Bank Offers Gadgets Instead of Interest on CDs

Peter spotted this ad while making a deposit at a Central Pacific Bank in Hawaii. The idea of opening a certificate of deposit without getting interest seems fairly sketchy, but if you really dig Sony products and don’t want to pay for them with the massive amount of money you’re depositing, maybe a deal like this would work out for you.

Would you accept a trinket in lieu of interest from a bank CD?

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  1. hypnotik_jello says:

    Cool, so your principal depreciates, and you get some crap which quickly depreciates in value. A win win.

    • oblivious87 says:

      I hate people with this opinion. The Dollar might be losing its value, but until you’re spending ever cent you make, you’re just as guilty as the rest of us. The Dollar might be losing its value in the sense that it can’t buy as many Euros or as much Gold, but as far as its buying power here, we still don’t have much of a problem.

      Complain when the cost of a loaf of bread increases, not when you can’t buy as many useless souvenirs on your next trip to Europe or Asia!

    • eyesack is the boss of the DEFAMATION ZONE says:

      We’re in deflation right now. The dollar is only depreciating in value if you plan on spending it outside of the US. If you want to make money (well, wealth), you can literally store your cash in a coffee can at this point.

  2. johnbc5 says:

    I would rather have interest if I put 100K in to a CD for 12 months than a TV

  3. tbiscuit360 says:

    I think it comes out to a better deal. The interest rate at fidelity for a 12 month CD is .65% (sooo disgusting). If you take the 52 inch TV, you are actually saving because it would yield only $650 in interest.

  4. Terek Kincaid says:

    It depends quite a bit on whether you get the trinket when you deposit or after the year is up. Getting last year’s toy isn’t much incentive when they all drop in price (you seriously thing the PSP Go is going to stay at $250 for very long?).

    • ben says:

      You can see the full ad here: http://www.centralpacificbank.com/content/promo/sony.htm

      “If Sony merchandise is chosen, bonus will be provided at account opening, or coupon will be issued at time of opening that may be redeemed at Expediters Hawaii.”

      • Terek Kincaid says:

        Ya, that makes it a bit better. I noticed their going rate on 1 year CDs is 1.6%, so everything is somewhat of a bargain except for the TV, oddly enough, which you can get for about $1300 (instead of the $1600 cash you’d get from the interest). I assume you’d save on the sales tax, which seems to be 4.166% in Hawaii, but you have to claim the value of the TV under interest earned on your 1040.

        So, do you put down the value of the TV when you got it, or when it’s tax time a year later? :P

  5. yantelope says:

    So if the PSP Go costs $250 and you’re using $15,000 for your CD then your interest rate is 1.6% Sounds pretty crappy to me.

  6. Nighthawk Foo says:

    My credit union is offering 1.65% on a 12 month CD, and 1.85% for $100,000. That’s a better deal than a TV.

    • Hoss says:

      Not to all people. If you got $100,000 that you want to store safely, in this economic environment it’s the insurance that is more valuable than one percent return. Why not enjoy your small return right now instead of getting a small interest payment each month? I’d do it (assuming $100G fell out of the sky today)

  7. yantelope says:

    Interest Rates on CD’s right now are so bad you’re better off not even bothering since they don’t even keep up with inflation. I’ll stay in the market thank you very much.

  8. Talisker says:

    If you have $100000 to put into a CD for a year, wouldn’t you be better off just buying the TV and buying bonds or something with the $98000 that you have left over?

  9. MBirchmeier says:

    PSP retail price $229, so slightly better than a 1% rate of return. Right now, that same bank is offering 1.6% on a 12-month CD.

    If I had 15k, I could buy a psp, put the rest into a CD, *with the same bank* and come out ~$5 ahead with a normal CD.

    So in short, no.

    -MBirchmeier

    Reference links:
    http://www.centralpacificbank.com/content/personalbanking/savings/DepositRateTable.asp
    http://www.google.com/products?q=sony+psp+go&hl=en&aq=f

    • MBirchmeier says:

      FYI: other banks offer a higher CD rate currently. Ally bank’s offering 1.87 on a 1 yr. No minimum CD, so going with someone else yields an even better (worse?) deal.

      -MBirchmeier

  10. Rectilinear Propagation says:

    Anyone making enough money for those minimums already either owns all that stuff or they don’t want it.

  11. iamlost26 says:

    While everyone’s points are valid, remember that this an instant gift. It’s like putting money in a CD and getting all of the interest before day one of the 12 months goes by.

    That being said, it’s probably only a good idea only if you were going to buy the item in the first place.

  12. iamlost26 says:

    While everyone’s points are valid, remember that this an instant gift. It’s like putting money in a CD and getting all of the interest before day one of the 12 months goes by.

    That being said, it’s probably only a good idea only if you were going to buy the item in the first place.

  13. hypnotik_jello says:

    They should be giving away a 2-litre bottle of Coke with that to sweeten the deal!

  14. AllanG54 says:

    Years ago I did this. The bank I went to gave a color tv (when they were still around $400) and a lesser rate of interest. I still made money and didn’t have to shell out for the tv but I did have to tie up my dough for four years. It was only $2500 though.

  15. UCLAri: Allergy Sufferer says:

    Why not just put some money into TIPS instead? At least then you’ll have SOME hope of getting the money back…

    http://www.treasurydirect.gov/indiv/research/indepth/tips/res_tips_rates.htm

  16. joshuadavis says:

    If I got the gadget in advance, then maybe I’d consider. However if they promise todays hot gadget, but that I’ll get it after 2 years, then no thanks.

