Open a CD, get a free iPad2 & more

Free iPad 2 Image from Mashable.com

If you didn't get the gift you wanted this holiday season, iGoBanking.com may have just the ticket. Just open a CD for some free gifts. Giftsforbanking.com, powered by iGoBanking.com, gives you a selection of gifts based on the amounts and length of the CD you open. I discovered it on the best single web site to find great CD rates - DepositAccounts.com.

For example, if you open a five-year CD between $25,000 and $49,999.99, paying 1.25 percent APY, you can get:

-- Apple 64GB iPad 2

-- Brooklyn 2-in-1 iPad Backpack

-- iHome Alarm Clock Radio for iPad

-- Canon PowerShot Camera with photo printer

The bank does note that you have to pay taxes on the value, as they are required to send out a 1099-INT. And if you cancel the CD, you can be charged the amount of the gifts and more in the penalty. The bank has more specifics on the CD terms and conditions.

Will I be opening this CD?

With interest rates so dismally low, this is an innovative CD. If I were to open this CD, I'd stick to the minimum amount in each category - $25,000 in this case. Anything more doesn't qualify me for nicer gifts until I hit the $50,000 gift threshold.

I looked up the retail value of these gifts, and estimate that they total about $1,070. And in five years, my $25,000 CD will have grown by $1,602. Still, I won't be opening this CD. I called IGoBanking.com to make sure my valuations were reasonable and penalties were correct, but have yet to receive a return call.

I could take the same $25,000 and open up a five-year CD at Pentagon Federal Credit Union, yielding 2.25% APY. Anyone can join. The tradeoff for giving up the gift is that it pays an extra 1.00 percent APY. After five years, when those gifts are obsolete and gathering dust, you will have earned an additional $1,340.

Pick your own gift CD

While innovative, I'll pass on the free gift CD. I'd rather pick out my own gift worth $1,340, buying exactly what I want and when they are on sale, than $1,070 of preselected gifts. That means I'd have to defer the gratification and psychological value of getting something today. An easy solution would be to put $23,801 in today, and end up with the same amount I'd have after five years had I bought the $25,000 GiftsforBanking.com CD. I could then go out and buy gifts with the $1,199 I wouldn't have to put in the CD today.

Sure interest rates are low, but getting your cash working hard is still worthwhile versus the zero you may be earning in your money market account. Reframe your decision by calculating how much more you can earn each year versus the 30 minutes it may take to open an account. If you can earn an extra $500 for a half hour of your time, would you do it? I would.

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    Allan S. Roth is the founder of Wealth Logic, an hourly based financial planning and investment advisory firm that advises clients with portfolios ranging from $10,000 to over $50 million. The author of How a Second Grader Beats Wall Street, Roth teaches investments and behavioral finance at the University of Denver and is a frequent speaker. He is required by law to note that his columns are not meant as specific investment advice, since any advice of that sort would need to take into account such things as each reader's willingness and need to take risk. His columns will specifically avoid the foolishness of predicting the next hot stock or what the stock market will do next month.

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