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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Ameris Bank Slashes Rate on Darby Bank's Step-Up CD


Ameris Bank Slashes Rate on Darby Bank's Step-Up CD

When Darby Bank failed last Friday and Ameris Bank assumed all deposits, we knew the 4% APY of those old Darby Step-Up CDs was in jeopardy. As I described on Tuesday, the acquiring bank can lower the interest rate on your CD. That appears to be case with Ameris Bank. Readers have reported that Ameris Bank has reduced their Step-Up CD rate to only 0.25% effective Tuesday (11/16/2010). The yield had been 4.00%. A reader also reported that his Darby 18-month breakable CD yield was cut from 2.50% to 0.25%.

The rate is so low, that it seems like it might violate one of the rules the FDIC mentioned in this consumer article. According to the FDIC, "the assuming institution cannot pay a lower interest rate than what it offers to its existing depositors for similar accounts." I would be very surprised if Ameris Bank is offering 3-year CDs with only a 0.25% rate. However, I guess since the CD has special step-up and add-on features, they could claim that it's not similar to their standard 3-year CDs.

With this very low rate, Ameris Bank has made the decision for an early withdrawal an easy one. When a bank fails, the acquiring bank must allow for a penalty-free early withdrawal. With the rate this low, you'll want to withdraw the money as fast as possible. One reader provided the instructions and the CD withdrawal form that he received from Darby in his blog post.

On Tuesday I described how banks that have assumed deposits of a failed bank have been slow in their communications to the CD holders. Ameris Bank appears to be the same way. The new 0.25% rate appears to have taken effect on Tuesday, and a reader reported that letters from Ameris about this change were going out on Thursday. By the time customers receive these letters, a week may have elapsed with their accounts earning this low rate.

Related Pages: Ameris Bank

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starlight   |     |   Comment #1
wowee!  thanks for the quick post...........  yes, a no-brainer to withdraw
Anonymous   |     |   Comment #3
I have Darby's step up CD and was also told Ameris would be sending out a letter, shortly, regarding new rates and our options.   As such, wouldn't it be smarter to wait to receive their official notification rather than rely upon word of mouth rumors being passed around?  If those people are wrong, losing a week or two of interest in this bottomless pit rate environment; isn't nearly as bad as the possibility of incurring an early withdrawal penalty for not following prescribed procedure and timing. In addition, perhaps the rate drop won't be as drastic as stated.  Just a thought!
Anonymous   |     |   Comment #4
@ Anonymous:

I initially had the same thought about relying on "rumors" but when I log in to my darby step up CD account, it clearly states that 0.25% is the current interest rate.  Needless to say, I closed that account within about 10 minutes!
Anonymous   |     |   Comment #5
I am not a member of the CU nor have a CD there BUT these people suck!!!! They are low and I would not give them one penny--I would cash out the CD and move it elsewhere. These horribel bankd and CU are taking abusive advantage of this situation--especially with all the balances on thier balancre sheets----they treat the customers like garbage--BUT just wait --one day the tables will turn and they will be begging customers to give them money woth 10% rates and--then you can invest in the banks that have been good to you!!! Tell them to **** themselves--and take your money out---you can still get about 1.20% at Ally Bank in a MMKT account!
SaverGuy99   |     |   Comment #6
I'll post my final post on this over in the Darby-taken-over thread from a few days ago (where most of this discussion is), but just in case anyone' still waiting for the letters: don't bother. You can log into your account and click on DETAILS and see that the rate has dropped to 0.25% from Tuesday (they even did it retroactive for 2 days -- technically illegal according to the FDIC, but since it was only 2 days worth of retroactive I'm not going to bother with it). I closed mine out today. Darby will be missed. As Bank Deals Guy put it rightly, 0.25% is so low, it almost seems illegal as well (much lower than what they'd surely be paying for normal CDs). The old Darby will surely be missed. Good riddance new Ameris. Hope the door hits you as we all leave.

Anonymous   |     |   Comment #7
Darby was the best bank I ever dealt with.  By contrast, Ameris could best be described as brutal.  I don't blame them for not wanting to honor the exceptionally high rates that Darby extended but cutting it to .25% certainly makes a statement.

