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Free Mercedes with that bank account

A Florida bank is offering a Mercedes in exchange for a $1 million 5-year certificate of deposit.

By MSN Money Partner May 3, 2012 10:52AM

This post comes from Kelli B. Grant at partner site SmartMoney.


SmartMoney on MSN MoneyConsumers in the market for a new bank account have gotten used to three-figure bonuses. Now, one bank is dangling a $60,000 car -- if you have a spare $1 million to stash away.


Image: Money (© Image Source Pink/SuperStock)A new offer from C1 Bank, a Florida community bank with assets of $827 million, promises new customers their choice of one of four new Mercedeses in exchange for depositing $1 million in a five-year certificate of deposit. "We've had lots of questions about it," says chief executive Trevor Burgess. "Nobody has taken us up on it yet, but we're only on Day Two."


It's not all that unusual for banks to offer big-ticket freebies in exchange for a hefty deposit. As we reported last year, Chase offered New York City customers who deposited $100,000 a bonus of two free front-row tickets for a sports match, musical or concert. That was worth as much as $1,000, the equivalent of a 2% rate. (Post continues below.)

"Typically, these kinds of schemes are about competition, getting customers and cash," says Dennis Moroney, a director of research at consulting firm Tower Group. He says the publicity value is likely higher than any real need for big-ticket deposits. "People who have a $1 million to put away for five years . . . probably already have a Mercedes or two," he says. (How much vehicle can you afford? Try MSN Money's calculator.)


But the C1 offer has one big catch. It's not actually a bonus, but rather prepaid interest on the 1.2% account, Burgess says. Consumers get what amounts to a $61,294.04 car (including tax, delivery and registration) instead of five years of interest, worth $60,000, reports Business Insider. "It's about instant gratification," says Burgess. Accountholders who withdraw funds early will get the balance less the cost of the car.

Of course, if you're in favor of deferred gratification, there may be more competitive rates. lists 18 financial institutions offering higher rates on a five-year jumbo CD, with annual percentage yields of up to 1.8%. Five years is also a long time to lock in -- although the Fed has said rates are likely to stay low until at least the end of 2014, they will certainly go higher than they are now, Moroney says.


At the same time, the car's value will be depreciating. (Burgess says the rate is competitive, and has the advantage of keeping the money in the community to benefit local businesses and residents.)


More on SmartMoney and MSN Money:

May 3, 2012 3:55PM
Nobody is going to take their money out of the Caymens just to get a car. Plus pay income tax on the car.
May 3, 2012 11:21PM
I only have 200 can you throw in a Prius??
May 3, 2012 4:21PM
May 3, 2012 4:57PM
people who have 1 million dollars liquid, to invest... DONT INVEST IN CDS THAT PAY LESS THAN AVERAGE INFLATION!  1.6%??? and then pay taxes on that as well??? thats terrible.  you might actually lose money. not to mention a car, depreciating asset in itself.  SUK_1123 agree completely, dumbest promotion ever.  at least give them a toaster, that they can use...makes you wonder who they suckered out of their first 830 million base????
May 3, 2012 5:33PM
Lets see $270,000 over 5 years in 5% tax free muni bonds or 1.2% taxed at 35% given to me in the form of a depreciating asset.
May 3, 2012 8:09PM
Mercedes isn't free than - it is interest earned.
May 3, 2012 6:00PM
That adds about 1% to the payout on the CD, which ties your money up for 5 yrs...and you probably have to pay taxes on the car as a gift, so no wonder no one has taken them up on it!
May 4, 2012 12:09PM

This is downright stupid.  Anyone that has 1M in the bank should know a thing or two about investing.  Even in today's economy, you can get around 10% a year, if you invest well(amounting to over $100K/year).   This grows over time as you make more money.


So why on earth would you opt for a $60K asset that's essentially 6% ROI over 5 years???  That's 1.2% - disgustingly poor performance.   Not to mention this "asset" also DEPRECIATES incredibly fast. By the time your 5-year CD is done, this car is worth next to nothing.


Probably explains why the CEO said " "Nobody has taken us up on it yet..."

May 3, 2012 5:11PM
George DumberU messed up this whole country. The elementary school nicknames for Obama are played out.
May 4, 2012 10:53AM
I like how they call it a FREE Mercedes.  It isn't free because essentially you are paying for it.  You are given a Mercedes in place of the interest you would have earned in the 5 years.  Nobody jumped on the offer yet because it is total bull and people are smarter than that, hopefully.  Plus, you would be getting less than 60,000 because everyone knows a new car loses 1/4 of its value once you drive it off the lot.  So technically, if you take the car, you're only getting 45,000, which is less than you would have been getting with the interest.  How about you just give me the 60,000, instead of the car, then I can reinvest that and make more money.
May 4, 2012 2:34PM

1.19688% APY on a million dollar, five-year CD? Calling all rubes!


Many, many community credit unions will offer you, on that principal for that term, an APY of between 1.85% and 2.05%. You can still keep the money in your community and at the same time almost double your vig by dealing with a credit union instead of a bank.

May 3, 2012 11:25PM
Your tax bill will be 30% on that car.
May 4, 2012 12:10PM
No thanks, this guy is the best:

"Maurice L. Nissim, CIMA®
Senior Vice President - Investments
Advisory and Brokerage Services

Maurice manages the wealth of individuals with a net worth between 5 and 75 million dollars, and has done so since 1988. He is a CIMA designate and one of Barron's Top 1000  Advisors. He is also one of a select few managers for UBS Senior Portfolio Program. This allows him to invest and manage portfolios on a discretionary basis. Through careful assessment, solid planning, and an individually tailored strategy, Mo addresses the unique issues his clients face as they progress toward their goals."
May 6, 2012 8:29PM
May 4, 2012 1:37PM
If I had won recent lottery and had to put money somewhere - I would put some here. 
May 4, 2012 10:44AM
Different Banks during the 70"s offered a free toaster if you deposited one hundred thousand on cd, same thing.
May 4, 2012 10:39AM

Elmo, do you even know what a CD is, or are you always that paranoid?


This is just a publicity stunt, apparently one that worked.

May 3, 2012 9:01PM
I agree with HANKS, the FED needs somebody in the White House they can control.
Until that time the markets are going to be so unpredictable due to a free market. Once the FED has full control over the government again those of us with money will know where to invest our millions again. Look at how well the US economy was going right up until Bush had to leave office, if we would have voted the Republicans back into office in 2008 the US would be the strongest country in the world by now.
Okay, how many of you are laughing?

May 3, 2012 11:37PM

$1M with a 5% return on a investment for one year would give you $50k in 5 years $250k.

and you think a $60k car plus the taxes you would have to pay. Is a deal.

I wouldn't do that if I were you ... just buy it off the interest in a year and technically it would still cost far more than that just because Nothing is free as you are all learning thanks to Bush we all suck now Eye-rolling
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