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How to Start Saving MoneyGMAC Bank's Online Savings Account Yield Back Up to 3.75%
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ON BY Ken Tumin
Update 3/13/09: New lower rates: Online Savings: 2.50% APY, Money Market: 2.00% APY. Refer to GMAC Bank's website for the latest CD rates.
GMAC Bank increased the yield today on its new Online Savings Account back to 3.75% APY. It was just last week when it had reduced it from 3.75% to 3.60%.
Update: A commenter just brought to my attention another change at GMAC Bank that I had missed this morning. There is no longer a $500 minimum opening deposit, and there is no longer a $500 minimum balance to avoid monthly fees. Only $1 is required to open either the Money Market Savings Account or the Online Savings Account. All balances now earn the same interest rate.
GMAC Bank also increased CD rates for several terms. Below is a list of the old and new CD rates:
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.
As I mentioned two weeks ago when the OSA first reached 3.75% APY, GMAC Bank first launched this OSA in September. It has the same features as the Money Market Savings Account except the OSA has no check writing and no debit card. The advantage over the MMSA is a higher yield. The MMSA yield remains at 3.00% APY.
I reviewed the OSA in this September post, and I included my experience opening this account. At that time it was only for existing customers. Now the OSA application is available at GMAC's website, and anyone can apply.
For more details about GMAC's OSA, please refer to GMAC's OSA page or my account review.
Rate increase after only one week?
It seems strange that GMAC Bank would raise this rate back to 3.75% APY after it just lowered the rate to 3.60% last Friday. Is it a sign of how much they need deposits? GMAC Bank's parent, GMAC, has been financially stressed with its home lending unit, Residential Capital (ResCap) and it's having a difficult time now with auto loans. This editorial on GMAC paints a grim picture. I do not agree with the author's third sentence that "smart depositors will flee its small bank." As we've seen with IndyMac and WaMu, there is no reason for depositors under the FDIC limits to worry. And with the new FDIC limits of $250K (see post) more deposits are now insured.
There was some concern early in the year that GMAC may be forced to divest GMAC Bank or to terminate the FDIC status. As this MarketWatch article describes, this issue was resolved in July when the FDIC granted GMAC a 10-year waiver.
GMAC Bank's financial ratings for soundness have gone down a bit, but they remain decent: 3 stars (performing) at Bankrate.com and 3.5 stars (good) at BauerFinancial. Both are based on 6/30/08 data.
Rate History:
03/13/09: OSA 2.50%, MMA 2.00%
03/06/09: OSA 2.65%, MMA 2.15%
02/06/09: OSA 2.75%, MMA 2.25%
01/17/09: OSA 3.00%, MMA 2.50%
10/24/08: OSA 3.75%
GMAC Bank increased the yield today on its new Online Savings Account back to 3.75% APY. It was just last week when it had reduced it from 3.75% to 3.60%.
Update: A commenter just brought to my attention another change at GMAC Bank that I had missed this morning. There is no longer a $500 minimum opening deposit, and there is no longer a $500 minimum balance to avoid monthly fees. Only $1 is required to open either the Money Market Savings Account or the Online Savings Account. All balances now earn the same interest rate.
GMAC Bank also increased CD rates for several terms. Below is a list of the old and new CD rates:
Old and New GMAC Certificate of Deposit Yields as of 10/24/08
Term Old APY New APY Change
3 months 3.25% 3.50% +0.25
6 months 4.00% 4.00% -
9 months 3.90% 3.92% +0.02
12 months 4.35% 4.36% +0.01
18 months 4.25% 4.40% +0.15
24 months 4.35% 4.50% +0.15
36 months 4.50% 4.55% +0.05
48 months 4.75% 4.75% -
60 months 5.00% 5.15% +0.15
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.
As I mentioned two weeks ago when the OSA first reached 3.75% APY, GMAC Bank first launched this OSA in September. It has the same features as the Money Market Savings Account except the OSA has no check writing and no debit card. The advantage over the MMSA is a higher yield. The MMSA yield remains at 3.00% APY.
I reviewed the OSA in this September post, and I included my experience opening this account. At that time it was only for existing customers. Now the OSA application is available at GMAC's website, and anyone can apply.
For more details about GMAC's OSA, please refer to GMAC's OSA page or my account review.
Rate increase after only one week?
It seems strange that GMAC Bank would raise this rate back to 3.75% APY after it just lowered the rate to 3.60% last Friday. Is it a sign of how much they need deposits? GMAC Bank's parent, GMAC, has been financially stressed with its home lending unit, Residential Capital (ResCap) and it's having a difficult time now with auto loans. This editorial on GMAC paints a grim picture. I do not agree with the author's third sentence that "smart depositors will flee its small bank." As we've seen with IndyMac and WaMu, there is no reason for depositors under the FDIC limits to worry. And with the new FDIC limits of $250K (see post) more deposits are now insured.
There was some concern early in the year that GMAC may be forced to divest GMAC Bank or to terminate the FDIC status. As this MarketWatch article describes, this issue was resolved in July when the FDIC granted GMAC a 10-year waiver.
GMAC Bank's financial ratings for soundness have gone down a bit, but they remain decent: 3 stars (performing) at Bankrate.com and 3.5 stars (good) at BauerFinancial. Both are based on 6/30/08 data.
Rate History:
03/13/09: OSA 2.50%, MMA 2.00%
03/06/09: OSA 2.65%, MMA 2.15%
02/06/09: OSA 2.75%, MMA 2.25%
01/17/09: OSA 3.00%, MMA 2.50%
10/24/08: OSA 3.75%
