What about a 100-year CD?

Corner of dollar bill

I was impressed by the recent story about June Gregg, an Ohio centenarian who still maintains a passbook savings account originally established for her by her father in 1913.

The bank has rewarded her nearly 100 years of customer loyalty by increasing her interest rate to 5% (from around 1%) for 100 days.

I congratulate Gregg for sticking with her savings account, despite Ben Bernanke’s persistent efforts to push savers into stock and commodities speculation.

But the story got me thinking -- what kind of account would make me stick with a bank for 100 years?

The account would obviously have to be a CD. Otherwise, low rates and lousy customer service would lead me to close the account well before the 100 years were up.

But what interest rate would I demand on a certificate of deposit maturing in 2111?

Fortunately, there are 100-year bonds in the marketplace to provide some benchmarks. For example, Norfolk Southern, the railroad, recently put out a 100-year bond issue with a 6% coupon.

Because I’m desperate for yield, I might take a 6% APY for a 100-year certificate. But I’d insist on a bump-up right.

Maybe I’d ask for the ability, at least once, to raise my rate to what the bank was then offering for 5-year CDs.

Thus, if in the 10th year, the bank were promoting a 10% APY 60-month deal, I could elect to receive that rate for the balance of my term -- the next 90 years.

I’d also want an add-on feature, so I could make additional deposits if rates stayed at depressed levels. (This would protect me against the Fed chairmanship being made a lifetime appointment, like Supreme Court justice.)

Of course, in return for these generous terms, the bank would prohibit early withdrawals without its consent.

And I’m sure, given that I’m almost 65 and attended by numerous physicians already, it would eliminate the standard deposit contract term allowing penalty-free withdrawal upon my death or legal incompetence.

But should I insist on the right to exit if the FDIC goes belly-up? And what about protection against imposition of gotcha fees in the future?

You know, the more I think about it, the less likely it seems that a bank and I could come to terms on a 100-year CD.

I should probably stick to the 24-month variety.

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