Thread: Reverse APR CDs

Panama as you all know has been behind the invention of many things, among them pointless paperwork for the purpose of committing acts of terror against clients, legal system assistance in defrauding investors with no recourse, bi-monthly car permit renewals over 4 years to name a few.

One of the most interesting bank inventions here is what I call the "Reverse APR CD". Basically the way it works is the bank publishes a annual rate at 5 % for a 3/5-year CD. Then they simply do not capitalize the interest so you get 25 % after 5 years.

So you take x^5 = 1.25 and what do you get: 4.56 % APR.

Let's say you locked in at 7 % many years ago, then: 6.18 % APR.

Take a look at your SOLVENCY CDs folks and check if you have been taken for a ride or not (it applies if your selected to paid on expiration rather than annually).

So, having dealt with this situation myself. After about 30-40 emails and various threats and so on I managed to get the bank to reissue the the certificates. They never admitted that their rate was not an annual rate since they could claim they were just withholding the interest payments (interest free....).

It cost me more than it was worth of course, but being on the their case for weeks and have the
disgusting little branch manager hand over the new certificates after what was probably the worst few weeks in her life - PRICELESS!!!