GE Capital Retail Bank (formerly MetLife Bank) had another rate increase on its 4-year and 5-year CD and IRA CD rates. Its Jumbo 5-year CD APY was increased from 2.05% to 2.15%, and its Jumbo 4-year CD APY was increased from 1.70% to 1.80%. These require a $100,000 minimum deposit. The rates are 15 basis points lower for a $25,000 minimum deposit. These rates are listed on the bank’s CD rates page as of 2/11/2014.
Last August the bank came out with a special 1.15% APY 15-month CD. This is still available as of 2/11/2014. Minimum deposit is $2,000. This is an online only offer that requires that you enter the promo code BON12 in the online application. Details of the promotion are listed in the bank’s promotions page.
|2.35*%||$25k||-||Synchrony Bank||60 Month CD|
|OTHER TIERS: 2.30% → $2k - $25k|
|2.00*%||$25k||-||Synchrony Bank||48 Month CD|
|OTHER TIERS: 1.95% → $2k - $25k|
|1.65*%||$2k||-||Synchrony Bank||15 Month CD Special|
Early Withdrawals for CDs and IRA CDs
The bank’s CD early withdrawal penalties are fair. According to the bank’s account agreement:
For a CD with a term of twelve months or less, the penalty will be an amount equal to 90 days simple interest on the amount withdrawn at the current rate. For a CD with a term of more than twelve months, the penalty will be an amount equal to 180 days simple interest on the amount withdrawn at the current rate.
Another important thing to note in this account agreement is the early withdrawal penalties for IRAs. According to the account agreement (I highlighted the important part):
An early withdrawal, without penalty, is allowed only in the event of (a) ….. (b) ….. or (c ) when the account is an IRA and the owner dies, becomes permanently disabled or reaches the age of 59½; or (d) within the grace period.
I called the bank to confirm this and to see if they have any restrictions on this. According to an IRA specialist, they will allow an IRA customer who’s over the 59 ½ to close an IRA CD without penalty and open a new IRA CD with a higher rate.
Other Things to Consider
In my conversation with the IRA specialist, I was told that CDs can be funded with an ACH transfer, and the maximum amount is $500,000.
They do allow POD account beneficiaries for both regular and IRA accounts. I was told their standard form allows for a maximum of four beneficiaries, and the beneficiaries can be both persons and organizations (like charities). You can also open an account in the name of a trust.
New Competitive Savings Account
GE Capital Retail Bank recently made its savings account competitive. It’s called Optimizer+plus High Yield Savings, and it has a rate of 0.90% for all balances (as of 2/11/2014). One potential gotcha that I see is a $5 monthly fee if the balance falls below $50. Another downside is a small ACH transfer limit. I was told by the bank CSR that the maximum daily transfer limit is $50,000.
In January 2013 MetLife officially became GE Capital Retail Bank. As I mentioned in 2013, the products remained the same including the CDs, IRAs and money market accounts. In addition, they are still offering a free identity theft resolution service for deposit customers.
GE Capital Retail Bank’s main office is located in Draper, Utah. The bank has been around for awhile. It was established with FDIC insurance in 1988. However, it has not been in the retail deposit-taking business before the MetLife Bank acquisition. Its business focus has been on providing customized credit programs to retailers and consumers.
The bank has an overall health grade at EpBooks.us of an A+ with a Texas ratio of 7.27% (excellent) based on September 2013 data. Please refer to our financial overview of GE Capital Retail Bank for more details.
GE Capital vs. GE Capital Retail
One thing that’s confusing is that there are two GE Capital banks. The former MetLife Bank is GE Capital Retail Bank which I described above. GE Capital Bank is the other bank. It started offering an online savings account and CDs in May 2013. These are two separate banks, but both are part of the General Electric Company. They have separate FDIC certificate numbers (27314 for GE Capital Retail bank and 33778 for GE Capital Bank), and deposits in these two banks should be treated separately from a FDIC deposit insurance point of view.
GE Capital Bank also offers competitive rates, and unlike GE Capital Retail Bank, you don’t need large deposits to receive the best rates. These two banks appear to be competing with each other which seems strange since they’re under the same parent company. Nevertheless, this competition is good for us savers. I hope they don’t consolidate these two banks.
How These CD Rates Compare
For nationally available 5-year CDs without restrictions, CIT Bank has the highest rate with a 2.20% APY.
For nationally available 4-year CDs, NASA Federal Credit Union has a special 49-month CD with a 2.00% APY. However, GE Capital Retail Bank’s 1.80% APY is the highest rate for an internet bank. CIT Bank is just behind with a 1.75% APY.
These rates are accurate as of 2/11/2014.
To search for nationwide CD rates and CD rates in your state, please refer to the best CD rates section of EpBooks.us.