Bank of America increases some CD early-withdrawal penalties by 1,700%

[Newsjock]

Source: Los Angeles Times

... The latest example comes from Bank of America, which has significantly toughened the penalty for early withdrawals from a certificate of deposit.

In the past, BofA would charge 90 days worth of interest for early withdrawals from a CD good for 12 months or less. In other words, a $10,000, 12-month CD with an annual yield of 0.3% would entail an early withdrawal penalty of about $7 if you took out the entire amount.

Now BofA is charging a flat $25 plus 1% of the amount withdrawn for CDs with terms under 12 months and 3% for longer terms.

That means the early withdrawal penalty for that same $10,000, 12-month CD now runs $125 — a nearly 1,700% increase. The penalty for a five-year, $10,000 CD is $325 — a roughly 1,600% increase.

Read more: http://www.latimes.com/business/la-fi-lazarus-20110506,0,3569984,full.column

[freshwest]

1. I found out that they will also be increasing credit card rates to 29.99% or more for any charges

Made after June 25th, no matter how good the payment record is.

Looks like that bought and paid for GOP victory in 2010 is paying off big time as they are undoing Obama's changes he put in place.

It's hard to imagine what impact this will make on the economy and the flow of credit for businesses and individuals as well.

I saw something here on DU a while back mentioning this but didn't pay it any mind and then came across this information helping someone out with their account there today.

So essentially this is going to be a worse credit crunch than before. When I suggested moving to another bank, the officer told my friend that they would all be doing it because of all the mortgage defaults.

Anyway, told my friend to pay if off if possible, if not, be prepared for that usurious rate.

[emilyg]

2. Mine is almost paid off. Good riddance.

[Sherman A1]

4. They may all be doing it or perhaps not,

like anything else there is some competition in this business, if BOA starts to lose money or market share they will move the rates down. It may not be back to what they were, but nevertheless they will move in the direction of what they think they can get away with. That said, I would pay off the damn thing, keep the account open and use it very sparingly, paying it off each month as you go.

[sakabatou]

3. Time to screw people again!