A CD at 0.32%!

Bill Regardie Founder, Regardie's Magazine
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I hadn’t given much thought about inflation until this morning, when I saw a long line trying to get into my neighborhood branch of US Gotcha Bank. Fortunately, I had a preferred Gold Card so I was able to get in the side door and reach Happy Harry Hathaway in only 15 minutes. Harry had been made branch vice president in only six months. He gave me a smile, a cup of Starbucks and one of those big bank chairs to rest my butt.

“So, Frank, what’s cooking this morning?” he asked.

I had just been in the previous week to refinance my home. He’d given me a lower rate and a 50-inch plasma TV.

I asked why all those people were lined out the door.

“Frank, we’ve raised our rate on our jumbo six-month CD a full basis point from 0.31% to 0.32%. For a year, I can get you 0.50% because you’re a Gold Card customer.”

“Harry, how much do I need for a jumbo rate?”

“It’s normally $100,000 but, for you, I can do $95,000.”

I thought he was out of his mind. A third of a percent interest on a hundred grand seemed like chicken feed and I told him so.

“Harry, inflation is six or seven times that much.”

By the look on his face, I thought he was going to throw me out of his bank.

“The old days are over,” he said. “I can get you 1.75%, but that’s for five years. Frankly, we’re carrying some dog commercial loans from five years ago we need to make up for.”

“Harry, I can buy municipal bonds for 3 to 4%. Why should I take a one-third of a percent for your CD.”

“Simple, Frank. Wisconsin, Ohio and the rest of the country are more volatile than Libya. Those municipal unions are crazy. You could put your money into the stock market but who know where anything is going with $100 barrel oil. With us, your money is 100% Uncle Sam safe. The stock market goes up and down like a yo-yo, but your $100,000 CD at US Gotcha Bank is safe as gold, which, by the way, I don’t recommend.”

I never realized just how good Harry was until I realized that he had been filling out the jumbo CD paperwork. Then he slid it across the desk to me.

I was still thinking about that deadly yo-yo when I signed; secure now that my family was safe at 0.32%

“Thanks, Frank,” he said. “I’ll just draw the funds and secure them with a second trust on your home. This way, your net out of pocket is only $5.35 a month.”

“Thanks, Harry.” I walked out with my copy of the CD, which, incredibly, had my name spelled right. He even gave me a smart phone.

No wonder he was a VP at 30.

Bill Regardie is the founder of Regardie Magazine.