by Structured Settlement Watchdog®
A Massachusetts company has mischaracterized a structured settlement receivables as a "CD Equivalent". It's total codswallop!
The actual tweet by the Plymouth Massachusetts company, at time of posting, was
"We have some great bank CD alternative #StructuredSettlement buys this week. Example: Keith has 9yr CD equivalent for $68k returning 4.65%".(emphasis added)"
What are the financial characteristics of Certificates of Deposit (CDs) ?
CDs are insured and thus virtually risk free. CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions.
They are different from savings accounts in that the CD has a specific, fixed term (often monthly, three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest.
On the other hand, Structured Settlement Receivables:
- Are NOT FDIC insured
- Are NOT insured by the National Credit Union Administration
- May not be sold to you by individuals or entities who are even registered to do business in your state.
- Do not have the same liquidity as a CD.
FURTHERMORE
-
Investors may not receive statutory consumer protection available to those who acquire structured settlement payment rights in the primary market
Leave a Reply