(MONEY Magazine) – Q. A broker from Merrill Lynch offered me a new product called retail deposit notes. He said they're issued by banks, so they're federally insured, and are similar to certificates of deposit. He added that they have longer maturities than CDs and pay higher interest rates--currently 7%. Is this investment as good as it sounds? Sami Ambar LOS ANGELES

A. Not quite. It's true these notes are FDIC-insured up to $100,000 and pay higher rates than conventional CDs do. But there are a few catches. The minimum investment is $1,000, vs. $500 for a typical CD. Plus, those longer maturities of seven to 15 years, vs. three months to five years for CDs, aren't quite what they seem. Unlike CDs, the notes are callable by the bank, typically after four years. So you can't be certain you're locking in your rate for the full term, as you can with a CD. And if you need to cash out early, you or your broker will have to find a buyer, which may be tough to do since there's no established resale market for the notes.

If you crave government protection for your investment and you want a seven- to 15-year maturity, you're probably better off buying an intermediate-term U.S. Treasury note. You sacrifice some yield--notes pay 6% to 6.5%, depending on maturity--but they won't be called and, if you want to sell, there's a ready market.

Q. I've heard that a new federal law prohibits states from taxing the pensions of former residents once they leave the state. Now that I'm planning my own getaway, I'm wondering if the law applies only to company-paid pensions, or does it include payouts from self-funded retirement savings plans, such as IRAs and 401(k)s? Roy Duttweiler NEW YORK CITY

A. Until they were overruled by the new law that went into effect last year, 16 states had "source" taxes on their books, which allowed them to reach out and touch the pensions of former residents who had accumulated retirement funds within the state and then relocated. Now, a state can no longer stretch across its border to tax emigres on the payouts from any retirement plans that were funded with tax-deferred cash. So, yes, the money you receive from your IRA and 401(k) accounts will be free, for example, from Albany's grasp once you leave New York State. But remember that those distributions will still be subject to any income taxes in your new home state.

Q. Now that we live in Florida, my wife doesn't want her nine-year-old mink coat anymore. Rather than throw it out or give it away, we'd like to find a nonprofit animal rights group we can donate it to and take a tax deduction. Is there one? Gilbert Hadad FORT MYERS, FLA.

A. There are several that would be delighted either to get your wife's coat out of circulation or to use it in anti-fur demonstrations. For instance, if you donate it to Animal Rights Mobilization (P.O. Box 6989, Denver, Colo. 80206) or to People for the Ethical Treatment of Animals (501 Front St., Norfolk, Va. 23510), it may be spray painted red to remind observers of its distressing origins. Send the coat parcel post--and include an estimate of its fair market value, which you can get from a local furrier. (You may have to pay $50 or so for the written appraisal.)

Be sure to request a receipt from the animal rights group. When you take your tax deduction next year, you'll need copies of the receipt and the appraisal--probably at least $500 for a nine-year-old mink, depending on its styling, current condition and the quality of the skins. Fill out IRS Form 8283, and file it with your 1040.

Q. A few months ago, I heard a radio commercial for the Great Providence Brewing Co., a new microbrewery trying to raise venture capital. The ad promised 10 free shares of stock to anyone who asked for them. My wife and I each requested shares and received them, along with an offer to buy a minimum of 300 more shares for 75[cents] each. We sent a $225 check for 300 shares, but it was returned uncashed. Now, I've been told that the company is about to go public at $1.85 a share. I'm wondering if I have any rights to the lower-priced shares offered earlier? Doug Medeiros PAWTUCKET, R.I.

A. Yes, you do. The Great Providence beer brouhaha has come to a head, and here's what happened. State regulators sometimes allow companies to sell new shares of stock to existing shareholders without registering the offering with them. So Great Providence had hoped to avoid the expense and hassle of an initial public offering by giving away 200,000 free shares along with rights, called warrants, to buy additional shares. But regulators in three of the four states where the stock was given away (Connecticut, Massachusetts, New Hampshire and Rhode Island) nixed the idea--as did the Securities and Exchange Commission. That's why you got your check back uncashed.

Fred Argilagos, one of Great Providence's founders, says the company has now registered a $2.7 million stock offering with regulators in Rhode Island and Connecticut at $1.85 a share and warrant holders like you have been notified. However, the number of warrants offering the stock at 75[cents] is roughly 50% greater than the number of shares the company is selling, so orders at the 75[cents] price will be filled on a first come, first served basis.

Even if you score shares, however, don't count on flipping them for a fast profit. At a $2.7 million valuation, the company would trade on the pink sheets, an over-the-counter market for tiny illiquid stocks. The spread between the bid and the asking price can range from one to 10 points when there's a market at all. In other words, if you could find a broker willing to take the shares off your hands, he would almost surely pay you a fraction of the most recent price a retail investor paid. You could try to line up your own buyers, but that may not be easy, since most microbreweries have been disappointing performers. Finally, before you belly up to the bar, remember that Great Providence's shares are not necessarily a bargain even at 75[cents]. When you buy a start-up in a highly competitive field like brewing, you always face a significant risk that your entire investment could get chugalugged.

Reporter associate: Barbara Solomon