Amtrust's Certificates of Deposit Honored by New York Community Bank

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Amtrust's recent seizure by the office of thrift supervision does not affect the yields of Amtrust Bank high yielding CDs from 2007 and 2008.

Amtrust Bank was a Ohio-based bank that had very strong CD rates in 2007 and 2008.  The CD rates often topped the BestCashCow.com CD rate tables for 2 and 3 year CDs.  News of its recent seizure by the Office of Thrift Supervision caused me concern as I continue to own CDs with the bank that pay over 4%.  New York Community Bank, which acquired Amtrust in secret auction from OTS, has now announced that it will honor the CDs until maturity.

Once again, this proves that purchasing long term CDs, online or in branches, from troubled banks was a good strategy in 2007 and 2008.  As long as you remain below FDIC limits, your money is safe and the terms of the CD until maturity are usually honored.  I purchased CDs off of the BestCashCow.com listings at IndyMac Bank, at Wachovia, at Corus Bank, at Washington Mutual and at Amtrust.  With the exception of Corus, which was not acquired but was closed and where I promptly received payment, all of the CD terms have been honored. 

I am aware, however, that there have been instances where brokered CDs were not honored but were terminated by the acquiror.

I just wish that I had purchased long-term CDs back in 2007 and 2008.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to financial literacy and bank transparency. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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Comments

  • Sol Nasisi

    December 17, 2009

    Good to see that the acquiring bank is honoring the CDs.

  • ktexas

    December 18, 2009

    Thanks for the info. Glad to see NYCB decided to honor the CD rates.

    About Corus Bank, their deposits were assumed by MB Financial Bank, and for most cases they decided to close Corus CDs for those outside of their market area.

    About Wachovia, it wasn't technically a bank failure. They were acquired by Wells Fargo in a "shotgun marriage". It seems like when banks are acquired without being seized by regulators, the acquiring banks always honors CD rates to maturity.

    The official list of bank failures are available @ http://www.fdic.gov/bank/individual/failed/banklist.html

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