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  3. GM Right Notes Now At 1.75% On Liquid Cash With No Tier Levels.

GM Right Notes Now At 1.75% On Liquid Cash With No Tier Levels.

deplorable_1
  |     |   341 posts since 2020

Finally a rate hike worth mentioning. GM Financial Right Notes now pays !.75%. Yep you heard it here first. Only a $500 minimum investment is required to open an account and no frustrating tier level interest rates either. Unfortunately unlike the old GMAC demand notes or Dominion Energy reliability investment this account only allows you to link one external bank account and does NOT offer 3rd party ACH bill pay or a free checkbook(A situation which hopefully will be remedied in the future hint hint ; )) It does however move quickly with FED rate hikes in my experience and that alone makes it worth consideration IMO. No it's not FDIC insured just like all other corporate debt accounts. The processing agent is The Bank of New York Mellon unlike most of these accounts which use The Northern Trust Co. Also like all the other corporate debt accounts there is no annoying 6 withdrawal per month or small ACH transfer headaches to deal with. Here is the link for more info: https://www.rightnotes.com/#contact

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Choice
  |     |   599 posts since 2020
Wow, an uninsured note issuer on DA! Uncle Bennie down the street may have better rates and we know who stands behind Bennie!
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deplorable_1
  |     |   341 posts since 2020
Instead of detracting you may want to add some ideas yourself since you seem to be so much wiser than I am. So where do you park your liquid cash in between CD deals that earns a better rate? It's not like I was hiding the fact that it's not FDIC insured.
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Choice
  |     |   599 posts since 2020
Rates for uninsured entities especially those that have bk in their background are not suitable for DA…not even any private guarantee(s) from affiliates nor any stated sinking fund, etc
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Rickny
  |     |   259 posts since 2017
In Kens post 6 days ago about liquid accounts he lists these "notes" under the following heading.

Bank Account Alternatives - May Not Be FDIC Insured

I commend D1 for mentioning these notes and they they are not FDIC insured.
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Choice
  |     |   599 posts since 2020
Another opportunity to go to the next level! April CPI out tomorrow
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kcfield
  |     |   95 posts since 2012
Deplorable: While I personally would not invest due to the lack of FDIC insurance, I appreciate your post because it gives readers another choice. One of the benefits of DA is that it expands the semantic range of what "savings" means beyond just traditional savings and CD accounts (financial notes, I-bonds, interest bearing checking accounts, etc.). The information you have provided about GM's Financial Right Notes helps to expand that conversation. Choice is an essential tool for savers in my view.
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milty
  |     |   31 posts since 2018
Considering there are a couple of traditional banks offering 1.25%, and assuming a a deposit greater than say $25K, what do you think is a reasonable enough difference to open a non-FDIC account? That is, is a half-percent enough?
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kcfield
  |     |   95 posts since 2012
Hi Milty: After Deplorable's post, I did some internet surfing, and found some similar options that pay even more, such as U-Haul's offerings. However for me, If I am going to invest in something that is not FDIC insured, I am going to stick with a four or five star rated bond fund with a solid 10 year track record and relatively low beta with respect to risk. There are certain risks I might take for a percentage point or more extra interest--such as a somewhat higher early withdrawal fee. However, lack of FDIC insurance is such a big risk, that I would personally not venture into financial notes. I am just speaking for me and my family; for someone else, they may find it to be a risk worth taking if the interest rate difference is significant.
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deplorable_1
  |     |   341 posts since 2020
Interesting U-Haul notes kcfield but totally different type of investment as the funds are not liquid. You must hold them until maturity so this is more or less like a non FDIC insured CD. No I would not invest in them for that reason. Here are the terms:
U-Haul Investors Club® is not for short-term investors
U-Haul Investors Club® members cannot easily sell or trade their U-Notes®, and are required to hold the U-Note® until maturity unless earlier redeemed by us in our sole discretion. Maturities range between 2 to 30 years, please review the terms in our prospectus and prospectus supplements carefully and invest accordingly.
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deplorable_1
  |     |   341 posts since 2020
For me it's about more than just the interest rate and FDIC insurance. It's also about no limitations like 6 withdrawals per month or ACH limits. These accounts allow you to move large amounts of liquid cash quickly in order to take advantage of a time sensitive CD. As we know all too well when a good offer comes out you need to be able to move quickly to take advantage of it.
They also are a great alternative to a standard or even a rewards checking account because they require no direct deposit or debit card transaction hoops while still providing a good interest rate on bill pay cash. As a bill pay account like Dominion Energy Reliability Investment you could just stick with the lowest tier level and only put a few months bills in there if you are that concerned about no FDIC coverage. Not much risk there and still beats a 0% checking. Currently 1% for the lowest tier but that will change soon with more FED hikes. These accounts don't linger at low rates as the FED moves like most banks do. Therefore no need to keep switching accounts and rate jumping.
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jack12
  |     |   66 posts since 2021
I appreciate you posting about this
I am considering it
They don't do a hard pull do they?
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deplorable_1
  |     |   341 posts since 2020
No I don't remember a hard pull but they do require something a bit different. A "Medallion signature guarantee". Only certain banks will do this. I used Chase because I was doing a bank bonus and have some Chase credit cards they did this for me with no fee. Best to call around and see which banks in your area will provide this service. Some may charge a fee if you are not a customer. Oh and before you go make sure that there is someone there that day who can do it. Only higher level employees can perform this service it can't be done at the teller window. Here is a bit of info on this:
https://www.investopedia.com/terms/m/medallionsignatureguarantee.asp
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Rickny
  |     |   259 posts since 2017
I opened an account with Right Notes on line and had to wait 2 days for approval. No need for a Medallion Signature from the bank. May have been requirement in the past.
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deplorable_1
  |     |   341 posts since 2020
Good to know I remember the first time I ran into this was when I opened my GMAC Demand note account a long long time ago. Then it seemed like every other corporate debt account had this requirement as well. It may depend on if you plan on doing large ACH push and pull transfers or just writing checks. I seem to recall that being an option on the account opening form. Looks like you have to have a relationship with GM to sign up now as well. I don't think that was always a requirement although all it takes is being a customer.
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Rickny
  |     |   259 posts since 2017
You can just select that your a GM customer on the on line application. I owned a GM car 5 years ago.
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