bank rates

What Happens To Aurora Bank CDs?

Although Aurora Bank is officially no more, savers who took advantage of its once-great CD rates can breathe easy.

New York Community Bank has assured us that it will honor the existing rates and terms on Aurora CDs.

New York Community Bank assumed $2.2 billion of FDIC-insured deposits from Aurora Bank on June 29, according to a news release.

That number included $1.4 billion in brokered certificates of deposit, $768 million in regular CDs and $13 million in money market accounts. (Aurora Bank paid New York Community Bank $24 million for assuming those deposits.)

At one point, Aurora Bank put up strong CD rates in every standard terms, even leading one every now and again on our CD Rates Leaderboard.

But it cut interest rates last fall, then disappeared from our spreadsheets altogether last November.

When a bank fails, the bank assuming the deposits can cut rates. But that wasn’t the case as New York Community Bank bought Aurora Bank, a subsidiary of Lehman Brothers Holdings Inc.

Yes, that Lehman Brothers, the bankrupt investment bank.

Lehman had agreed to sell off Aurora Bank — which wasn’t a part of the bankruptcy — to pay back creditors who lost big after Lehman’s collapse in September 2008.

Aurora Bank’s mortgage division was sold separately from its deposit accounts.

Unfortunately, New York Community Bank doesn’t sell its CDs nationally as Aurora Bank did.

However, it does own two websites that do — AmTrust Direct and MyBankingDirect — and generally offers the same rates across the board.

(New York Community Bank bought AmTrust Bank and AmTrust Direct in 2009.)

Both AmTrustDirect and MyBankingDirect pay 1.75% APY for 60-month CDs, a rate we’re keeping an eye on for you.

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