Dedicated to Deposits: Deals, Data, and Discussion

GMAC Bank Raises the 12-Month CD Rate

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GMAC Bank raised its 1-year CD rate today from 2.75% to 2.80% APY. Unfortunately, its 6-month CD rate fell from 2.25% to 2.15% APY. Rates for all the other terms remain the same. GMAC Bank's 9-month CD is also competitive with a 2.30% APY. Typically, GMAC Bank changes rates on Fridays so this should last at least through next Thursday.

Refer to GMAC Bank's CD rates page and their FAQ page for the official CD details. Some things to note include:
  • Minimum deposit is $500
  • CD can be opened online or by phone
  • CD can be funded by ACH electronic funds transfer or by check
  • If funded by check, rate does not lock until check is received
  • Early withdrawal penalty is 180 days of interest for terms over one year, 90 days of interest for shorter terms
  • 10 day grace period at maturity in which you can close CD without penalties
  • Interest can be posted monthly, quarterly, semi-annually or annually
  • Multiple POD beneficiaries are allowed (may need to be set up by phone or secure message)
  • No IRA accounts provided
GMAC Bank's money market and savings account rates remained the same, and they're still very competitive: 2.25% APY for the Online Savings Account and 1.90% APY for the Money Market Savings Account as of 5/1/2009. GMAC Bank continues to be my favorite online bank due to its ACH bank-to-bank transfer service (see my latest OSA review).

GMAC Bank's Future?

GMAC Bank's parent, GMAC Financial Services, has been hurt with big losses in both its mortgage and auto loan businesses. The latest news is that GMAC has "reached an agreement to provide auto financing for Chrysler's dealers and customers and in turn will receive capital from the government." In late December, the Federal Reserve allowed GMAC to become a bank holding company. GMAC then received $5 billion from the Treasury Department's bailout fund. So with GMAC continuing to receive help from the government, there doesn't seem to be any immediate concern about bankruptcy.

If GMAC goes bankrupt, what happens to GMAC Bank? It may not mean a bank failure. When Lehman Brothers filed for bankruptcy last year, Lehman Brothers Bank continued to operate (see post)

If you stay below the FDIC limits, there's not much to worry about. GMAC Bank deposit accounts are FDIC insured (FDIC Certificate # 57803).

One thing to note is that the current basic $250K deposit insurance limit is only temporary and is scheduled to go back to $100K on December 31, 2009. Some references on this issue:
  Tags: CD rates

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