AIG Bank announced that it will discontinue operations to service retail deposit accounts. Existing AIG Bank customers have several weeks to move their deposits before all accounts are closed in the fall.“AIG Federal Savings Bank is currently undergoing an orderly transition from a traditional savings bank to a trust only thrift,” said Jon Diat, an AIG spokesperson. As of March 31, 2013, AIG Bank held approximately $778 million in deposits, according to the FDIC database.

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In a notice sent to customers, AIG Bank said that all non-IRA accounts — including certificates of deposit (CDs), money market and savings accounts — will be closed automatically as of Sept. 30, 2013.

CDs that reach maturity after the account closure date will earn any accrued interest, plus any interest that would have been earned if the account wasn’t closed early. Customers also have the option to close their CDs, without any early withdrawal penalty, but only the accrued interest will be credited to the account. Any CD that matures between Aug. 26, 2013 and the account closure date will not renew nor continue to earn interest after maturity.

For other deposit accounts, AIG Bank will cease all transactions beginning Sept. 13, 2013 in preparation for account closures. Deposits and withdrawals after this date may not be processed. Customers are asked to make arrangements to re-route transactions to their non-AIG Bank accounts.

All IRA CDs and money market accounts are being closed as of July 31, 2013 under the conditions as non-IRA accounts. Unless customers work with a successor custodian to receive these tax-deferred funds, AIG Bank will send IRA rollover checks that must be deposited to another IRA within 60 days to avoid tax repercussions.

Earlier this month, federal regulators agreed to impose tougher government scrutiny and financing requirements on AIG because the company was considered a crucial piece of the U.S. financial system.

There was no mention of regulatory pressures that may have pushed AIG to discontinue servicing of retail deposit accounts.

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Simon Zhen

Simon is a research analyst for MyBankTracker. He is an expert on consumer banking products, bank innovations and financial technology.
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