Med-Psych.com

I figured I could relay my experience with Countrywide bank. I had been looking for a place to park money for a year and I couldn't take the chance of losing principal as I will need this money next year. As I'm in a low enough tax bracket, I realized I was better off with a taxable option and decided to go with a certificate of deposit (CD). I did some looking around for 1 year CD rates and found that Countrywide Bank was amongst the highest with a 4.2% APY.

Actually, for a 12 month CD, they had the highest rate aside from Alliant Credit Union, but Alliant requires at least $25,000 to receive their rate of 4.4% APY. Rates obviously are pretty low everywhere, but this is still better than the current rate of most money market funds which are now under 3%. By comaprison, the rates on CD's at Citibank for 12 month terms are only 2% APY, and Bank of America is offering a 9 month CD at 2.4% APY.

After doing some research I saw that Countrywide has been in quite a bit of trouble with their mortgage department, and some people are concerned the bank may go belly-up. While I know this is possible, the CD's are FDIC insured up to $100,000 and so the reputable investment resources say that the money isn't at any real risk. Also, Bank of America has made an offer to buy out Countrywide Bank, which would likely prevent the bank's failure. It seems that if Countrywide would collapse, the FDIC would cover the account. I still hope that doesn't happen, but from people who have had money at banks that went under, they report the funds were seamlessly moved to another institution.

So, I go ahead and try to open an account online. I type in all of the information, initially thinking I'll fund the account from my Bank of America checking account. I realize that it would be easier if I move the funds directly from my Fidelity Brokerage account and so I change the information (or so I thought). Everything goes through as I would have expected. They say they will send two deposits of less than $1.00 to my account, which I then have to type the amounts in on the Countrywide Bank website to verify that I do indeed have access to the sending account.

The next day, I get an email saying to check my Bank of America account for the trial deposits. Of course, I thought I had changed the routing number to my Fidelity Bank account, but realized I must have not cleared out the Bank of America routing number. Not a good sign. So I call Countrywide and explain to them what happened. The guy was not the brightest sounding guy, and he kept putting me on hold to check to see what to do. He said I should go to the Countrywide online page and type in anything for the 2 test deposits and after three incorrect tries it will reset the account. I go ahead and type in two random numbers and I see the screen reset with "Thank you for validating your account" or something similar. I'm still on the phone with the rep and he had no idea what to say. I'm thinking - how in the world could I have guessed two random numbers between 1 and 100? The odds are 10000 to 1. Unfortunately I'm never that lucky at the lotto. He again puts me on hold and comes back and says he will go ahead and just cancel the account.

I asked him what my options are for opening a CD. He didn't have any suggestions. I asked what would happen if I go through the online process again, but this time make sure I have the correct account information entered as to where the funds will come from. He said I should be able to do that. So, I go ahead and set-up another online CD, but make sure I enter the correct information.

A few days later, I notice the two trial deposits in my Fidelity account - interestingly for the exact amounts I entered as random numbers the first time. I log back into the Countrywide website and there is no place for me to validate the account information on the new CD. The next day, I see the funds have been removed from my Fidelity account, but nothing is showing up on the Countrywide end. I call Countrywide a little concerned about where my money is at, and they said to give it a few days as it is probably in transit. I call Countrywide after a few days and they said that they see the money has been transferred, but it was being transferred into the first CD I had set-up - which is closed. He said that after a few days, the funds will go back to my Fidelity account as there is no destination account on Countrywide's end. I point out that there is a destination account and the funds should go there. I ask for a manager, and finally after about an hour on the phone, they figure out a way to move the funds into the proper place. The manager was actually very helpful and knowledgable, but it was more than frustrating that it took that long. Of course, I wasn't too upset since the initial error had been my fault.

All in all, it looks like I got a decent rate on a CD. Over the past few days, though, it looks like Bank of America is being encouraged to walk away from their buyout of Countrywide, which means Countrywide would be much more likely to fail. They are FDIC insured, and I am below the insured limit, so if they do fail, I just hope it isn't too painful of a transition.