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Are You Ready for a Cashless Society?Savings Account Rate Cuts at Countrywide and GMAC Bank
POSTED ON BY Ken Tumin
Two disappointing rate cuts occurred today at Countrywide and GMAC Bank. Countrywide cut the rate on its savingslink account from 4.50% to 4.25% APY. GMAC Bank slashed the rate on its money market account from 3.50% to 3.00% APY.
The big cut at GMAC Bank was surprising since it's so much below their competition. For much of last year GMAC Bank had held its money market account yield at 5.30% APY which was near the top of the savings account rate list. Even as the Fed started cutting rates, GMAC wasn't too quick to follow. With this latest cut, it puts GMAC far below the competition. It's a shame since they have one of the best ACH transfer services. It's easy to link external bank accounts, there are no restrictive transfer amount limitations, and the transfers are generally fast. For more info on GMAC's money market account and their rate history, please refer to this post.
Like GMAC, Countrywide also has one of the best ACH transfer services. Their 4.25% APY for balances over $10K remains very competitive, but this cut is the third one this month. At the end of January the rate was 5.00% APY. You have to wonder if they intend to remain near the top as their merger into Bank of America goes through.
Rate Update Summary:
Thanks to the readers for the comments/emails on these rate changes.
The big cut at GMAC Bank was surprising since it's so much below their competition. For much of last year GMAC Bank had held its money market account yield at 5.30% APY which was near the top of the savings account rate list. Even as the Fed started cutting rates, GMAC wasn't too quick to follow. With this latest cut, it puts GMAC far below the competition. It's a shame since they have one of the best ACH transfer services. It's easy to link external bank accounts, there are no restrictive transfer amount limitations, and the transfers are generally fast. For more info on GMAC's money market account and their rate history, please refer to this post.
Like GMAC, Countrywide also has one of the best ACH transfer services. Their 4.25% APY for balances over $10K remains very competitive, but this cut is the third one this month. At the end of January the rate was 5.00% APY. You have to wonder if they intend to remain near the top as their merger into Bank of America goes through.
Rate Update Summary:
- Countrywide Savingslink: 4.25% APY for $10K+ (was 4.50%)
- GMAC Money Market: 3.00% APY for $500+ (was 3.50%)
Thanks to the readers for the comments/emails on these rate changes.
I recently opened an account at Etrade (for the $25 bonus). I have found their ach to be even faster than GMAC's. I pushed money out to my Bank of America checking account and it was available the next business day. Pulling money in happens the same day.
I'm not finished with GMAC yet but Etrade is holding most of my liquid money for now.
http://quotes.ino.com/chart/?s=NYBOT_DX&v=d6
The last week is VERY serious! Add to that the fact that Greenspan is overseas telling people to sell and we've got MAJOR problems brewing. Don't delay, this ship could completely sink any day.
America Saves Week
And I also fear that as the Fed Fund Rate eventually drops to 2% throughout 2008, Southland Credit Union will drop the interest rate even lower.
No bank or credit union could afford to pay over 5% on a Rewards Checking with no balance cap in today's financial environment. Consider yourself lucky that they are paying even 4.5% with no balance cap.
Now, you have to ask yourself if it is worth getting only 4.5% with you having to go through doing the ten debit transactions and one bill pay or ACH transfer per month.
I know the ten debit transactions can be done in one day, relatively quickly, by conducting ten separate PayPal transactions.
I would be very curious to see if Southland Credit Union's new sign-up rate to their Reward Checking plummets now that their rate is so low. (I am sure there would be no way to find out.) I am also curious to find out if a lot of people will pull their money out of Southland's Reward Checking now that the rate has dropped to 4.5%. (Would you?)
The bottom line: Rate cuts by every single bank and CU are inevitable. Nothing we can do but accept it and live with it. No one should be surprised as the lowering will continue for a long time to come.