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Author: aj485 Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 24253  
Subject: Re: Premier Notes Date: 5/10/2012 12:16 PM
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This is a vehicle by Duke Energy. It's really a means to invest in their debt. The ad in the local paper touts 1.61% APY. Since its a debt investment, it is not FDIC insured. But, it's an account with a lot of bank account similarities including free check writing above $250 and electronic transfers. Minimum balance is $1000 and no writing checks at the Walmart checkout to buy groceries. But, I suspect anyone interested in this would be looking for a place to store cash and receive a decent rate by today's standards.

This looks to me like a lawsuit waiting to happen.

Anyone remember the Auction Rate Securities debacle? Auction rate securies were marketed as a 'safe and liquid' place to earn a higher rate on your money, as you could always get your money back out at the next auction (generally 7 days) if you needed it. And it worked, until it didn't.

And money market funds that broke the buck?

Both generated lots of lawsuits.

Disclose all you want, if it's being marketed as a liquid account that checks can be written on, people are not going to accept it if there is EVER a loss, so there will be lawsuits if that occurs.

AJ
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