AIG Bank's Online Money Market Account and CDs - Nationally Available

POSTED ON TUESDAY, JUNE 16, 2009 BY Ken Tumin

AIG Bank is offering some competitive rates on its money market account and CDs. They've been around for several years, but I don't remember being impressed by their rates. Their current rates are not great, but they are competitive. So I thought a post on AIG Bank would be worthwhile. I hope they don't face the same problems that Ally/GMAC Bank has been facing with pressure from the ABA and the FDIC to keep their rates down. With the huge bailout AIG received from the government, you'll have to wonder if their bank will be pressured.

Money Market Account

AIG Bank's money market account has tiered rates with a minimum balance of $2,500 to avoid a $10/month fee. The rates as listed at the bank's money market page as of 6/16/09 include:

1.76% APY $2.5K-$10K
1.96% APY $10K-$50K
2.01% APY $50K-$100K
2.06% APY $100K-$250K
2.11% APY $250K+

It appears they don't offer an ACH transfer service. I called this morning, and the CSR said that you'll have to fax a form if you want to initiate an ACH transfer. You can't initiate such transfers online. You should be able to do ACH transfers if you initiate them from your other bank. The account does have limited check writing and a debit card so you can access funds with checks or at ATMs.

Below are some of the money market account features based on my conversation with the CSR and from their FAQ:

$2,500 minimum to open
$10/month fee for balances under $2,500 (FAQ)
Limited check writing (typical 3-check per month limit as required by regulation)
First book of 40 checks is free
Visa Check Card that can be used at ATMs. No charges for using other banks' ATMs (but no reimbursements of their fees) (FAQ)
Account can be funded with an ACH transfer, but there's no online ACH service after account is opened (CSR)
The CSR would not comment on the question of a hard credit inquiry. Application does state: "By applying for an account, I also agree that my credit and account history may be reviewed with consumer reporting agencies."

Certificates of Deposit

Like the money market rates, AIG Bank's CD rates aren't that great, but they are competitive, and they seem to have been dropping a little less than CD rates at other banks. The CD rates as listed at the bank's CD page as of 6/16/09 include:

1.86% APY 6 months
2.31% APY 12 months
2.36% APY 18 months
2.51% APY 24 months
2.96% APY 36 months
3.46% APY 60 months

According to the FAQ, rates generally change on Mondays, but rates are subject to change at anytime. According to the CSR, the rates will lock at the time of the application. This issue has been important this year as rates keep falling. Below are some of the important CD features based on my conversation with the CSR and from their FAQ:

$2,500 minimum deposit
CD can be funded by ACH transfer, wire transfer or by mailing a check (CSR)
Rate locks at the time of the application (CSR)
You can let interest compound or have it credited to another AIG Bank account each month (FAQ)
IRA CDs are available (CSR)
You can include beneficiaries on accounts (CSR)
Early withdrawal penalty is 90 days of interest for terms 12 months and under. Penalty is 180 days of interest for terms over 12 months (CSR)
10 day grace period when the CD matures (CSR)
To close the CD, they require signed instructions which can be faxed or mailed (CSR)
At maturity, you can receive the funds by check or a wire transfer ($25 outgoing wire fee)
For the issue of hard credit inquiry, see the end of the MMA features above

Bank Overview

In terms of assets and deposits, AIG Bank is much smaller than Ally Bank so perhaps they'll have a better chance staying under the radar. AIG Bank has $1.3 billion in assets and $1.1 billion of deposits as compared to Ally Bank's $36.4 billion in assets and $22.5 billion in deposits. AIG Federal Savings Bank has been a FDIC member since 2000 (FDIC Certificate # 35267). AIG Bank's ratings for safety and soundness are fair: 3 stars (adequate) at BauerFinancial (based on 3/31/09 data) and 3 stars (performing) at Bankrate.com (based on 12/31/08 data).

Thanks to the reader who mentioned AIG Bank in the comments.

Other High Certificate of Deposit Rates

Previous Comments

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Ari | Jun 16, 2009 | Comment #1

They'll git hit by ABA as well.

Anonymous | Jun 16, 2009 | Comment #2

First of all this is a great site!...it seems a shame, however, that depositors have to spend lots of valuable time sifting through the various rates offered. It seems to me counterintuitive for the Goverment to be pressuring banks to LOWER their deposit rates in order for borrowers, who don't have a lot of money, to be able to borrow at unrealistic rates. If they are going to regulate banks the Government should be much more concerned about what the banks would do with all the money that would come in if they were to offer higher rates.

Anonymous | Jun 16, 2009 | Comment #3

Anon@4:20 PM, your comments seem contradictory. I think the government IS concerned with what the banks would do if they offered higher rates (namely, make riskier loans to try to make enough profit to cover the deposit rates). The name of the game is to press deposit rates low and let borrowing rates go up, which makes the banks more financially sound but ****s both types of bank customers - savers and borrowers. I guess the public exists for the benefit of the financial system and not the other way around.

Anonymous | Jun 17, 2009 | Comment #4

Great bank.

Anonymous | Jun 17, 2009 | Comment #5

No way would I put money in this bank. AIG gave most of there tarp money to Goldman Sachs, J.P. Morgan & foreign banks. AIG is still broke