I just learned of a new internet bank that’s offering competitive rates on an online savings account and online CDs. The name is confusing. It’s GE Capital Bank, and it should not be confused with GE Capital Retail Bank. Thanks to the readers who mentioned this bank in the comments.
I called GE Capital Bank this morning, and I was told that they just started offering the online savings account and CDs in the last month. I also asked how they are related to GE Capital Retail Bank. I was told they are two separate banks that are both part of the General Electric Company.
In January of this year GE Capital Retail Bank finalized the acquisition of MetLife Bank’s online deposits business. So from the consumer internet side, GE Capital Retail Bank is essentially the old MetLife Bank. Before the acquisition of MetLife Bank, GE Capital Retail Bank had not been in the retail deposit-taking business. It was established with FDIC insurance in 1988 (FDIC Certificate # 27314), and it has been focused on providing customized credit programs to retailers and consumers. It’s primary federal regulator is the OCC.
GE Capital Bank was established with FDIC insurance in 1993 (FDIC Certificate # 33778), and its primary federal regulator is the FDIC. In 2012 the bank changed its name from GE Capital Financial Inc. to GE Capital Bank. According to GE Capital Bank’s About page, they are a “Utah state-chartered industrial bank owned by General Electric Capital Corporation” and they “act as a multi-product commercial finance bank, and use deposit accounts to fund [their] commercial loans and leases.”
GE Capital Bank must have determined that internet retail deposits would be useful for their funding needs. It seems strange that GE Capital would operate two separate internet banks that compete against each other. You have to wonder how long this will continue before there is a merger. When Capital One acquired ING DIRECT, it didn’t take long for Capital One to consolidate its old internet bank into the new ING DIRECT division (now called Capital One 360).
You may remember a GE internet bank called GE Money Savings. I had posted on this bank and its internet savings account in 2006. The rates didn’t hold up, and I stopped reporting on it after 2006. I don’t know what became of this bank and how it might have evolved into the above banks.
GE Capital Bank’s Online Savings Account Review
The most noteworthy aspect of GE Capital Bank is its online savings account which has a competitive rate of 0.90% APY for all balances (from $1 to $1 million) as of 6/21/13. There is no monthly service fee. It’s a variable rate with no guarantee about future rates.
They do have a decent ACH external transfer service. Here’s a summary of its features:
- micro deposits (also called trial deposits) used in the link setup process (per CSR)
- outgoing transfer limit of $125,000 per online transaction (per FAQ)
- Allows up to 4 linked accounts (per CSR)
Refer to the bank’s website for more savings account details.
GE Capital Bank’s Online CDs
The online CD rates are competitive, but currently there aren’t any exceptional rates. The terms range from 6 months to 6 years. Minimum deposit is $500, maximum deposit is $1 million.
The early withdrawal penalty is 90 days of interest on the amount withdrawn for terms under one year. The penalty is 270 days of interest for terms from 12 to 60 months, and 365 days of interest for terms over 60 months.
You can choose to have interest added back to your CD or paid out monthly. You can also choose to withdraw interest penalty-free that has been credited to the CD at any time.
Like Ally Bank, they offer a 10-day rate guarantee which guarantees that you get the highest APY in the 10 days from your CD application as long as they receive the CD deposit within those 10 days.
As of 6/21/2013, the most competitive rates include a 1.00% APY 18-month CD, 1.25% APY 3-year CD and a 1.60% APY 5-year CD.
GE Capital Bank is sizable with $14.7 billion in assets. It has an overall health score at DepositAccounts.com of 5 stars (out of 5) with a Texas ratio of 1.88% (excellent) based on March 2013 data. Please refer to our financial overview of GE Capital Bank for more details. The bank has been a FDIC member since 1993 (FDIC Certificate # 33778).