Let s hear it for the defense of callable certificates of deposit. Several of you have written in response to a column dealing with consumer complaints about callable CDs. Banks will almost certainly call the CD if interest rates drop and they can issue new certificates at a lower rate.
Consumers have no such choice, however.
If interest rates rise in the meantime, they re stuck holding a lower-paying certificate. Or if they are able to unload the CD by selling it to another buyer, they will likely receive much less than what they paid for it. Those are the minuses. If the bank ends up calling the CD, at least you received an attractive rate of interest while you held it, more than you could have gotten elsewhere. But if the rate that the CD pays is attractive enough or meets you income needs, at least you are guaranteed to keep getting it many years into the future.