GE Capital Bank or GE Capital Retail Bank: Which GE Subsidiary Bank Should You Use?

Editor's Note: As of 2017, neither the former GE Capital Bank nor GE Capital Retail Bank are subsidiaries of GE. GE Capital Bank has been sold to Goldman Sachs and is currently branded as Marcus. GE Capital Retail Bank has been spun out from GE and is now Synchrony Bank.

GE Capital Bank launched in late June 2013. Its name is easily confused with GE Capital Retail Bank, which launched in January 2013 following the acquisition of MetLife Bank’s online deposit business.

The two businesses, both within the GE Capital umbrella, are completely independent from a governance standpoint, and more importantly from a depositor perspective covered by separate FDIC insurance policies:

1. GE Capital Bank, which was not in the retail deposit-taking business prior to June, 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. GE Capital Bank principally lends money to small and medium sized businesses in the US. BestCashCow’s own information indicates that the bank is licensed in Utah, and has assets of almost $15 billion.

2. GE Capital Retail Bank, which was not in the retail deposit-taking business prior to January’s MetLife acquisition, was established with FDIC insurance in 1988 (FDIC Certificate # 27314), and is focused on providing customized credit programs to retailers and consumers. Its primary federal regulator is the Dept. of Treasury’s Office Office of the Comptroller of the Currency. BestCashCow’s database shows this to be a much larger entity with assets of about $34 billion, also licensed in Utah.

While it seems odd that GE Capital would operate two separate internet banks that compete against each other, it is not entirely surprising. Since the Jack Welch era, GE Capital has encouraged its divisions to compete with each other for deals. The premise behind such competition is that it creates the best possible terms for the consumer.

The challenge here of course is that GE Capital’s two banks are competing not just against each other, but also against a full array of incumbent, branded online banks that are geared to the retail deposit-taking. With no recent history in addressing the savings and CD with the outstanding service that banking consumers requires, a better strategy could be to build a single lasting brand – perhaps one evoking the fortitude of the GE brand and perhaps not - with a focus on providing excellent customer service like their competitors have done (see Personal Savings by American Express, Ally Bank, CIT Bank).

And, ultimately, this is what GE Capital may wind up finding that it needs to do, merging the two entities together in a single entity. Until that happens, both will likely continue to have very competitive rates and depositors can take comfort in the fact that both offer competitive savings and CD rates with full FDIC insurance (hence, you are fully insured to FDIC limits in each bank).

See the complete list of the best online savings rates or CD rates by clicking the appropriate tab above.