Anyone need Darby account closure forms can get them at https://www.darbybank.com/online_services/forms.asp

Time is of the essence.
Anonymous   |     |   Comment #8
I am anonymous #3, above. Wanted to give the benefit of the doubt, but that was just wishful thinking. I was wrong!  The other commentors are correct.  The .25 % rate is right.  And, you can close the account without early withdrawal penalty with all accrued interest being applied.  Where to send it to is the next question to ponder! :)
Julio   |     |   Comment #9
At least I can confirm that they are very fast in closing those CD's and transferring the funds as you request.  The entire process for me took about 2hours from the initial call, to filling out the forms and emailing them back in to the time when the funds were available in my savings account.
Anonymous   |     |   Comment #10
Ditto to what Julio posted.  I faxed the withdrawal form this morning and about three hours later when I checked online, my money had been moved into my Darby savings account.  I then had it transferred out to my home bank (ACH-no fee).
Anonymous   |     |   Comment #11
Has anyone received an official letter from Ameris yet? They were SUPPOSED to send them out on Thursday, but I haven't received anything yet...

Anonymous   |     |   Comment #12
I have read the FDIC's agreement with Ameris Bank and it appears that the adjusted rate can be no lower than Ameris Bank's rate on its lowest earning non-transaction accounts, the thought being that the lifetime early withdrawal with no penalty makes the account like something other than a CD.  I called the bank and 0.25% is not the lowest rate they offer.   Also, the bank did not adjust the local customers in Vidalia or Savannah, just the out of state and out of country CDs customers.
Anonymous   |     |   Comment #13
I am in Georgia and my rate was dropped to O.25%, so the person who told you that they did not do that to in-state customers is incorrect.
Julio   |     |   Comment #14
I am also from Georgia and my rates were dropped as well, so I don't buy into that story that it was only out of state that got the lower rates.

Hrant   |     |   Comment #15
Ok, so we all are pulling out the money...Any ideas as to where to put monies currently?

I'm curious as to and looking for ideas as to where to place my funds. Thank you,

Anonymous   |     |   Comment #16
Best I could find was Discover Bank 30-month 1.73%.
Anonymous   |     |   Comment #17
For the last few months, State Bank (formerly Buckhead) in GA has a 2% setup tied to their select checking and MM.  It's similar to other interest checking with 10 transactions required and ACH--but not exactly!  So, if interested for the short term, call them for details!  As long as it lasts, at least your money is not tied up in long term CD's at these absurdly low rates.
Anonymous   |     |   Comment #18
I hope some of you will take the time to find out what Ameris Bank has to offer.  I have found their rates to be comparable to whats out there and their constomer service is great.  If you are just a rate shopper you probably don't know anything aboaut Darby Bank as a whole.  Had Darby not been paying out unreasonable interest, they would probably still be in business today.  The Ameris Bank CD is paying 1.48% for 24 months.  I closed my CD with Darby and opened one with Ameris!
Anonymous   |     |   Comment #19
Anonymous #38: No, it's not "Had Darby not been paying out unreasonable interest they would probably still be in business today." It's "If Darby didn't get greedy and careless with their loans, they'd still be in business today." Have a look at their sheets. 98% of all the loans that are defaulted on are real estate loans -- and 90% of ALL their loans (cars, home, small business) are real estate loans. They got greedy, were undercapitalized, and were basically forced to offer great rates to attract capital. Their higher rates didn't cause them to go under. If anything, it helped them stay afloat a bit longer by giving them the needed capital. But in the end it was unsustainable, because they made loans to people who did not have the means to pay it back, and they are sitting on a PILE of loans where people have defaulted. That's what caused Darby to go under.

Ameris, offering a rate of 0.25% is actually illegal. According to the FDIC, when a bank takes over another, they can change the rates, but can't change it lower than they're giving to their other customers. The StepUp CD may have allowed deposits, but it was STILL A CD, with a large penalty for withdrawing funds prematurely. It was NOT a liquid account. Giving the Darby people 0.25% interest while giving their own people 1.5% for instance, is clearly illegal according to the FDIC (don't believe me? Read their guidelines).

