GMAC Bank

[JoyJoy]

GMAC Bank is paying 4.30% APY on their Money Market Savings and 4.80 APY on their Certificates of Deposit. GMACBank.com

[sweeps]

It is questionable how long GMAC can maintain this rate given the troubles of its parent company.

[dealsaver]

Originally Posted by Sweepsplayer

It is questionable how long GMAC can maintain this rate given the troubles of its parent company.

If that was true, why would GMAC Bank's rates be rising while the fortunes of GM have been on the decline as of late? For those who are worried about the financial stability of GMAC bank , click here.

[sweeps]

Regarding your link to Bauer Financial ratings, what's the big deal? Every bank I searched for had a 4-star rating. The site probably gets paid by the banks, so I highly doubt its impartiality.

Your money is likely safe at GMAC Bank; after all the accounts are FDIC insured. I just don't think they'll be able to keep up in the long run. GM hasn't had to take any drastic measures yet, but it's looking like they will have to at some point, perhaps including bankruptcy.

[dealsaver]

Originally Posted by Sweepsplayer

Regarding your link to Bauer Financial ratings, what's the big deal? Every bank I searched for had a 4-star rating. The site probably gets paid by the banks, so I highly doubt its impartiality.

Your money is likely safe at GMAC Bank; after all the accounts are FDIC insured. I just don't think they'll be able to keep up in the long run. GM hasn't had to take any drastic measures yet, but it's looking like they will have to at some point, perhaps including bankruptcy.

Your search was limited. Some banks have higher ratings, some have lower ratings. If you want to know about Bauer Financial's ratings, why not call them directly or read about them before speculating on their impartiality.

Few banks offer the highest rates consistently over time. I don't think that bankruptcy speculation would be the reason for them to offer lower rates in the future. I would imagine the effects of such speculation, if any, would be quite the opposite.

[sweeps]

I stand corrected on Bauer Financial.

Nevertheless, I stick by my prediction on GMAC Bank. See this Reuter's article:

If GM does not sell a majority stake in GMAC, GMAC's ratings would be lowered to the level of GM's, Sprinzen said. S&P has long rated GM and GMAC the same because of the control GM has over GMAC and because their businesses are intertwined.

A GM bankruptcy would ultimately lead to one at GMAC, Sprinzen added.

Frankly, I couldn't care less whether people do or do not save their money in GMAC Bank or any other bank. Just trying to offer people a more rounded view of where they're putting their money.

[dealsaver]

Struggling banks often have to offer higher rates to attract deposits. If you thought the troubles of GM were negatively impacting GMAC's deposit business, I thought you might have had a particlular insight to the contrary based on your statement.

[jeffrey]

Here is one person that hopes <a href="http://gmacbank.com/">GMAC Bank</a> continues to keep their rates high and thrive! They were kind enough to recently include our money saving tip in the "Savings Tips" section of their site

[CRFSaver]

There is not as much concern over GMAC bank as there is with GMAC or GM. As a bank, and a bank insured by the FDIC, it is not allowed to go bankrupt. Now it can go insolvent, but in that case it would be worked out by the FDIC. GM's and GMAC's debt rating are the same. Here is something that will shock most of you though, GMAC can still borrow money in the markets at levels close to GE, (AAA levels). Without getting into it GMAC can raise money in the Asset Backed Securities market with approximately 97% at the AAA level.

GMAC also has a program that is not FDIC insured called demand notes that pay about 5.25% right now but again there iss the risk you would become a general creditor of GMAC. Of course GMAC is immensly profitable. It is the car manufacturing operation that is pulling it down. Most likely GMAC would be sold or spun off before or during a GM bankruptcy.

As for banks paying higher rates, yes banks having financial difficulties have to pay higher rates, but also non-branch banks as well as wholesale banks tend to pay higher rates. Banks like Capital One, ING (and before the Chase merger) JPMorgan had to pay higher rates. Capital One (before Hibernia merger) and ING don't have branches. This allows them to pay higher rates due to lower expenses (no branch overhead) but also requires them to pay it as they dont have low cost checking accounts to fund the business. Traditional wholesale banks never had a lot of deposits so would "buy" hot money in the markets with higher rates.

As for GMAC's and GM's business being intertwined I dont 100% agree with that statement. GMAC makes a ton of money off of lending outside the auto industry. Ever heard of Ditec.com? Guess who owns them? You got it, GMAC! They have a huge commercial lending operation as well as large insurance operations.

[sweeps]

Fair enough. All I'm saying is, for me personally, the drama isn't worth the extra 0.05%.

[fratkid21]

I do have one positive thing to add here.... I have one mortgage with GMAC and one with Ditech (also GMAC)... I have had only good experiences with them... Also, Ditech.com has done pretty well in capturing a large portion of the market when it comes to mortgages....

Now having said that, when all of these "real-estate investors" start hitting the end of their 3 and 5 year arms, and defaulting on loans, how will that affect ditech and GMAC mortgage companies???

let's also keep in mind that GMAC bank's rates didn't "go up" when GM starting really having trouble (well, the really bad trouble of late), they've been competitive with the other online banks since the interest rate bonanza started.

since I began shopping, ING, ED, and GMAC bank have always been in the discussion. the only "newcomer" for me was HSBC (not because they haven't always been competitive, they just never appeared near the top of Bankrate's list back when I first began looking).

Originally Posted by CRFSaver

GMAC also has a program that is not FDIC insured called demand notes that pay about 5.25% right now but again there iss the risk you would become a general creditor of GMAC. Of course GMAC is immensly profitable. It is the car manufacturing operation that is pulling it down. Most likely GMAC would be sold or spun off before or during a GM bankruptcy.

CRFSaver, the demandnotes site seems to indicate only employees, their families, and shareholders have access to the program. Do you know if this is a hard and fast rule or do they let anyone with the desire purchase? I ask because they are up to 5.75% now. (but riskier of course with no FDIC insurance).

[fratkid21]

Rex -

please read my last thread in the forum:

HSBC Direct $25 Bonus vs Emigrant Direct Bank (Is ING even in the competition?)