CD At A Quick Glance:
- Maximum Bonus Amount: Free gift, details below
- APY: 1.85%
- Deposit Length: 24 months
- Minimum deposit required: $25,000
- Maximum deposit allowed: $250,000
- Hard pull: Unknown but unlikely for a CD
- Credit card funding: UnknownÂ
- Insurance:Â FDIC
The Offer
Giftsforbanking.com is FDIC insured and an online arm of Flushing Bank. Here’s a new CD offer from the bank:
- Get 1.85% APY on a 2-year CD
- Also get to choose from various free gift option, the greater the CD amount the larger the gift
- See gifts for $25,000 CD here (toggle between pages to see all options);Â one example is an Apple Watch along with $100 iTunes gift card
- See gifts for $50,000 CD here (toggle between pages to see all options); one example is $500 in Amazon gift cards and a Bose SoundTouch 30 Series III Wireless Music System
- See gifts for $100,000 CD here (toggle between pages to see all options); one example is a Macbook
As you’ll see from the list of gifts, these are substantial values, not knickknacks.
The Fine Print
- CDs auto-renew so be sure to withdraw the funds at the end of the 2 years if you don’t want that
- No monthly or opening fees
- Early withdrawal penalties will equal six months simple interest on the amount withdrawn subject to penalty. Plus the retail value of the gift received, applicable sales tax and shipping fees.
- You’ll have 12 months to claim your free gift
- 1099INT will be issued on the interest earnings and on the value of the gift
Our Verdict
From a quick look, it seems like the free gift is worth roughly 1% to 2% of the CD amount. The rate of the CD itself is on par with the best CD offers available, and this added gift could push the value up significantly. If you can get 2% out of the free gift, that would be an annualized 1% bonus on the CD rate, for a total APY rate of 2.85%.
An important thing to keep in mind is that the bank will issue a 1099 you for the value of the gift, so consider this added bonus like the earning on the CD itself which are 1099ed and taxable, not like an added bonus. If it’s an item you’d have been buying anyway, this can be a great deal. Otherwise, remember you’ll be paying a percentage of the cost of the item in the form of taxes.
CDs aren’t for everyone, especially a two-year CD which is a bit of a commitment given the hefty early withdrawal penalty (. If you’re in the market for one, this is something to consider. Check out other high-yield savings options in this post. Let us know if you think we should add CD deals over there.
Make sure you don’t sign up for anything but the two year CD as the rates drop significantly:
- 2 year @ 1.85% APY* plus gift
- 3 year @ 0.15% APY* plus gift
- 5 year @ 0.25% APY* plus gift
Hat tip to Depositaccounts
Link has been changed to: https://igobanking.com/our-products/giftsforbanking/
Link looks dead
Has anyone got a 1099INT from them for this tax season ? Just curious what or how much was the tax liability and the offer you received. Also just want to inform folks of a better offer with a 36 mon/3-yr CD @ 2.5% APY and the gift here is even better than what was previously post, especially on higher end tiers. For example, I looked into the Royal Crown Diamond Certificate for 2 on a 6-8day cruise, balcony state room with a value of $3770 per RCCL documentation for a $100,000 3-yr CD @ 2.5% which is quite competitive. Granted you are locked to a 3-yr, but if you are gonna invest in a 3-yr CD anyway, it’s a darn good package.
Has anyone completed an appeal or adjustment for the 1099-INT amount they listed for the free item? I’m curious how best to do that.
Right now, igobanking (per comments, this is the same company) has a 2 year cd ($1000 minimum) at 2.32% APR (2.35% APY)
Compared to the 1.85% APY+gift, this is a difference of 0.5% APY per year, or 1.02% over the course of the 2 year CD.
This works out to, if I’ve done the math correctly,
25k = $255
50k = $510
100k = $1021
So make sure you value your “substantial gift” at more than this amount. Otherwise you should get the higher rate CD.
I signed up for the $25k CD deal. The whole process was quick and painless and the gift arrived within a week of signing up for the account. We were sorta in the market for a new Vitamix so this actually worked out pretty well. I was expecting the current A3200 Vitamix, which is valued at $500. Turns out they gave me the A3500, which is going for $600+tax everywhere at the moment. Given that the Interest statement will show this as $575, we actually did pretty well. Sure, we’ll be paying taxes (high tax bracket mind you), but it’s still MUCH cheaper than what we’d pay for this in the store. Great find!
To answer my own question. Went to the Trek website. The cost is $1,699 (sorry I said $1,675) and shipping is free. So a dispute for $439 less would be fairly straightforward.
Sears sells the rider mower (actually 20hp vs 19hp) for $1,399 and $75 for shipping.
Moral of story – should be an easy dispute with the IRS.
By the way the bank is part of Flushing Bank – an FDIC insured institution established in 1929.
I found out that the bank’s ARV’s for $25K is $575, $50K – $1,100 and $100K – $2,250.
In the $100K category a Trek Bike is sold for $1,675, a Rider Lawn Mover is also $1,675 and I assume a pair of diamond earings is also about the same. So as far as the 1099-INT is concerned shipping and handling (less $136 sales tax) is $439 for any of the items. A bit pricy for a pair of earings, still quite high for a bike and maybe quite a deal for a 650 pound mower.
It’s possible that the $439 might effect your taxes quite a bit so that you would want to dispute the ARV.
How the heck would you do that not knowing anything about the banks shipping and handling charges.
Has anyone determined that this bank is legit?
I spoke with them and was told by one rep that Sept 19 is last day.
I’m wondering the same thing – has anyone actually opened a CD with Giftsforbanking and everything go well and can confirm it’s all legit?
I know it’s a crystal ball, but anyone think it’s worth doing the deal and locking in $25k for 2 years when interest rates are creeping up? Might be better to just wait it off, no?