If I had my money in there I'd immediately file a formal complaint with the FDIC. I might still do so just because those kind of business practices **** me off. But why should I suffer and receive virtually zero interest while it winds its way through things? No, I'm smart. I moved my money immediately to another existing account that I had elsewhere, where I'm receiving decent interest. They still haven't sent out the letters informing customers of the rate change. For those who don't check these forums often, their money is being abused by Ameris right now. Also, they illegally (according to the FDIC themselves) retoractively reduced the rates they paid Darby customers, which they are not allowed to do. Because it was only 1-2 days worth I'm not going to bother. But I got my funds out of there as fast as possible. You're free to do business with a bank that acts like that. I certainly want nothing to do with a bank that acts like that. Good riddance.
Anonymous   |     |   Comment #20
Anonymous #19: They're also one of the worst just for information. Try getting ANY information on their website. No rates, just gloss. I spoke to a CSR about the rate issue and was told "well we can't help you here at the call center, we just have a little script to answer some questions people may have, but you have to call each individual branch..." Terrible bank.
kumhomike   |     |   Comment #21
Just got my letter from Darby stating they would be honoring the rates on my existing cd. I too looked at my account on line and saw the rate changed to .25%. Unfortunatly I closed the cd already.

Guess the lesson is to talk with them and wait for official notification.

I am not in Georgia and not a long term customer, but the cd was rather large.
Anonymous   |     |   Comment #22
Kumhomike: Can you post exactly what the letter says then? Because not only online, but talking to Ameris and ex-Darby reps, they all said the same thing, that it's been lowered to 0.25%. So what you say (them honoring the rates) doesn't make sense. If you wouldn't mind, could you type in exactly what the letter says? Or anyone else who received one? Thanks!
Anonymous   |     |   Comment #23
Had 6 of the 3%-4%-5% 36 Month Step-Up CDs with Darby.  Closed all on Friday (Nov 19) after seeing early Wednesday (Nov. 17) evening (through their online banking) that both the Rate and APY on all 6 CDs had been retroactively changed to 0.25% on Tuesday (Nov. 16).

Will be pursuing both the "retroactively" and the "the assuming institution cannot pay a lower interest rate than what it offers to its existing depositors for similar accounts" issues with the FDIC, the Georgia Department of Banking and Finance, and potentially the Georgia Attorney General's office.

Received 6 letters from Ameris on Monday (one for each of the 3%-4%-5% 36 Month Step-Up CDs).  All 6 letters had the same wording "Beginning November 16, 2010, your Step-Up Certificate of Deposit (CD), account number nnnnnnn, will reflect a rate of 0.25%."

Has anyone who has/had one or more Darby 3%-4%-5% 36 Month Step-Up CDs received a letter or letters stating that Ameris would be honoring the Darby rate on their 3%-4%-5% 36 Month Step-Up CD(s)?

Also, has anyone who has not yet closed out their Darby 3%-4%-5% 36 Month Step-Up CD(s) both (1)received a letter or letters stating that Ameris would be honoring the Darby rate AND (2) has their online account info currently showing a rate of 3.92% and APY of 4.00%?
Kumhomike   |     |   Comment #24
I received a second letter yesterday saying the step-up cd rate was changed to .25%. Here is the paragraph in the first letter that said it would not change.

"Please keep in mind, as stated in your account services agreement, rates on savings,checking and money market accounts are subject to change. If you currently have a Darby Bank & Trust Co. Certificate of Deposit (CD) account, the rate on your CD account remains the same. However, you may withdraw, without penalty for early withdrawal, all or any portion of your account balance. If you choose to do so, and wish to have these funds wired, please send documentation outlining wire instructions with a notorized signature of the signer(s) on the account to:"

Don't know why I got 2 letters, I just had 1 CD account. Seems they are a little confused or have decided to keep some and not others???

