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High CD rates could be a scam

By Sheyna Steiner ·
Monday, June 2, 2014
Posted: 11 am ET

© Im Perfect Lazybones/Shutterstock.comLegitimate royalty, deposed leaders and grieving heiresses will never email you looking for ways to launder millions of dollars. Similarly, global banking leaders will not email you with a spoofed email address to offer you a once-in-a-lifetime certificate of deposit.

Savers beware

Last week the Financial Industry Regulatory Authority, or FINRA, issued a warning to savers about CD rates that seem too good to be true.

Savers on the receiving end of promotions touting high-yield CDs should be wary, according to FINRA. Like many scams these days, CD scams show up in email messages or phone calls. Hapless recipients see an email purporting to have originated at a big bank show up in their email box, blaring messages about impossibly high CD rates.

First rule of personal finance

If something sounds too good to be true, it probably is.

FINRA recommends that investors keep an eye out for these red flags.

  • Interest rates that are significantly higher than average.
  •  Emails with addresses that are not originated and sent by the financial institution that is cited in the promotion.
  •  Emails that contain misspellings or grammatical errors.
  •  Promotions that claim to be from a U.S. financial institution that has aligned with an international bank.
  •  Promotions that claim to be for a "limited time only."
  •  Promotions that claim to be directed at "best customers" and that require extremely high minimum investments (for example, $100,000).

But how can I be sure?

If you get an email or a phone call from a bank, don't respond. If it piques your curiosity, call the bank directly at the official customer service number -– not the number listed by the sender or caller.

Hover over links in emails to verify that they do lead back to the bank. The usually don't.

Senior citizens can be a prime target of phishing and other types of scams.

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Follow me on Twitter: @SheynaSteiner.

Senior investing reporter Sheyna Steiner is a co-author of "Future Millionaires' Guidebook," an e-book written by Bankrate editors and reporters. It's available at all the major e-book retailers.

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