How About 3,500 Toasters?

Think of it as a toaster with courtesy lights. The Bank of Bloomfield Hills, Mich., is offering a 1992 Cadillac Seville to customers who buy a $250,000, 30-month certificate of deposit.

You can also think of it as an investment with drawbacks. At most, the Caddy is the rough equivalent of a 6.64% annual yield on a CD. When you take the car, the bank has to report the Seville's sticker price -- $35,575 -- to the IRS as interest paid, all in one year. That's why one potential investor is waiting until 1992, says David Provost, president of the bank.

Maybe the CD buyer should delay permanently. "Whenever we've analyzed these situations, the consumer always loses," warns Martin Bradshaw, publisher of RateFax, a comparison of CD yields. Bradshaw recommends spreading the $250,000 around into CDs from several banks. What a killjoy, huh? But then, he drives a Mercedes diesel.

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