Dedicated to Deposits: Deals, Data, and Discussion

More Drops in Online Savings Account Rates: ETrade, GMAC, Indymac..

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The effect of last month's Fed rate cut continues to be felt. Some banks moved fast with large rate cuts (HSBC Direct), others had their rates creep down (AmTrustDirect), and others probably planned to wait a few weeks before cutting. Etrade is one of the wait-then-cut banks. It dropped the yield on its Complete Savings account from 5.05% to 4.70% APY today.

Perhaps there needs to be another category for the banks that are making two big rate cuts. E-LOAN did this with two 25 basis point rate cuts. Now GMAC Bank has done it. GMAC Bank dropped its Money Market Yield from 4.90% to 4.75% APY. Before the Fed rate cut, it had been 5.30% APY. Below is summary of the recent rate cuts of online savings and money market accounts:

There are still some online savings accounts that are holding on to their pre-Fed-rate-cut yields. It's likely these are just the wait-then-cut banks. It's either part of their strategy or they're just slow. I'll do a review of some of these banks in the next few days.

Thanks to the readers who have been providing updates on the rates.

  Tags: KeyDirect, E*TRADE Bank, savings account

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Comments
14 Comments.
Comment #1 by D (anonymous) posted on
D
Fortunately, I moved my funds out of GMAC one day before their drop to 4.75%. I'm glad I did. Should have done so as soon as they dropped from 5.30%.

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Comment #2 by Anonymous posted on
Anonymous
I keep mentioning that Bank of Internet USA has CD rates of 5.x across all terms, and they allow you to open a CD today but get the money to them as late as "ten business days" later. They will hold the rate for this entire float period. This is especially useful if you have money coming in within the next few business days and fear that rates will drop by then. You can open a CD today and be assured that the rate will hold for the ten business day period. I think it's pretty generous of them.

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Comment #3 by Anonymous posted on
Anonymous
The cuts by GMAC are especially tough for those of use who use(d) GMAC as a hub to transfer money from one HYS to another, especially as we don't know if the "high" rate will still be at the destination account when the money finally arrives there.

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Comment #4 by Anonymous posted on
Anonymous
Re: anonymous Bank of Internet poster... Countrywide has the 10 day rate lock as well and the rates are much higher than Bank of Internet across the board. Indymac does a 12-day lock but the rates aren't as high.

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Comment #5 by Anonymous posted on
Anonymous
The "war on savers" continues...

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Comment #6 by Anonymous posted on
Anonymous
Anonymous proponent of Countrywide,

There was demonstration against Countrywide bank today. You got to wonder if you really want an account with such an unethical bank for a few percent points more.

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Comment #7 by Anonymous posted on
Anonymous
I'm still leaving $500 in GMAC to use as a hub since the time lag is usually 1 day with ACH it still a good account for hub.

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Comment #8 by Anonymous posted on
Anonymous
I didn't realize that Countrywide had the 10 day rate lock. It does have much higher rates, but it also has a $10,000 minimum deposit. Bank of Internet has a $1,000 minimum, so it's easy to get the money in there quickly if you don't want to wait until you can come up with $10,000. I'm afraid that even if I wait just a day or two, they'll both go down to less than 5.00%. These are both good deals in todays markets. I have a $10,000 CD maturing in about 2 weeks. If Countrywide still has the higher rate, I'll go for that one I think. Thanks for the info.

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Comment #9 by Allan (anonymous) posted on
Allan
Re: Coutrywide

Hey if I can find an even more unethicla bank than Countrywide giving a 6.00% rate, I'll be all over it. If they're FDIC insured, of course.

Ethics does not play an equation in where I park my money. The ease of using the website and the interest rates does!

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Comment #10 by ShraZZy (anonymous) posted on
ShraZZy
GMAC did raise their CD's

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Comment #11 by Duck (anonymous) posted on
Duck
Banking Guy I just got email from Costco. Members are still getting 5.2apy on MM account $1000min to open get rate as long as $100 in it. I was surprised they are still offering it with all the rate drops in last week. Also executive get $50 but cost like $50 to be one over business or regular. Bad thing is they use to be a goodplace to stash cash in a Cd but since they been opening branches the rates dropped to low.

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Comment #12 by Pete Crane (anonymous) posted on
Pete Crane
Keep up the great work Banking Guy! For those who may have missed it, see today's New York Times article, "Rate Chasers Are Online and Moving Cash Quickly" (http://www.nytimes.com/2007/10/13/business/yourmoney/13money.html?ex=1192852800&en=9c81973a4660a68f&ei=5070&emc=eta1). Also, for those tired of banks moving rates around, try money market funds! (See my site at: http://www.cranedata.us for money fund info.)
Sincerely,
Peter Crane
Publisher, Money Fund Intelligence

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Comment #13 by Anonymous posted on
Anonymous
I just found this wonderful blog today because of an article in today's New York Times. I have bookmarked it and look forward to reading it in the future.
Thank you Bank Guy!

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Comment #14 by Anonymous posted on
Anonymous
I just found this wonderful blog today because of an article in today's New York Times. I have bookmarked it and look forward to reading it in the future.
Thank you Bank Guy!

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