AmTrust Direct is now part of New York Community Bank. AmTrust Bank failed on December 2009 and New York Community Bank assumed all deposits. It's common for acquiring banks to have some deposit deals at the failed bank branches (physical and virtual branches) to keep depositors.
AmTrust Direct doesn't have great deals, but it does offer some competitive CD rates as of 2/20/2010. These include:
- 1.55% APY 9 month
- 1.70% APY 12 month
- 1.95% APY 18 month
- 2.15% APY 24 month
Since I haven't done a review of AmTrust Direct since its failure, I thought it was a time for a new review. I looked at AmTrust Direct's FAQs and called the bank today for some additional details. Here are some important CD features:
- Harsh early withdrawal penalties (worse than it used to be): 1) CD terms under 18 months: All interest that would be earned for the entire term 2) CD terms over 18 months: 18 months of interest. FAQ is here, and I received clarification from the CSR.
- Only a soft credit inquiry for CD applications (per CSR).
- Rate locks at the time of the application. You have 15 days for them to receive the funds (per CSR)
- You can fund the CD with an ACH transfer or by mailing in a check (wire transfer is not an option for new customers per CSR)
- When the CD matures, you can close the CD by phone or by sending a secure message and instruct them to mail check, deposit into another AmTrust account, or wire funds to another institution (fee applies) (per FAQ)
AmTrust Direct also offers savings accounts but the rates are nothing to get excited about. Before the failure, AmTrust Direct made it a practice to create new savings accounts with teaser rates while the rates on the old accounts went way down. I hope New York Community Bank changes this tactic.
It should also be noted that New York Community Bank also has its own internet bank at MyBankingDirect.com which has been around for more than four years. They offer a money market account and a couple of CDs with odd terms. I haven't covered this bank much in the last couple of years since its rates have been a little low.
New York Community Bank's ratings for safety and soundness are above average: 4 stars (excellent) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both ratings are based on 9/30/09 financial data. It's a large bank with $12.9 billion in deposits. The bank has been a FDIC member since 1943 (FDIC Certificate # 16022).
Are CDs a Good Idea Now?
I was reviewing the comments of my 2008 AmTrustDirect CD posts, and I came across this June 2008 comment in which the reader gave his opinion about the 4.00% 12-month+ CDs:
In my opinion this is not the time to get in long term cd's. With M/M and savings accounts paying 3.50 to 3.75% I see no reason to get in 4% cd's unless you think rates are going down which I don't.
I just wanted to point out how difficult it is to predict future interest rates. That's one reason to use CD ladders so you don't have to try to guess about future interest rates.