AIG Bank has had a major online presence in consumer banking over the last several years and has been a well funded bank ever since they chartered in 2000. Their above average rates have kept them near the top of our national CD rate tables on both certificates of deposit and money market and online savings accounts.
As of 2012, however, their savings rates have been far less competitive.
Today, AIG Bank currently holds the number 13 spot for 12 month deposit rates (with an APY of 0.88%) and their 6 month, 2 year and 5 year CD rates dont fare much better (see complete list of rates below). This is a much less competitive move than we’ve generally seen from AIG in the past.
AIG CD Rates:
- 6 month CD yielding 0.50% APY
- 12 month CD yielding 0.88% APY
- 18 month CD yielding 0.88% APY
- 24 month CD yielding 1.05% APY
- 36 month CD yielding 1.15% APY
- 60 month CD yielding 1.60% APY
When researching customer feedback for AIG Bank on various message boards, we’ve heard largely positive things about the bank. Their online savings and deposit features make it extremely straightforward to open a deposit and maintain it. A wire transfer or direct deposit can be conducted online or you can open a deposit over the phone. Be sure to set up alerts as to when exactly your deposit matures. AIG Bank will automatically renew your deposit if you do not request the money to be sent elsewhere.
AIG Bank Statistics (2012):
- $1 billion in assets
- $842 million in deposits and $158 million in loans
- 37 employees
Outlook for CD Rates:
Dont hold your breath for any major uptick in interest rates over the next one and a half to two years. In the FED’s latest meeting regarding the possibility of interest rate hikes they made it quite clear that they are setting the date at sometime in 2014 when they will consider raising rates again.
You may also want to consider other FDIC- insured online banks if you’re strictly after the highest possible interest rate. Both Able Banking and EverBank are currently offering some fairly attractive rates (when compared to the national average) for both deposits and money market accounts.
CD Rates and Inflation:
Right now we are seeing a growing disparity between savings rates and inflation – as inflation rates rise, CD rates seem to be either dipping or flat-lining. This means that even though your money may be accruing interest in your deposit or savings account, the real spending power of your money is still going down. That being said, any interest rate is still better than no interest rate. So if you’re torn between investing in a bank CD or stashing your cash under a mattress, we would urge you to chose the deposit.
As of 2012, the average rate of inflation has sat at 3.14%, while the average yield on 1 year CDs has been significantly under 1.0%.