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Review of GMAC Bank and its 12-Month CD - Nationally Available


Update 3/28/09: The CD rates have fallen. Please check the bank's website for the latest rates.

GMAC Bank continues to offer one of the best 12-month CD rates in the nation with a 2.95% APY. Typically, GMAC Bank changes rates on Fridays so this should last at least through next Thursday. This rate has actually crept up in the last two weeks. The rate fell from 3% to 2.85% APY in mid February, but after that, the rate has gone up by 5 basis points for the last two Fridays.

GMAC Bank's FAQ page does a pretty good job describing the 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
A reader noted an odd feature of the one year CD regarding how interest is credited:
The way they handle interest on the CDs is different than any other bank I've ever dealt with. The monthly statements show how much interest is earned for the month, but it's not credited to the account until the certificate matures. So the one year CDs that I opened with them in 2008 have no reportable interest for 2008. It will all be credited at their maturity in 2009.

Another important note is how CDs are opened at GMAC Bank. A reader in my previous post commented that GMAC Bank delayed opening the CD for two weeks and would not honor the rate that was listed at the time of the application. As mentioned above, the rate may not lock at the time of the application.

I've had good luck opening GMAC Bank CDs using funds in my GMAC Bank money market account. The online application gave me trouble on the last CD, but I was able to resolve the issue by phone. When one of my GMAC CDs matured in 2007, I was able to send them instructions to close the CD and transfer it back into the money market account via their online secure message system.

GMAC Bank does not offer IRA accounts, but they do allow custodial and other legally titled accounts. The online application instructs you to call for assistance for these. I don't think the online application allowed you to specify multiple POD beneficiaries, but you can send instructions to GMAC to add this to the account.

Like the CD rates, GMAC Bank has recently lowered its money market and savings account rates. But they remain competitive: 2.75% APY for the Online Savings Account and 2.15% APY for the Money Market Savings Account as of 3/03/2009. 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 parent, GMAC Financial Services, has been hurt with big losses in both its mortgage and auto loan businesses. In late December, the Federal Reserve allowed them to become a bank holding company. GMAC then received $5 billion from the Treasury Department's bailout fund.

If the help that the Feds are providing doesn't allow GMAC to recover and GMAC still goes bankrupt, what happens to GMAC Bank? Refer to my recent GMAC's troubles post for more on this issue.

GMAC Bank accounts are FDIC insured (FDIC Certificate # 57803).
Related Pages: CD rates

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  |     |   Comment #1
Your work is fantastic.
After reading your blog for about 3 months I finally opened a SA with Alliant CU. Well, did I find a surprise. Here is an email from them to me with respect to using my money:
Thank you for your e-mail regarding qualifications and limits on our Skybranch other financial institution transfer process.

Recently, we revised our limits to provide for a more tailored policy based on length and depth of the individual member relationship and certain other risk factors. As such, many member Skybranch other financial institution transfer limits were increased, while a small minority were decreased.

In general, our new policy allows for $1,000 per day during the first month of membership, $10,000 per day during months 2–36 of membership, and significant increases thereafter or where additional lending products (e. g. a mortgage) exist on the membership during months 2–36.

The above-referenced limits are subject, however, to a few other determining factors, including maintenance of the account/membership in good standing (e. g. no delinquent loans or excessive returned checks), average daily average balance, and accounts that traditionally demonstrate good banking practices.

We hope this clarification/information is helpful!

BG, I could scream now.

Sincerely,< /p>

Alliant Credit Union

  |     |   Comment #2
What does this have to do with GMAC?
  |     |   Comment #3
That's what I was thinking as I read the first post.
  |     |   Comment #4
I don't think the first post has anything to do with GMAC bank and this topic other than a possible connection regarding the ACH comment that was made at the end of the article. The posted letter by Alliant Credit Union just underscores the fact that the ACH limits determined by Alliant CU appear to be subject to the whim of the bank officers. It seems that the limits can change daily like stock prices. It is sort of like a fluctuating credit line offered to you by a bank. This is why I tend to avoid banks that limit ACH amounts or put some kind of disclaimer on that service.

Anyhow, going back to the GMAC Bank topic, what will happen if GM shuts down? Will be the bank be negatively impacted by a GMAC shutdown? Maybe so.
  |     |   Comment #5
FS, first of all your comment is wildly off topic. Second of all, you could just wire any amount of money you want so quit whining.
  |     |   Comment #6
GMAC recently discontinued the practice of accepting instructions for maturing CDs via their online secure email. They now require that you phone to provide instructions.
  |     |   Comment #7
I have both a savings account and CD with them. I wonder why they stopped to accept email instructions regarding account transactions? Either they were too lazy to read the email and process the request timely or their email system must have security problems?
  |     |   Comment #8
I'd rather phone instructions, talk to a real person, write down their name and the date/time of the call so if something goes wrong I have "proof" that I spoke with them.

When emailing instructions, I don't know if the instructions were received unless & until the requested action happens.
  |     |   Comment #9
Had the same issue with a BOA CD. Called about a 1099 and they said the interest is credited at maturity thus taxable in that year(in this case 2009). Must have something to do with how interest is credited, daily or at maturity.
  |     |   Comment #10
I have both a savings account and CD with them.
  |     |   Comment #11
Really can't close using secure email anymore? Booo, that's one thing i like about them and Etrade.
Here some tips: If you open a CD using funds from your GMAC savings/MMA, the funds is set and available with the mature date set. If you open with ACH from another bank, the maturity usually shows up on the next business day.

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