In my neverending quest to find more options for banking in today’s environment of low-yield high-yield savings and money market accounts, I’ve come across Aurora Bank. I don’t move money around from one account to another to chase high rates, but until I get around to simplifying my banking options, I tend to open accounts at a variety of banks. I do this mainly for the benefit of Consumerism Commentary, so I can share my thoughts on the latest banks, but if I happen to stumble across a great institution, I’ll be ready to be a full-time customer.
Savings and money market accounts are not necessarily investments. You don’t deposit money expecting your savings to grow. In fact, you’ll be lucky if the interest on savings matching the official rate of inflation. The likelihood of that interest matching your personal rate of inflation is even lower. The purpose of savings is to have cash ready at an instant, either for an emergency or for impending spending, like purchasing a house within the next year.
I recently opened an account at Aurora Bank to see if this little-known institution has what it takes to pull me away from my mainstays.
About Aurora Bank
Aurora Bank, like all legitimate banks in the United States, is a member of FDIC. All deposits are insured by the government up to the legal limit. Aurora Bank has been in operation since 1921, when it was formed as the Delaware Savings And Loan Association. From 1999 through 2009, the bank was known as Lehman Brothers Bank. The bank is currently still owned by the bankrupt Lehman Brothers Holdings Inc., but it must sell the unit by May 2012.
Does this make the bank riskier? I don’t think the issue that the bank will be sold should prevent a customer from opening account. In fact, in the short term it could be good news. Lehman Brothers wants to increase the value of the bank before it is sold, and that means the bank is in search of depositors. When banks are competing for customers, savers tend to win with higher interest rates. That’s what I’m seeing with Aurora Bank right now. As already mentioned, deposits are insured by FDIC, so in the unlikely event FDIC closes the bank, its receivor will be capable of maintaining your account or returning your deposit.
Aurora Bank is offer comparatively high interest rates for savings accounts, money market accounts, checking accounts, and certificates of deposit. I opened a money market account. It offers a higher interest rate than the savings account, but a higher minimum deposit of $1,000.
Bankrate has given Aurora Bank a four-star rating, but it may be worthwhile to note that when broken down into categories, Aurora received five stars in every category except asset quality. In this category, the bank received only one star due to a substantially below normal loss reserve coverage (if the bank’s lending customers default, the bank might have trouble) and a below normal asset growth rate. Despite this negative analysis, the overall rating of four stars qualifies Aurora Bank as being in “sound fnancial condition.”
Opening a new Aurora Bank Money Market Account
All banks require a detailed profile of each customer, and Aurora Bank is no exception. I began my application with my Social Security number and Driver’s License at the ready. The application required my employment information, and I listed myself as Self Employed.
Aurora presented me with several options for funding. I could fund the account with a personal check by mail or through an electronic transfer. I chose the electronic transfer, making sure I had enough in my primary checking account to cover the deposit. As my account would be a money market account, I had the option of ordering checks and a debit card for the account. I decided to order both. I don’t forsee using either unless Aurora Bank is shown to be a significantly better choice than the institutions I currently call my primary banks, but I thought it would be helpful to take advantage of every service offered.
After selecting these choices and confirming my personal information, I was presented with the law-related part of the account opening process. The terms and conditions included a link to the bank’s fee schedule. For the most part, the account is free to operate, but by aware of a few fees and some notes.
- There is a $5 monthly fee if the account balance is below the minimum.
- There is a $5 dormant account fee if an account is inactive for three years.
- THe account balance most be above the minimum to receive interest.
After agreeing to the legal documents, the application presented me with the familiar identity-confirming questions, drawn from information on my credit report. I successfully passed this stage by answering the questions correctly. The final step in this process was providing the routing number and account number for the bank account that would provide the initial deposit of $1,000. After doing so, I immediately received a verification code and an email that explained the next process.
Within four business days, Aurora would make two test deposits nd two test withdrawals in my linked account. This is a familiar procedure, as many banks verify linked external accounts with this method. Once I see the test transactions in my external account, I will visit the link provided in the email from Aurora Bank. If the amounts match, Aurora Bank will withdraw my initial deposit and my external bank will be available for transfers.
After receiving the two test deposits, I confirmed the amounts as instructed in the email I received. Although I entered the correct information, when finalizing my account set-up, I received the following message:
The Account Opening Process Has Not Finished. We’re sorry, but we’re unable to retrieve your customer information. We apologize for this inconvenience and ask that you select one of the options below.
The suggestions available to me were signing up for online banking, signing on if I already had an account, or returning to the Aurora Bank home page. I still did not receive any credentials for accessing my new account online, so there was nothing for me to do. At the same time, I received an email to let me know that my banking information for my initial deposit was confirmed, and I’d receive another email soon with more instructions.
|Aurora Bank FSB|
|Routing (ABA) number||231170136|
|Established||January 1, 1921|
|Savings interest rates||Click here to see rate|
|Money Market interest rates||Click here to see rate|
|Checking interest rates||Click here to see rate|
|CD interest rates||Click here to see rates|
|Location||1000 N. West Street, Suite 200, Wilmington, Delaware 19801|
|Direct Connect||Not supported|
Updated September 6, 2011 and originally published July 27, 2011. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.