Dedicated to Deposits: Deals, Data, and Discussion

Higher CD Rates at GMAC Bank Plus News on the FDIC Waiver

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GMAC Bank increased its CD rates today. Two of its most competitive CDs are the 6-month CD with a 3.72% APY and its 12-month CD with a 4.05% APY. All of the rate changes are shown below:

Certificate of deposit rate changes as of 7/18/08:

Term OLD APY NEW APY CHANGE
3 months 3.25% 3.25% 0
6 months 3.70% 3.72% +0.02
9 months 3.75% 3.75% 0
12 months 3.90% 4.05% +0.15
18 months 4.10% 4.10% 0
2 years 4.25% 4.30% +0.05
3 years 4.45% 4.50% +0.05
4 years 4.60% 4.70% +0.10
5 years 5.00% 5.05% +0.05

GMAC Bank's FAQ page does a pretty good job describing the CD details. Please refer to my GMAC CD review post for a summary of GMAC's CD features.

GMAC Bank also has a nice online money market account with a great ACH transfer service. The yield has been a little low in the last few months (currently 3% APY), but it does have a history of competitive rates (see my GMAC money market review).

GMAC Bank in the News

The Wall Street Journal reported that GMAC has obtained a 10-year extension on its waiver that will allow it to retain GMAC Bank with FDIC insurance for at least 10 years.

I reported on this issue in this April post. Here's a little background. In 2006 the private-equity firm Cerberus Capital Management purchased 51% stake in GMAC Financial Service (the parent of GMAC Bank). Due to the special circumstances of this acquisition and of GMAC Bank's status as a Industrial Loan Company (ILC), the FDIC's approval was necessary, and as part of this approval, there was an agreement that within two years one of the following would be done:
divest control of the bank; terminate the bank's insured status; become a registered bank or thrift holding company; or apply to be subject to the same applicable law and regulation as other similarly situated companies at that time.

The end of those two years is this November. An extension to the waiver was the only good option in this current mortgage and credit crisis. So I'm glad to see the 10-year extension.

I've been a GMAC Bank customer now for over 2 years, and I've been very pleased with the online money market account. The yield has been a little low this year, but it has one of the best ACH transfer systems. It allows easy linking to external bank accounts and provides for fast ACH transfers with minimal restrictions.

  Tags: CD rates

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Comments
7 comments.
Comment #1 by Anonymous posted on
Anonymous
FDIC Issues New Deposit Rules for Big Banks.

The Federal Deposit Insurance Corp. yesterday issued new rules requiring around 160 of the largest banks -- those with at least $2 billion in domestic deposits and either $20 billion in assets or 250,000 deposits accounts -- to adopt new procedures allowing banking regulators to settle existing accounts in the event of a bank failure.

All these mean that FDIC will take over any Bank that is not conforming with FDIC rules at any time.

GMAC is on shaky grounds and may not last the next few months, never mind the 10 years extension received.

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Comment #2 by Anonymous posted on
Anonymous
Wachovia is still running 4% 7month and 4.25% 12m cd ads in houston.

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Comment #3 by Anonymous posted on
Anonymous
I'm so glad GMAC got a 10 years extension from FDIC. It's one of my favor bank.

1
Comment #4 by Anonymous posted on
Anonymous
Gmac may be on shakey ground but what large bank isn't. I have dealt with 15 or 20 online banks and GMAC has by far the best system to use. Countrywide is 2nd but you can color that gone as BAC will have that site gone or ****ed up in 6 mo's to a year.I also like Schwab's system but their rates don't cut it anymore.

1
Comment #5 by Anonymous posted on
Anonymous
Just checked with their CSR and she confirmed that it will be a "hard pull" on your credit history. So be aware !!

1
Comment #6 by Anonymous posted on
Anonymous
They upped the CD rates today. 12 months is now 4.15%, which makes them more competitive with the higher rates that the larger banks such as Wachovia and Countrywide have been offering lately.

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Comment #7 by Anonymous posted on
Anonymous
I'm a GMAC Bank customer too, but this recent news doesn't sound good for GMAC LLC as a whole:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aYPIdAQiSHCc
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aoqMX5nJh6SU

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