Low CD rate annoys saver

Don Taylorq_v2.gifDear Dr. Don,
I recently had a $200,000 CD lapse by not contacting my bank, so it was automatically reissued for one year at a CD rate of 2 percent. Do I have an appeal option?

First, we did not receive anything telling us it was due. It's my fault, I should have known. But at the time I was with my wife in an air ambulance, on the way to Cleveland Clinic, where she would have open heart surgery. When I returned home about 30 days later, the bank would not hear my appeal. Do I have a right to appeal their decision? I would not care if they gave me the going rate at the time of renewal.
-- Patrick Priorities

a_v2.gifDear Patrick,
I hope your wife is recovering nicely and back home with you. I can understand how she would be your first priority versus a maturing CD.

While I haven't read the specific terms of your CD, it's clear from the terms on your bank's Web site that CD renewals are automatic at maturity (although there is a 10-day grace period when the CD is renewed) at prevailing rates. I'd be surprised if that wasn't the case for your CD.

It's unfortunate that your bank wasn't willing to listen to your circumstances and bend its rules to let you redeem the matured CD. Now, it appears you have to choose between keeping the money invested until the end of the current renewal term, or redeeming the CD early and paying the early withdrawal penalty.

If it's any consolation, the 2 percent rate is competitive for a one-year CD. Bankrate currently reports a 2 percent annual percentage yield as the highest yielding one-year CD available nationwide.

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