Anonymous Lucy
Anonymous Lucy   |     |   Comment #25
Wa Wa Wa! All of you are complaining that Darby Bank was "taken over" but you are failing to see that Darby Bank FAILED. You should be thrilled that Ameris Bank came in to acquire Darby because if they didn't everyone of you would be filing claims with the FDIC to get your money. Good luck with that. I'm a pretty smart investor. I had a decent sum of money with Darby. Yes, I said HAD. As a smart investor, I knew that a bank offering rates higher than the market average in this day in time meant only one thing...they need to raise capital because they are in trouble. I took advantage of the rate, and grew my FDIC insured money. Then when Ameris Bank dropped the rate and I was able to withdraw without penalty, I took my money and said thank you. You should all do the same.
Anonymous   |     |   Comment #26
Your tone of comments aisde Lucy, they have nothing to do with the topic at hand. You don't think we all see the same thing? Of course Darby failed, of course they had higher-than-it-should've-been rates to get capital. Of course it was only going to be a matter of time, ahnd yes, as a smart investor I got my funds out ASAP as soon as they slashed the rate. Even if the FDIC had taken over, the funds still would be there for us, perfectly insured. But none of that changes the fact that what Ameris is doing is illegal according to FDIC guidelines. They're sleazy for doing it, and like hell am I going to be thankful for a sleazy banking outfit like them taking over. It doesn't matter to ME... I already got my money out ASAP. But perhaps unlike you, I feel sorry for those that Ameris is ****ing illegally who haven't noticed yet.
Anonymous   |     |   Comment #27
Concur completely with Anonymous - #26.

Just because the FDIC and Ameris struck a deal for Ameris to assume Darby's assets and liabilities does not give Ameris the legal, and/or moral, and/or ethical right to flaunt, disregard, and circumvent the FDIC's rules, regulations and restrictions as to what Ameris can and cannot do with regard to administering those assets and liabilities.
Anonymous   |     |   Comment #28
RE: Anon Lucy #25

"...because if they didn't everyone of you would be filing claims with the FDIC to get your money. Good luck with that. I'm a pretty smart investor."


are you sure you're so smart?  If the bank had failed the FDIC would have automatically mailed out checks on Sat or Monday.  There isn't any "claim" to file or "good luck with that" going on.
Vic Shaw
Vic Shaw   |     |   Comment #29
I have contacted Ameris and they are dropping my CD's rates also.  However, my rate is dropping from 3.5% to 2.02%, not the .25% as stated in the other postings.  Why is mine different?  Also I received two letters the same day.  One said the rate was being lowered.  The other letter also from the President & Chief Executive Officer, Edwin W. Hortman, Jr., stated:"If you currently have a Darby Bank & Trust Co. Certificate of Deposite (CD) account, the rate on your CD account remains the same."  I was notified today by Fran Henery that the local Ameris President, Phillip Williams, has made a decision not to honor this letter from the CEO and lower my CD rate.  If any attorney wants to take this on for the fun of it, my email address is x2evshaw@southernco.com or call me at work 537-5900 ext 3851. 
Anonymous   |     |   Comment #30
I hate to say this but it seems like this sleezy bailed out banking outfit is going to get away with what they've done.  I talked to the FDIC's attorney for this transaction between said sleezy outfit (won't even mention their name) and the FDIC and they said that the sleezy outfit was operating within their legal rights.  I asked if it was still a good banking practice, and he wouldn't answer but I could tell he wanted to say that it wasn't.
derek   |     |   Comment #31
[please excuse any duplication, as I just posted this same query to the other ameris/darby blog]

yes, I'm still reading this thread.  Can someone point me, chapter and verse, to the fdic rule regarding pre-notification of depositors in takeovers such as this.  thanks.
derek   |     |   Comment #32
I hate to bug you, but . . .

unfortunately I did not word my query #31 correctly, I left out the words 'interest rate'.

by pre-notification, what I meant to ask was regarding a topic often discussed on this forum, namely: the date of notification of interest rate change relative to the effective date of the interest change, especially when the gap between the two is much greater than a week.  I've seen many comments here that, as one might reasonably expect, the effective date cannot be earlier than the notification date [not retroactive, hence the 'pre-' in my post],  but despite much searching, I've not been able to locate the actual reg in the fdic.gov website.  I hope someone can point me to that reg, as opposed to a non-gov reference or opinion.