ING has joined the rate raising crowd. Even though interest rates are projected to drop, banks are keeping their rates steady, or even raising them. I'm not complaining.
That trend seems to be continuing. ING Direct raised the rates on its 12 month CD and its 18 month CD by 25 basis points (quarter of a percentage point) making them more competitive. It also raised the rate on the top tier (above $100,000 in balances) of its Electric Orange Account.
The parent company of ING Direct, ING was recently bailed out by the Dutch goverment to the tune of $13 billion. ING has major insurance and commercial banking operations. The retail bank has $338 billion euros in savings and current-account deposits at the end of last year, making it one of the world’s largest retail banks.
Sovereign Bank was quietly purchased by Banco Santander after a run caused it to face collapse. More of this is coming even with the government bailout.
Sovereign Bank was quietly purchased by Banco Santander after a run caused it to face collapse. More of this is coming even with the government bailout.Sovereign has a large franchise in New England. It's always been the #3 bank in the region and many thought that it was vulnreable.
In the last quarter the FDIC said customers pulled $4.2 billion, or almost 9 percent of deposits from the bank before the government's $700 billion government rescue plan. The Boston Globe spells out the last days of the bank as in independent entity, including the State of Massachusetts withdrawing $300 million in funds as Sovereign stock dropped and the bank looked increasingly shaky.
"When Massachusetts treasury officials called Sovereign to ask why the stock had fallen below $3, they couldn't get a good answer, said Cahill, the Massachusetts treasurer. Bank officials were attributing the drop to the market's overall plunge; the Dow Jones industrial average fell 777 points, its worst one-day point loss, after the first version of the bailout bill failed to pass.
The state Treasury had a total of $575 million at Sovereign. Of that, $275 million was for state operations, money that was collateralized, or insured against any losses. But the other $300 million, which covered a number of programs, was uninsured.
The treasury staff first started worrying about the stock price at about 2 p.m. By 2:55 p.m., it had advised Cahill that the state should move the funds. "I said, 'Do it,' " Cahill recalled.
And within 20 minutes, the funds were wired out - not to another bank, but to Fidelity, the Boston investment giant that manages $7.5 billion in state and municipal funds in a money market account."
The run would have resulted in failure but the FDIC intervened and had Banco Santender, an existing shareholder buy the rest of the company for approximately $1.2 billion.
In response, the FDIC has decided to provide unlimited protection through 2009 for non- interest bearing accounts that process payments for payrolls and are used by businesses.
Even though the Fed dropped rates last week by 1/2 percent, GMAC raised the rate on their online savings acccount from 3.5% APY to 3.75% APY.
Even though the Fed dropped rates last week by 1/2 percent, GMAC raised the rate on their online savings acccount from 3.5% APY to 3.75% APY. This places their account amongst the Top 10 best online savings account rates according to the BestCashCow rate tables.
From all accounts, opening an account at GMAC is easy and straight-forward. You can fund your account via an account-to-account transfer and they use an initial trial deposit to verify your ownership.
GMAC is rated 3 1/2 starts according to the latest Bauer Financial analysis but the company has come under stress due to the credit meltdown. It's residential mortgage arm, Residential Capital (ResCap) is relying on the Treasury Bailout plan to keep it solvent.
It's this pressure which probably led it to raise rates in its efforts to keep and attract new deposits.
Remember, as with any institution to keep your deposits amounts below the FDIC insurance limits.
