Don't be duped by a too-good-to-be-true offer
By Laura Bruce • Bankrate.com

Federal Savings, an online company we cautioned you about in an article last week, is back with a new Web site and a new Web address -- but a lower-yielding term certificate offer.

We felt it was worth letting you know that we had concerns about the previous offer because the original Web site advertisement looked like an offer for a high-yield certificate of deposit.

It had the letters FDIC in the lower right corner, which, while not the FDIC logo, could have fooled some consumers into thinking their money is government-insured if the company folds. In fact, the term certificate is not government-insured and the FDIC reference, while still on the home page, looks less like the government logo.

Once again, this Web site should, in our opinion, have the word "caution" stamped on it in big red letters. Is this a legitimate company where consumers could find a high-yield investment and see a better-than-average return? We don't know. It may well be, but there are just too many unanswered questions.

Federal Savings USA Web site

The latest offer is for 6.25 percent on a six-month term certificate, down from the 8.85 percent advertised when we first saw the Web site in mid-January, thanks to a reader's inquiry. Again, we've called the phone numbers listed on the Web site, left messages, and haven't received a response.

Federal Savings, as its tagline "the unbank" implies, is not a bank. You won't find a direct statement regarding that on the Web site as it stands today. That information is in a lengthy "hot line" message we reached at the phone number listed on the Web site for investors from outside the U.S. to call. More on the message later.

Personal information required
If not having FDIC coverage on your deposit doesn't worry you, how about putting your personal information -- Social Security number, driver's license, mother's maiden name, etc., on a Web site that does not appear to be secure? Click on the "Sign Up Now" button and you're sent to a page where you're required to fill in the information. The company wants you to print the application and send a check, so you might think you should be able to print the application and then fill it in. Unfortunately, it's a two-page application and you can't get to the second page until you fill in all the information on the first page online. Who knows what happens to the information when you click the "continue" button at the bottom of the first page? We don't.