Another 4% Savings at GMAC Bank

Seems like just yesterday when everyone was shocked when EmigrantDirect's savings account rate was raised to 4%. Now it seems like almost every bank has reached 4% (except of course ING Direct). GMAC Bank is the latest online bank to raise its Money Market Savings account to 4.00% (from 3.75%). HSBC Bank made it to 4% yesterday.

In addition to the interest rate hike of GMAC's Money Market Savings account, GMAC also raised interest rates on its CDs. The new rates for the 6-month and 12-month CDs are 4.35% and 4.70% APY. GMAC also has reached the 5% rate on its certificates of deposit. The 5-year CD is now 5.00% APY. However, with only a 0.30% premium over the 1-year CD, this doesn't make much sense in a rising interest rate environment.

The advantage of GMAC Bank's Money Market Savings Account over savings accounts at EmigrantDirect and ING Direct is that it offers checks. It also has a check card that can be used as an ATM card or a debit card. There's no ATM transaction fees from GMAC Bank and they'll refund up to 4 non-GMAC Bank ATM charges per month.

The only disadvantage of GMAC Bank that I see is their $500 minimum balance requirement. You can open the money market account with only $50, but you'll be charged a monthly fee if the average balance is not over $500. The CDs also have a $500 minimumd deposit requirement. In my opinion, this is a reasonable amount.

I've heard some people voice concerns about GMAC Bank due to its ties to GM. I don't think this is a risk. GMAC Bank seems to be in strong financial shape. It currently has a 4 out of 5 star safe and sound rating from Bankrate.com. Strangely, Bankrate.com shows GMAC with 5 stars in the rate tables. Perhaps GMAC's rating did go down a bit.