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BUMP-UP CDS MAY NO LONGER BE A BARGAIN

In the world of gimmicky savings products, a good deal doesn't last long. Case in point: the bump-up CD.

When interest rates were rising, a few banks offered bump-up CDs that guaranteed increases in the annual percentage yield (APY) as long as you held the product to maturity. Now the banks are backing off.Until March, Huntington Bancshares marketed a 24-month "Step Rate" CD that paid 5 percent at first, 6 percent after six months, 7.5 percent after a year and 10 percent after 18 months - for a blended APY of 7.52 percent.

The bank pulled the product because "we were betting on rates continuing to rise, but it looks as if they're not going to," says Mary Jo Crane, Huntington's product manager.

Remaining step-up CDs with guaranteed increases simply don't beat traditional certificates. Liberty National Bank of Kentucky's 18-month "Optimum," for instance, starts out at 5 percent and increases two percentage points every six months, for an overall APY of 7.06 percent. But you can get about the same yield on an ordinary 12-month CD.

A "penalty-free" early withdrawal might seem to give Liberty National's product the edge, but don't take the bait. By taking money out early, you lose out on the higher yield in later months, producing a below-average overall return.

CDs that step up only if market rates rise are just a gamble. Riggs National Bank's one-year "Can't Miss" CD automatically reprices after six months to the new going rate. But at Riggs' recent APY of 6 percent, you're probably better off locking in a higher-yielding, no-frills CD than counting on a rate increase.