Woori America Bank installment account -NY, NJ, PA, VA, MD, CA only; rates from 5.50% to 6.25%

Bankdeals just reported on a new Installment account offering high yields. Minimum contract amount is $1,000, and it requires you to have their free checking account.
http://www.wooriamericabank.com/eng/one_heart_E_all.html

A branch visit is required to open the accounts. Also unlike Wilshire there is an 18month penalty for early withdrawal.
edit: for California-based accounts the penalty is only 2 months of interest.

http://bankdeals.blogspot.com/2009/04/installment-savings-accoun...

It seems to pick up where Wilshire leaves off in contract terms. The 18-month penalty reduces its usefulness as a hedge though.

just talk to customer service rep,

here are the rates that are not on their website.

12 months 4.25%
24 months 4.5%
36 months 5.25%

PhrugalPhan said: Normally these deals are for the lucky few, but OMG, there is a location 3 miles from my office! I don't have a ton of extra money, but I can get in on this. Green to you.

Remember, you don't need cash upfront, this is an installment saving account, just make sure you have the cash each month to cover your saving goal.

2stepsbehind said: internetle said: HEPennypacker said: It seems to pick up where Wilshire leaves off in contract terms. The 18-month penalty reduces its usefulness as a hedge though.

This looks good if you don't need money for 4 years, better than any CD out there. Will use both, wilshire and Woori. Really surpise me if CD people have not jumping on this at all.

What are your thoughts on the possibility of inflation and thus rising cd rates in the 4-5 years? Anybody considering the 120month term?

that is why I called to find the rates for 1, 2 and 3 years. IMO, inflation will be tame for atleast 2 years. Of course, I would be rich if I know the number for sure,

for folks in CA penalty is only 2 months (The early withdrawal penalty will be assessed as follows: NY, NJ, PA, VA, and MD: 18 months loss of interest, CA: 2 months loss of interest)

I just spoke to someone in their GG office and from what I was able to understand (her english was hard to understand) you have to fund the installment account from your checking account.

Can anybody figure out how they are compounding the interest on this thing?

This is a more standard installment, with harsher terms (outside of California). Obviously a much better deal than wilshire in CA.

- edit - okay, it appears to be monthly, though not certain (and not that it really matters)

Wait, this bank is called Worry America??!? Hmmmm......

if I go for the 120 months term, but move out of CA during the term, what will my early withdrawal penalty be?

will try to call tomorrow to find out

UPdownLoAD said: Wait, this bank is called Worry America??!? Hmmmm......

Woori actually means "our" in Korean. So when this bank was started in Korea, essentially it meant Our Bank.

gator2000 said: Does anyone understand the chart on their site?

The one showing the monthly installments?

Does the early withdrawl penalty for CA mean that:
whatever term you choose you will only forfeit 2 months of the stated APY rate or
if you early withdrawl does that then your rate drops from to a regular savings rate back dated to your initial deposit plus you loose 2 months of the regular savings rate.

For Californians:
I think that this is the most important issue, because theoretically if you took out the 10 yr term at 6.25% and after 1 yr cancelled, if you only lost 2 months of interest at 6.25% rate, then your effective interest rate would be 5.25%. This is even better than the 1 yr term they are offering at 4.25%.

Thus, assuming that you took our a 10 yr rate at 6.25% and cancelled early these are the effective rates I believe you would get:

Terminate after yr 1 5.25%
Terminate after yr 2 5.75%
Terminate after yr 3 5.91%
Terminate after yr 4 6.00%
Terminate after yr 5 6.05%
Terminate after yr 6 6.08%
Terminate after yr 7 6.11%
Terminate after yr 8 6.13%
Terminate after yr 9 6.14%

Can anyone comment on my theory?
If this is true, then my thought would be to establish the ending 10 yr term $ amount with the largest monthly deposits that you could afford to make to the account. Keep making the deposits until interest rates move above the terminate after yr rates shown above, then terminate and move the money into another account making a higher rate.

I know this sounds like a loophole for CA residents only (i.e. only 2 month cancellation penalty), but isn't that what were all about.

PS. I'm a CPA

Funny. I opened an account at a New Jersey branch and got a "why do you want to open an account HERE feeling". They wanted to know where I was getting the monthly deposit money from, and had me sign a statement stating my annual income and that if I close my account I'll forfeit 1/2 months deposit, which is practically the entire years interest upfront, whether accrued yet or not, before I received the 'truth in savings' booklet which showed 6 months interest penalty others are describing here. Do not open if there is any possibility you might have to close this account, and keep a close watch on your statements for unexpected fees as there's something suspicious here.

TheMeliorist said: cows123 said: Funny. I opened an account at a New Jersey branch and got a "why do you want to open an account HERE feeling". They wanted to know where I was getting the monthly deposit money from, and had me sign a statement stating my annual income and that if I close my account I'll forfeit 1/2 months deposit, which is practically the entire years interest upfront, whether accrued yet or not, not the 6 months interest I am now reading is supposed to apply. Do not open if there is any possibility you might have to close this account, and keep a close watch as there's something suspicious here. My guess is that these Korean banks are themselves participating in an installment banking plan with the Central Bank of North Korea. Eventually it will turn out out to be a Ponzi scheme or worse, earnings paid in fraudulent US currency. But don't worry, the US government will still bailout these Korean banks and certainly their customers.

seriously if this wasn't fdic insured it would fall into the category of "If its too good to be true.." Reminds me of Stanfords pitch

About that Chart, http://www.wooriamericabank.com/eng/one_heart_E_all.html
I am not sure if I understand it right, correct me if I am wrong.

For example of 48mo and $1000 contract amount, so every month transfer $18.67 from checking account to saving account for 48 mo, I will get 5.5% APY on my deposit?

But actually total deposit $896.16 (18.67x48) is less than $1000?

sammyonfw said: About that Chart, http://www.wooriamericabank.com/eng/one_heart_E_all.html
I am not sure if I understand it right, correct me if I am wrong.

For example of 48mo and $1000 contract amount, so every month transfer $18.67 from checking account to saving account for 48 mo, I will get 5.5% APY on my deposit?
kk
But actually total deposit $896.16 (18.67x48) is less than $1000?

Because of interest earned during the 48 mo. which gets you to the full $1000. If you want to contribute $1000 to get $1000 back in 48 mo. then feel free to open up a regular savings at BofA or some other large bank.

kabukicho said: isnt this like buying a 'discount bond' or something? at the end of the term it hits 'par' value aka 1,000.00, for a bond that begins at below par value (below 1,000).
When you buy a discounted bond, you don't have to keep making monthly payments in order to receive the par value at maturity. You just make one payment up front and wait for the bond to mature.

internetle said: Jasonelman's plan looks pretty good here. I have another option as explain in wilshire bank thread. Get 5 accounts with highest interest, close the account that will satisfy your cash need when appropriate. That way, everything stays the same for the contract length.

internetle's idea has the advantage of allowing money to be invested in the higher rate account at a faster rate, allowing you to earn a higher effective APY on a lump sum.

With one account, you would have approximately 50% of the contract amount invested on average for the term. I haven't run the numbers for various scenarios but taken to the extreme, rolling forward accounts could get you close to 100%.

HappyGuy said: I know the bank is FDIC insured but are we sure this product is covered?

why wouldn't it be?

I agree that this would be easier to resolve face-to-face. Unfortunately, I don't live near a branch. I had to travel a significant distance to open these accounts.

Does anyone else reading this have a One Heart account? If so, could you make a branch visit and try to get them to address this issue for your account? Maybe if someone could get this corrected for one account, it would be easier to fix for other accounts.