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Topics for Discussion Certificate of Deposit (CD’s) Historical CD Rates Bank Fees The Role of the Federal Reserve Reserve Requirements and Lending Inflation Taxation Options

CD’s What is a CD? – A certificate of deposit is a savings certificate that entitles the owner to receive interest. – CD’s bear a maturity date, have a specified fixed interest rate and can be issued in any denomination. – Durations range from one month to several years. – Issued by most commercial banks.

Historical Rates (CD’s from ) Footnote 1

Current CD Rates DurationBankRate 6 MonthAllied Bank.1% 1 YearDiscover Bank.35% 2 YearAlly Bank.5 3 YearGE Money Bank1.2% 5 YearDiscover Bank1.9% 7 YearDenver Savings Bank2.45% 10 Year Bond1.9% 30 Year Bond3.1%

CD - Time Deposits - Bank of America Less than $10,000 $10,000 - $24,999 $25,000 - $49,999 $50,000 - $99,999 $100,000 - $499,999 $500,000 and over TermRate/APY(%) † Days0.27/ Days0.28/ Months0.30/ Months0.35/ Months0.35/ Months0.40/ Months0.60/ Months0.85/ Months 1.10/ Months2.28/2.30 Minimum to Open: $15,000 Terms of 7 Days - 27 Days/$1,000 Terms of 28 Days - 10 Years. Footnote 2

Bank Fees Investment VehicleMinimum To InvestRate % Regular Savings AccountNo Minimum.05 Money Market SavingsNo Minimum.13 Growth Money Market Savings No Minimum.13 7 Month Term CD$10, Month Term IRA$2, Month Term CD$5, Month Term IRA$2, Month Term CD$10, Month Term IRA$2, Month Term CD$10, Month Term IRA$2,000.65

What is the Federal Reserve What is the Fed? – The Federal Reserve is a formal organization created to study and implement monetary policy

Federal Reserve “Although the federal funds rate is likely to remain exceptionally low for an extended period, as the expansion matures, the Federal Reserve will at some point need to begin to tighten money conditions to prevent the development of inflationary pressures.” – Ben S. Bernenke Footnote 3

Reserve Requirements and Lending Reserve requirements are the amount of funds that a depository institution must hold in reserve against specified deposit liabilities. Reserves must be held in the form of vault cash or deposits with Federal Reserve Banks.

Reserve Requirements Deposit LiabilitiesRequirement $0 to $11.5 million0% More than $11.5 million to $71.0 million3% More than $71.0 million10%

Lending Type of LoanRate New Auto Loan Average (New York, NY)5.8% Used Auto Loan Average (New York, NY)6.09% Subsidized Undergrad Stafford Loan3.4% Subsidized Graduate Stafford or Unsubsidized Loans 6.8% Parents and Direct PLUS Loans7.9% Average Credit Card APR14.9% Unsecured Credit Card Footnote 4

Lending Subsidized student loan interest used to be 6.8%. But when Democrats took over the House in 2007, they passed phased-in cheaper rates for subsidized student loans. The rates fell to a current low of 3.4% for subsidized Stafford student loans this past school year. The rates are scheduled to revert back to 6.8% for the school year. Footnote 5

Lending At a time when Americans owe more on student loans than on credit cards — student debt is topping $1 trillion for the first time — and the Occupy movement has highlighted the rising furor over spiraling student debt… Footnote 6

Inflation Inflation is the rate at which the general prices of goods and services rise. As it increases your purchasing power decreases. Example: If inflation is 2% a pack of gum that costs $1 will cost $1.02 in one year.

Inflation The inflation rate in the U.S. was reported at 2.7% in March 2012 YearInflation RateYearInflation Rate % % % % % % % % % % % % % % % % % % % %

Taxation Money markets and CD’s are taxable. Between taxation, inflation and bank fees you may be losing “buying power” keeping your money in a bank. You may consider the use of alternative means to stay ahead of inflation and reduce your tax burden Certain investments can be tax free.

2012 IRS Tax Brackets Tax BracketSingleMarried Filing JointlyHead of Household 10%$0 - $8,700$0 - $17,400$0 - $12,400 15%$8,701 - $35,350$17,401 - $70,700$12,401 - $47,350 25%$35,351 - $85,650$ $142,700$47,351 - $122,300 28%$85,651 - $178,650$142,701 - $217,450$122,301 - $198,050 33%$178,651 - $388,350$217,451 - $388,350$198,051 - $388,350 35%$388,350+

Options Mattress Ask questions of your banker Read a quarterly filing to see banks profits Talk to an investment adviser about municipal bonds

Footnotes "Bernanke Reaffirms 'Extended Period' of Low Rates", nytimes.com, February 24, loans.html, 5-"Obama pushes to keep low student loan rates", April 20, ” Student Loan Interest Rates Loom as Political Battle” political-battle.html?_r=1

Disclosure Securities offered through Cadaret, Grant & Co., Inc., member FINRA/SIPC. One Lincoln Center, Syracuse, NY Telephone number: Performance figures displayed herein represent past performance and are not predictive of future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares/units, when redeemed, may be worth more or less than the original cost. Investment securities are not FDIC-insured, nor are they deposits of, or guaranteed by, a bank or any other entity. The information has been gathered from sources believed to be reliable, however, Cadaret, Grant does not guarantee the accuracy or completeness of the information. The cost basis of securities positions is being provided by the account holder and neither the representative not Cadaret, Grant makes any representations as to the accuracy of such cost basis. The cost basis information provided is meant as a general guide and should not be relied upon as tax or legal advice.