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Subject:  Re: Ameritrade CDs Date:  7/23/2013  7:23 PM
Author:  aj485 Number:  35043 of 36318

The CDs were at 3.5 and 3.6% with 3 years until maturity. After the offer was made, I figured that holding on to the CDs would only yield an additional 2.4% (3.6% - 1.2% premium I got for selling).

Well, you don't say what the rates on 3 year CDs were at the time that you traded them in, but if they were anything close to current rates, 3 year CD rates were, at best, in the 1.4% range (according to Bankrate and FatWallet).

After paying you 102.4% of face value, Fidelity could have sold the CDs to someone at 105% of face value, and the buyer still would have netted a little over 1.9% APY (0.5% above the best currently available rates) and Fidelity would have been able to keep the extra 2.6% of the face value, plus commissions. If Fidelity was able to sell at 106% of face value, keeping 3.6% of the face value (plus commissions), the buyer still would have received about a 1.6% APY - still better than the current 1.4%.

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