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CD perk pays charity of your choice

By Claes Bell, CFA · Bankrate.com
Monday, July 30, 2012
Posted: 5 pm ET

It's not a Mercedes-Benz roadster, but one bank offers a unique perk for CD investors: a built-in donation to the charity of your choice.

Through its ableBanking division, Northeast Bank offers a range of CDs that donate $25, plus an annual donation of 0.25 percent of up to $240,000 of your principal, to a charity you choose.

The annual donation also has the additional benefit of being tax-deductible, so you can save a little bit at tax time. (See update below)

I'm not generally a huge fan of gimmicky rewards for deposit products (give me a higher yield and keep the toaster), but in this case, the yields seem competitive. According to the bank's website, it's paying 1 percent on a one-year CD, not including the 25 basis-point charitable contribution. While it's not as high as the best rate on our CD rate database, it's well above Bankrate's national average of 0.31 percent.

Northeast Bank also seems like a fairly sound institution, with a three-star rating from Bankrate's Safe & Sound Star Ratings.

What do you think? Is this a good deal? Is a charitable donation the kind of perk that moves your money?

Follow me on Twitter: @ClaesBell.

Update: After speaking with ableBanking's digital marketing department and doing a more careful reading of the bank's online FAQ, it turns out that the annual contributions are not tax deductible after all. The only tax deductible contributions are ones you elect to make through an ableBanking money market account.

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