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marigold3 · Jul 31, 2006, 02:22 PM

I have a step up CD with 5-1/2% interest rate, but the price is going down. I bought at $1 and it is now 92 cents. How can this be and is it likely to be called?

Fr_Chuck · Jul 31, 2006, 05:20 PM

You CD must be based on certain investment spreads, while for a 3 year average my investments do about 12 percent I did much better last year. But for the last 3 month I have lost on all of mine. So many of the investment funds have been seriously going down or not having any profit over this last few months.

And of course with any futures type investment a margin call is always possible. I am not sure what safety net they have or see this as only a short term issue. But you should always have the cash on hand to pay any margin call when it happens.

** I lost everything in Gold in the 80's, when the futures fell about 1/3 in a week.

I foresee the current fall to continue to the Congressional elections at least. So it is iffy right now. Of course I have no idea what funds or investments your CD is based on.

marigold3 · Aug 1, 2006, 05:16 AM

This is not a margin account. It is a 25 year CD with Hapoalim Bank of NY that makes community service loans to corporations, sort of like Federal Home Loan Bank.