AIG is keeping its promise to repay the American Taxpayers for the assistance the company received in 2008. Since that time AIG has restructured and sold various business lines to become a more focused and efficient company and the US Government has sold over $17.5 B of AIG stock at a profit. In February 2012, AIG posted its second consecutive year of profits. Our story is unique and we are proud to be keeping our promise to repay Taxpayers with a profit.
Trying to decide if a shorter or longer term CD is best for you? As consumers, we want to get the most yield in our CD investment while factoring in our future financial needs. This can be hard to predict when rates are changing. Generally a CD is considered to be “short-term” if has a maturity period of one year or less. “Long-term” CD’s are those with a maturity period of more than one year. While there is no absolute answer to this question, there are several factors to consider that may help you make a decision.
Consider Your Financial Needs
First, consider your current financial situation including short and long term plans. Will you need access to this money in the next couple of years? If you know you will need the money in the next year, then putting it into a 5-year CD may not be financially advantageous for you. If an unexpected emergency arose, you could close your CD early; however, most banks will charge an early closure penalty fee.
How Soon Do You Need Access to Your Funds?
Short-term CD’s are great if you will need access to the money soon. They may also be better if you believe interest rates are going to rise in the near future. Long-term CD’s could be the way to go if you want higher interest rates of return and less maintenance. They can also be a good choice if you are looking to protect your current interest rate because you believe interest rates will fall over that time period.
Another option is to create a laddered CD portfolio. A CD ladder is simply a series of CDs that mature at regular intervals. Splitting your funds among a mix of short and longer term CDs in a CD ladder could give you the best features of both.
By balancing these factors, you can make a more informed decision about which CD term to choose.
Depositing money into a bank and having a sense of security against loss is comforting. This is where the Federal Deposit Insurance Corporation (FDIC), an independent agency of the United States government, plays an important role. The FDIC provides deposit insurance, which guarantees the safety of deposits (up to set limits by law by account type) held in Member FDIC banks.
According to FDIC.gov, the maximum deposit amount is $250,000 per depositor, per insured bank, for each account ownership category. Several types of deposit accounts are covered such as:
- Checking Accounts (including money market deposit accounts)
- Savings Accounts (including passbook accounts)
- Certificates of Deposits
Ownership categories include:
- Single Accounts
- Certain Retirement Accounts
- Joint Accounts
- Revocable Trust Accounts
- Irrevocable Trust Accounts
- Employee Benefit Plan Accounts
- Corporation/Partnership/Unincorporated Association Accounts
- Government Accounts
FDIC insurance does not cover other financial products and services a bank may offer, such as stocks, bonds, mutual fund shares, life insurance policies, annuities or securities.
The FDIC insures deposits that an individual holds in one insured bank separately from other deposits that the individual owns in another separately chartered insured bank. However, the fund deposited in separate branches of the same insured bank are not separately insured. An additional key point is that individuals who have multiple accounts may qualify for more than $250,000 in insurance coverage if the funds are deposited in different ownership categories and the requirements for each ownership category are met. Talking with a banking professional at AIG Bank is an excellent way to learn how to structure your accounts to maximize your insurance coverage.
Since the FDIC was established in 1933, no depositor has ever lost a penny of FDIC-insured funds. Depositors should understand their coverage limits and confirm their financial institution and investments are FDIC-insured. The more you know about FDIC deposit insurance, the safer your money will be. To learn more about FDIC insurance and coverage, visit www.fdic.gov/deposit/deposits or consult with your trusted advisor or bank.
According to TransUnion, one of the three major credit bureaus in the United States, credit scores are often used by lenders as a predictor of how likely you are to repay your loans. Creditors also use this score to help determine whether to give you credit, and how much to charge you for it. Credit scores range from 300-850, with 850 being the most favorable score. Each of the three credit reporting bureaus produce their own credit score. So you may have three different scores or they could all be the same depending on the information collected by each credit bureau. A credit score is derived from a mathematical formula that utilizes the data from your TransUnion, Equifax, or Experian credit reports. There are a number of factors which go into the formula for calculating an individual’s credit score, including the following:
- Payment history
- Number and types of credit accounts
- Length of credit history
- Severity and frequency of negative credit information, such as bankruptcies, charge-offs and collections
- The percentage of credit used compared to the total credit available
Why Are Credit Scores Important?
Applying for loans or credit cards are two main reasons to strive to maintain a good credit score. Your score is a determing factor of whether you will be approved or not, how much you will be approved for, and what interest rate you will be charged. A growing trend shows that landlords and hiring employers are now requesting permission to check credit scores, and then factoring that into their final decisions. Credit scores can also impact insurance you may be looking to purchase, and may have an effect on determing your premium.
