Flushing Savings Bank owns iGObanking.com and 
GiftsforBanking.com.
Both sites offer CDs but is it better to choose a higher yield or a gift?
To decide this, I will compare the dollar amount of interest you would earn by choosing to not get a gift with the retail value of a sample of gifts.
2 Year CD Minimum Deposit of $5000 to Get Gift
CD rate at iGObanking.com (no gift): 1.25% APY
CD rate at GiftsforBanking.com (gift): 1.00% APY
Amount of interest lost on a $5k deposit over 2 years: $25
Gift Sample 1: AMEX dinner & movie gift card – Value: $100
Gift Sample 2: CallawayGolf.com gift card – Value: $100
Gift Sample 3: Chicago Cutlery 12-Piece Knife set – Value: $64.92
So if any of the gifts interest you, they definitely have a greater value than the $25 worth of interest you give up.
You should also compare the value of the gifts to the amount of interest you would lose out on if you had a CD at Melrose Credit Union. As of this writing Melrose Credit Union is offering the highest rates on CDs in the nation. What makes their CDs even more attractive is the option to avoid taxes by choosing their IRA CDs.
For example if you open a 2 year CD with Melrose CU you will earn 1.65% APY versus the 1.00% APY at GiftsforBanking.com. Over 2 years you will make $65 more in interest. This is almost exactly the value of the Chicago Cutlery Set.
3 Year CD minimum deposit of $5,000
CD rate at iGObanking.com (no gift): 1.25% APY
CD rate at GiftsforBanking.com (gift): 1.00% APY
Amount of interest lost on a $5k deposit over 3 years: $38
Gift Sample 1: Flip UltraHD – Value: $140
Gift Sample 2: Schwinn 26" Women's 7-Spd Cruiser – Value: $179
Gift Sample 3: Mongoose 26" Men's Montana Bike – Value: $129
Overall, it doesn’t seem like the gifts for the 3 year CD are more valuable than the 2 year CD. Also, the interest lost/gift value ratio is less than the 2 year CD options.
5 Year CD minimum deposit of $5,000
CD rate at iGObanking.com (no gift): 2.00% APY
CD rate at GiftsforBanking.com (gift): 1.75% APY
Amount of interest lost on a $5k deposit over 5 years: $63
Gift Sample 1: Samsung 32" LCD HDTV – Value: $347.00
Gift Sample 2: Garmin eTrex HCx GPS – Value: $209.15
Gift Sample 3: Schwinn 20” Folding Cruiser Bike – Value: $189
Depending on what gift you choose (like the HDTV), you can get 5.5 times the value over going with the extra .25% APY.
Now I’m going to skip to the highest deposit just to give you an idea of the types of gifts and their value.
2 Year CD minimum deposit of $100,000
CD rate at iGObanking.com (no gift): 1.25% APY
CD rate at GiftsforBanking.com (gift): 1.00% APY
Amount of interest lost on a $100k deposit over 2 years: $501
Gift Sample 1: Maytag Perf. Series Washer/Dryer – Value: $1849.00
Gift Sample 2: Broil King Imperial XL Grill – Value: $1388.74
Gift Sample 3: Canon® EOS 7D EFS 18-135 kit – Value: $1659.00
When you choose the Maytag Performance Series Washer/Dryer Set you are getting 3.7 times the value when compared to the $501 of interest gained by choosing the 0.25% extra interest.
5 Year CD minimum deposit of $100,000
CD rate at iGObanking.com (no gift): 2.00% APY
CD rate at GiftsforBanking.com (gift): 1.75% APY
Amount of interest lost on a $100k deposit over 5 years: $1,258
Gift Sample 1: CANON REALiS SX7 LCOS Projector– Value: $3657.12
Gift Sample 2: Samsung 65” HDTV – Value: $3,299
Gift Sample 3: Crosley CR12-Di Jukebox – Value: $2468
Let’s compare the best gift (the Canon Projector) to the amount of interest you could earn if you deposited $100k in a CD at Melrose Credit Union for 5 years:
Interest Earned on 1.75% APY: $9,123 + $3,657 gift = $12,780
Interest Earned on 2.93% APY at Melrose CU: $15,543
This means a net gain of $2763 by putting your money in the Melrose Credit Union CD not including taxes.
Conclusion
All of the calculations above assume no taxes and monthly or quarterly compounding of interest. They are illustrative figures and aren’t exact.
There are many gifts and deposit amounts in between the options I show above. You can see the process you must use to decide if the particular CD is best purchased to get a gift or to earn pure interest. Make sure to take into account taxes on interest earnings and whether you need income more than gifts.
Visit GiftsforBanking.com and melrosecu.org to see the offers mentioned.
Don’t forget to check the latest CD rates before you make a decision.
