People have interpreted the "at the current rate" language to mean at the rate of a CD of same maturity currently offered by SB. I thought that it could be interpreted as meaning the current rate of the CD you own; although the use of "current" seems unnecessary, I though maybe they included it to cover the case of a CD that had a rate bump option, which they don't offer now, but may offer in the future.Early Withdrawal Penalty - We will impose a penalty if you withdraw any of the deposited funds before the maturity date. The fee imposed will be equal to the following:
- For a CD with a term of 12 months or less, the penalty will be an amount equal to 90 days simple interest on the amount withdrawn at the current rate.
- For a CD with a term of more than 12 twelve months, the penalty will be an amount equal to 180 days simple interest on the amount withdrawn at the current rate.
To clear up the confusion, I sent a secure message asking for clarification. This is the relevant part of the answer I received:
I bolded the clarifying phrase, which indicates that my interpretation is correct, and that the rate of currently offered CDs is irrelevant.Synchrony Bank CSR wrote:For CDs with a term of more than 12 months, the penalty is 180 days of simple interest on the amount withdrawn at the current rate which is the rate your CD was established.
So a 5-year CD purchased at current APY of 2.25% will have an EWP of about 1.13%. Period.
Please share if you've received a different explanation from SB in writing.
I have sent a follow-up message asking why the word "current" is used at all, and suggested that they clean up the disclosure language to avoid the confusion.
Kevin