# Sticky  BMWFS' Multiple Security Deposit (MSD) Program Updated for 2023 (again)!!



## Jon Shafer (Dec 15, 2001)

*BMW Financial Services
Multiple Security Deposit Program*

BMW of North America in conjunction with BMW Financial Services are pleased to announce the extension of a modified Multiple Security Deposit (MSD) Rate Reduction Program continuing through January 3, 2022 and available for all customers who choose to either put multiple security deposits on their new lease, or transfer the balance from their existing lease at lease end. *Please note the rate reduction has been reduced from .00005 to .00004 for 2021*.

The structure for the program will be a money factor reduction of 4 points for every security deposit, with a maximum of 7 security deposits and a .00028 rate reduction.

The contracted rate may not go below 0.00004

*Security Deposit Multiples: Rate Reduction:*

1. -0.00004
2. -0.00008
3. -0.00012
4. -0.00016
5. -0.00020
6. -0.00024
7. -0.00028

*Security Deposit Calculation:*
– Security Deposit are calculated by rounding the customer’s payment up to the nearest $50
increment.

– For example, if the customer’s monthly payment is $425, each security deposit should
be $450. If the customer transfers $3,150 (7 x $450), they will receive the maximum
rate reduction of 28 points.

– The monthly payment should be calculated with the rate reduction first. If the
customer’s payment is $425, but calculated at $399 once the 28 point reduction is
applied, then the security deposit maximum is $2,800 (7 x $400).

– If the customer’s current security deposit amount exceeds the maximum needed for
the rate reduction, the surplus can be remitted to the customer at lease end.


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## ctorrey (Mar 17, 2007)

Glad I got my deal in prior to this change. Keeps getting worse and worse. Great program though - makes a big difference in monthly payment!


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## Weaselboy (Jul 7, 2002)

Still not a bad deal. I just did some rough number crunching and over a 36 month lease the new rate comes out to about a 6% per year return. Given 36 month CDs are under 1% now, MSDs are still worth doing IMO.


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## mjsbmw (Jan 5, 2008)

Weaselboy said:


> Still not a bad deal. I just did some rough number crunching and over a 36 month lease the new rate comes out to about a 6% per year return. Given 36 month CDs are under 1% now, MSDs are still worth doing IMO.


There was a time when the effective interest reduction was the equivalent of over 12%


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## 1968BMW2800 (Aug 13, 2016)

mjsbmw said:


> There was a time when the effective interest reduction was the equivalent of over 12%


And, back then, I was getting 8% on Certificates of Deposit. 6% effective TAX FREE yield in today's world is a great rate of return, especially when one considers the absence of risk compared to other means of attaining similar yield. And with other investments, all you get is money whereas with MSD's, you get to drive a fun car while telling yourself you're making money.

All in how one looks at it.


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## mjsbmw (Jan 5, 2008)

1968BMW2800 said:


> And, back then, I was getting 8% on Certificates of Deposit. 6% effective TAX FREE yield in today's world is a great rate of return, especially when one considers the absence of risk compared to other means of attaining similar yield. And with other investments, all you get is money whereas with MSD's, you get to drive a fun car while telling yourself you're making money.
> 
> All in how one looks at it.


Agree.

I just received back my MSDs on my 2018 X5. If I had put that amount in the market 3 years ago, my return would have been multiples of the effective interest rate back then. Depends on how you look at it and if it is worth parking cash vs investing it.


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## 1968BMW2800 (Aug 13, 2016)

mjsbmw said:


> Agree.
> 
> I just received back my MSDs on my 2018 X5. If I had put that amount in the market 3 years ago, my return would have been multiples of the effective interest rate back then. Depends on how you look at it and if it is worth parking cash vs investing it.


You pays your money and you takes your chances... 
Such is life.


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## taknight4 (Feb 7, 2021)

Having a guaranteed 8% APR on a 36 month deposit is solid compared to a CD or investing in bonds, which still have some risk.


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## 1968BMW2800 (Aug 13, 2016)

taknight4 said:


> Having a guaranteed 8% APR on a 36 month deposit is solid compared to a CD or investing in bonds, which still have some risk.


Right. 

Though it's always good to remember there is,_ possibly,_ a_ bit_ of risk with MSDs in that BMWFS has your deposit so if there are any lease-end charge issues, _theoretically_ the customer has a bit less leverage in any negotiation for reduction or elimination of lease-end charges. In this instance, the customer is negotiating to get money back from BMWFS.

Whereas, without MSDs in BMW's bank, BMWFS is in the position of requesting payment from the customer for any charges they claim the customer owes at lease-end. Some claim the nature of the negotiation might be _slightly_ different in this situation. Maybe.

I use MSDs and think the reward exceeds any risk.


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## 896558 (Aug 25, 2020)

taknight4 said:


> Having a guaranteed 8% APR on a 36 month deposit is solid compared to a CD or investing in bonds, which still have some risk.


who " invests" in CDs anymore.. do they even exist anymore? lol. I think using a CD as a benchmark is not really relevant now.. its the market and the risk vs the BMW return int he form of payment.. and whether you have the money for the MSDs..


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## Jon Shafer (Dec 15, 2001)

mjsbmw said:


> There was a time when the effective interest reduction was the equivalent of over 12%


For many years the limit on the maximum number of SDs was *10*!

And, the rate factor reduction for each? .00005? No. .00006? No. .00007? No. *It was .0001*.

That was when/why the MSD program went viral on Bimmerfest 20 years ago.


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## michaelallanobrien (Jan 5, 2022)

Jon Shafer said:


> *BMW Financial Services
> Multiple Security Deposit Program*
> 
> BMW of North America in conjunction with BMW Financial Services are pleased to announce the extension of a modified Multiple Security Deposit (MSD) Rate Reduction Program continuing through January 3, 2022 and available for all customers who choose to either put multiple security deposits on their new lease, or transfer the balance from their existing lease at lease end. *Please note the rate reduction has been reduced from .00005 to .00004 for 2021*.
> ...


Have you seen any info of this continuing through 2022? Thx


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## Jon Shafer (Dec 15, 2001)

michaelallanobrien said:


> Have you seen any info of this continuing through 2022? Thx


The MSD program returns unchanged from 2021.

👍


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## Jon Shafer (Dec 15, 2001)

*Ha!! Here we go again!!

For 2023 BMW is getting back into the MSD game!*!


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