ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
We use two banks. The big bank waves fees at us for everything. The little bank waives fees for us for almost everything.
We use two banks. The big bank waves fees at us for everything. The little bank waives fees for us for almost everything.
OP should just realize THEY made a bad decision a live with the consequences, after all that's what people with morals do.
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.
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.
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...….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?
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 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?
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.
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
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'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.
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
... 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.
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?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 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.
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.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...
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.... 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.