  17. MJ Dick says:

    heck, when you do the math versus the cost comparison, that’s not far from off, and beats some of the rates I have been looking at. but I’m trying to keep liquid, and this wouldn’t really fit my grand scheme, but would have been nice if I wasn’t farming my CDs now.

  18. howie_in_az says:

    This idea is great! I just mailed a plasma TV to my mortgage company for my December mortgage payment. The joke’s on them, however, as I got it on Black Friday!

  19. oblivious87 says:

    Ally is offering 1.83% interest on a 1 YR CD. $100,000 CD would net you just over $1800 in interest. The Bravia TV is going for $1500 + tax at Best Buy and $20 less on Amazon. So in the end, its like getting 1.5% interest on your CD and you get the reward right now.

    If I was in the market for a new HDTV and had $100k, I’d consider this assuming it could be delivered before Christmas.

  20. Dont lump me into your 99%! says:

    The comment system is cranky. I had to view this page like 5 times to finally see the comments.

  21. dorianh49 says:

    I prefer rootkits with my CD’s, so this is perfect!

  22. SharpsKC says:

    It’s still taxable income. At what rate are you taxed? What the bank paid for it?, The best price you could have gotten online? Or the MSRP?, you know the sucker price ;)

  23. eyesack is the boss of the DEFAMATION ZONE says:

    This deal doesn’t sound bad considering how bad CD rates are right now. Money markets, which let you actually use your money, are higher in my city.

    However, deal does look much worse when you consider that we’re technically seeing deflation of 0.2% in the US right now (not sure how much of that is due to food and fuel price fluctuation, though). So, a rate that would nominally be 1.83% (as cited below) is worth 2.03% in real terms. The 1.5% that receiving a big-ass TV right now would be equivalent to is just bad.

    Aren’t people investing $100,000 going to do the math?

  24. AustinTXProgrammer says:

    I get 5% APR on my checking account on the first 25k. I think that will pay for the TV.

  25. HogwartsProfessor says:

    Where did all the comments go? I can’t see any on any articles. Aaah!

  26. tripnman says:

    For those calculating the “value” of receiving product in lieu of interest, keep in mind that earned interest is taxable. For those that are self-employed or in a high bracket, this becomes a better deal if you are actually in the market for one of these items.

  27. flyingember says:

    Not a chance

  28. 2 replies says:

    Would you accept a trinket in lieu of interest from a bank CD?
    (PSP GO=$240)
    (Sony Vaio=~$750)
    (52″Bravia=$1,300)

    Why not just buy the item then deposit the money in a CD WITH interest.
    After the year, you’ll have more money and won’t be stuck with a vastly depreciated piece of tech.

    (15,000-240)*1.05 = $15,498 + PSP GO
    (50,000-750)*1.05 = $51,712.5 + Vaio
    (100,000-1300)*1.05 = $103,635 + Bravia

  29. 2 replies says:

    I also like the “while supplies last” note…
    Does that mean that if they don’t have the gadgets, that they won’t deposit your money into the pointless CD? Or does it mean they’ll take your money for the year, refuse you any interest, and tell you “OOPSIE! We’re all out of the gadgets, sorry. Supplies didn’t last. ^_^ “

  30. HIcycles says:

    Man, that’s my bank. Why we gotta go there?

  31. XTC46 says:

    They do things like this frequently, but normally it is with interest also. I use to have a CPB account (it was my first bank when I was like 10ish) I use Bank of Hawaii now but still have an account with them I think.

  32. vastrightwing says:

    I expect this:
    Bank: Here’s your coupon good for a Sony TV.
    Customer: Thanks!
    Bank: you owe us $100 (reference to Airline miles) to redeem this coupon.
    Customer: What? I didn’t notice that in the fine print.
    Bank: yes, we added it yesterday, just before your CD came due.
    Customer at store: Hello, I want this TV on the coupon.
    Store: We don’t carry that model anymore. We have this newer one.
    Customer: But that model doesn’t have the same features and isn’t as good as the one on the coupon.
    Store: Sorry. That’s our policy. by the way, there will be a $100 fee to use the coupon.
    Customer: The coupon doesn’t show that anywhere.
    Store: That is on our website buried in 4 point type. See? There it is.
    Customer: No problem. I’ll alert all the readers at Consumerist.

  33. dannod says:

    Considering how awful bank interest rates are here in Hawaii, I’m surprised you even get the products. If you live in Hawaii it’s better to get an online savings account than bother with local products.

  34. roothorick says:

    While the execution is horrible, there’s something here. Think about it — put $150 in the bank, and in six months, a Wii pops out! People might actually go for that.

  35. dumblonde says:

    Well. The only way to know if it’s a bad deal is to compare other bank’s interest rates with the value of what they’re offering you. If you were going to deposit $100,000 at a rate of 2% APY you’d get $2,000 interest which is roughly how much a 52inch TV would cost you. If the comparable interest rate was 1% APY then maybe the TV is actually a good deal.
    Granted, I have no idea why you would want to open a CD to get a thing out of it that you can obviously already afford. Unless you’re really that interested in putting your money out of reach for a year and getting a free gadget. It makes very little sense unless everyone else’s interest rates are 1% or less and even then it’s a weird decision.