken offense? Since you made this statement in post #17 of this thread, feel free to use posts #1-17 to show me what I missed. Thanks.

note: bold by redduck

 

[ivinsfan]

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?

-ERD50

I'd be on board with what you wrote except for the OP's use of the word leverage in regards to other funds he has at that bank.....in fact I would think throwing that word around wouldn't be helpful anyway.

 

[jazz4cash]

OK, maybe I am missing something here. Where do you see that others-- other than yourself have taken offense? Since you made this statement in post #17 of this thread, feel free to use posts #1-17 to show me what I missed. Thanks.

note: bold by redduck

I don't get this either. I don't equate a consumer attempting to exercise "leverage" as a threat in any way, shape, or form. Merchants frequently make accommodations for valued customers. Some customers get results by making a ruckus but I prefer to ask courteously and remind the other party how it benefits both of us.

 

[ERD50]

I'd be on board with what you wrote except for the OP's use of the word leverage in regards to other funds he has at that bank.....in fact I would think throwing that word around wouldn't be helpful anyway.

Yes, I updated that in some later posts after re-reading the OP, which did add some 'color' to the conversation.

When I made the response you quoted, I was responding directly to those posts that I quoted, I hadn't gone back and re-read the OP.

When you look at those posts, they equate asking (OK, 'threatening') to renegotiate with an outright changing the terms on the other party w/o recourse. Of course, the OP has no way to change anything w/o the CU agreeing to it.

-ERD50

 

[ivinsfan]

I guess it was the word leverage. simply telling the bank I do a lot of business here and am a good customer is just a statement of fact and somehow leverage has a negative bullying connotation.

FWIW I was curious and looked at Websters online and the use of leverage is actually completely acceptable and I withdraw my comment that it might be taken the wrong way.

 

[rothlev]

in a similar in some ways story - my daughter had accidentally left open a bank account with B of A, she got married , opened an account with her husband and basically forgot about the small amount of money . Month after month Bof A started unknown to her was charging account fees. Slowly the account was emptied. when she realized her error she tried to call the bank to get some of the fees waived. They refused. Then I called wrote, raised some noise, My daughter may have a small amount of money with you, but I have a large sum. Negotiate the fees or lose me. They changed their mind.

It is a business transaction. Ethics have nothing to do with it.

 

[Ready]

OK, maybe I am missing something here. Where do you see that others-- other than yourself have taken offense? Since you made this statement in post #17 of this thread, feel free to use posts #1-17 to show me what I missed. Thanks.

note: bold by redduck

I interpreted the poster's comments to reflect that they see the CD as "handshake agreement" to keep their money at the bank for five years, and withdrawing the money early is somehow backing out of the agreement. Perhaps in the old days when banks were highly personal this way of thinking was relevant. I don't personally see it that way in today's environment, but I suppose it's possible that others may still see it like this. Even still, I find it odd to bring up morals and ethics in any component of this thread. But we have people with very diverse backgrounds and ways of thinking in this forum who are not always going to think alike.

 

[redduck]

... when she realized her error she tried to call the bank to get some of the fees waived. They refused. Then I called wrote, raised some noise, My daughter may have a small amount of money with you, but I have a large sum. Negotiate the fees or lose me. They changed their mind.

It is a business transaction. Ethics have nothing to do with it.

It's probably enough just to say: "My daughter got hit with some fees and we were hoping to get them waived. I'd appreciate it if you could look into this. By the way, I also have an account with you." No need to say a "large sum"--they are checking it out as you are talking to them.

 

[haha]

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.

I sincerely hope you are kidding. When is the last time a bank or any corporation did anything because they were worried about being a stand-up person?

Ha

 

[rothlev]

It's probably enough just to say: "My daughter got hit with some fees and we were hoping to get them waived. I'd appreciate it if you could look into this. By the way, I also have an account with you." No need to say a "large sum"--they are checking it out as you are talking to them.

You are correct. And I was polite. And they changed their mind BECAUSE I had some leverage . Business, just like the OP, if they want his business they may try to work with him.

 

[haha]

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...

If op holds a gun, then he is demanding. If he asks to be accommodated, which incidentally is what he is doing, he is asking. Anyone, even your wife talking to you on the pillow, knows that all requests carry some element of power. Life is in part a process of discovering the aspects of and the limits of that power.

Ha

 

[OldShooter]

... No need to say a "large sum"--they are checking it out as you are talking to them.

Well, and recognize that anything below middle-seven figures will probably not be considered to be a "large sum" if it is in CDs or other low profit products. A brokerage account that trades might be considered valuable at $1M. A seasoned and safe commercial loan customer might draw some respect at $500K.

Profitable brokerage customers are not easy to get. Safe and profitable loan customers are not easy to get. Retail customers who buy CDs can be had easily all day long. I had a friend who owned a bank and he was talking about deposits one day, said he could have all the money he wanted in one or two days by posting a quarter point higher rate than the others in the daily newspaper's CD yield tables. Sometimes, just by posting a rate that was the same as the current highest one.

 

[rothlev]

Well, and recognize that anything below middle-seven figures will probably not be considered to be a "large sum" if it is in CDs or other low profit products. A brokerage account that trades might be considered valuable at $1M. A seasoned and safe commercial loan customer might draw some respect at $500K.

Profitable brokerage customers are not easy to get. Safe and profitable loan customers are not easy to get. Retail customers who buy CDs can be had easily all day long. I had a friend who owned a bank and he was talking about deposits one day, said he could have all the money he wanted in one or two days by posting a quarter point higher rate than the others in the daily newspaper's CD yield tables. Sometimes, just by posting a rate that was the same as the current highest one.

I only had savings and checking accounts, but I kept a lot of money in those. And evidently it was enough to change their mind. I did not use the term" large sum", but I did tell them my name, and my account numbers so they could look it up. I did tell them that they could lose my accounts. and it worked ! they would do nothing for my daughter.