The three majore credit bureaus in the United States are Experian, Equifax, and TransUnion. Each of these credit bureau’s websites not only offer valuable information but they also give access to your free annual credit report to which you are entitled to by law.
According to the Federal Trade Commission, there are approximately 9 million Americans whose identities are stolen each year. This occurs when someone commits fraud or other crimes using personal information such as a person’s name, Social Security number, or credit card number without their permissions. It is important to recognize if you are a victim so you can take the proper steps to resolve the issue. Victims of ID theft may not only suffer financial consquences, but may also potentially miss job opportunities or be denied loans by firms who check credit reports due to errant negative information on their credit reports.
How Does ID Theft Occur?
Many associate ID theft with the internet although it is just one of the many ways thieves steal identities. Over the years, thieves have developed more sophisticated techniques to steal private information. Here are some tricks that theives use to obtain personal information:
- Dumpster Diving: Thieves rummage through trash looking for items that may contain personal information such as bills or other pieces of paper.
- Skimming: Thieves steal credit/debit card numbers by using a special storage device when processing your card.
- Phishing: Thieves pose as financial institutions or companies and send spam or pop-up messages to get you to reveal your personal information.
- Changing your address: Thieves divert billing statements to another location by completing a change of address form.
- Old-Fashioned Stealing: Thieves steal anything with personal infromation such as wallets, purses and mail.
- Pretexting: Thieves use false pretenses to obtain your personal information.
Oftentimes, ID theft victims do not realize they have become a target until they learn about damage that has already occured. While many financial institutions and credit card companies have safeguards in place and watch for irregular spending patterns, be sure to periodically monitor your personal accounts and bank statements regularly along with your credit report. By monitoring both regularly, you may flag transactions that are not your own and can address them quickly.
ID theft can be time consuming and costly to manage once it has occured, so it is wise to do everything you can to protect your private information beforehand. Do your best to understand tactics used by would-be thieves and what you can do to protect yourself, monitor your personal information, and know what to do if you suspect your identity has been stolen.
Here are some additional helpful government links:
AIG Bank will never send you an email requesting sensitive information nor will we send an email that includes a link to a site that requests this type of information.
If you suspect that you’ve recieved a fraudulant e-mail that appears to be from AIG Bank:
- Do not respond to the e-mail
- Forward a copy of the e-mail to the Federal Trade Commission at SPAM@UCE.GOV; then delete the e-mail.
If you responded or disclosed your personal infromation to a possible fraudulant e-mail or website:
- File an online complaint with the Internet Crime Complaint Center immediately.
- Notify AIG Bank at 1-877-238-5221.
No one can accurately predict the future of interest rates, but you can take control over your savings with a Certificate of Deposit (CD) Ladder Strategy.
Here’s how it works:
Assume for this illustration you have $50,000 to invest in a CD ladder. Purchase a $10,000 one-year CD, a $10,000 two-year CD and so on until your last $10,000 buys you a five-year CD. Each year is a rung on the ladder. When the one-year CD matures, you reinvest that money in a five-year CD because by that time your five-year CD has four years left until it matures. As each year’s CD comes due, you roll it into a five-year CD. A CD Ladder is simply a series of CDs that mature at regular intervals.
|Account Opened||Amount||Initial Term||Month of Maturity||CD Renewal Term|
|July 2011||$10,000||1 Year||July 2012||5 Year|
|July 2011||$10,000||2 Year||July 2013||5 Year|
|July 2011||$10,000||3 Year||July 2014||5 Year|
|July 2011||$10,000||4 Year||July 2015||5 Year|
|July 2011||$10,000||5 Year||July 2016||5 Year|
This savings strategy can increase your earnings as five-year CD’s typically pay higher interest rates than shorter term CD’s while minimizing the impact of interest rate fluctuations as you will have a portion of your savings renewing at current interest rates each year.
An effective laddered CD portfolio will give you a predictable cash flow as the CDs mature. You’ll always be in control of how much you invest and when.
Consistent performance is one of the keys to success in any endeavor. Whether you have savings in a money market account, where the interest rate can vary at any time, or certificates of deposit, where you have to be concerned about what the new rate will be at maturity, finding a bank that offers consistently competitive rates for the long haul is just as important as getting a good rate when you first open an account.
Many banks and credit unions offer special deals to new customers or teaser rates when you open an account. While this may increase your interest earnings for a few months, the important comparison to make is what happens to the interest rate after the promotion or teaser rate expires. MoneyRates.com recently featured an article on importance of getting consistently competitive rates.
At AIG Bank, we strive to provide high-yield rates day in and day out. We understand the value our customers place in earning returns on their savings that they can rely upon for the long term and work hard to maintain a reliably consistent rate position.
We know your savings matter, and it is important to us that we provide you with quality products and services to help you achieve your financial goals.
To view our current certificate of deposit rates and money market account rates, please visit our rates page.