GE Capital is the newest entrant into online banking, having completed the acquisition of MetLife Bank's online bank and merged it into its retail bank on January 14, 2012.
BestCashCow first reported on an agreed acquisition by GE Capital of MetLife's online bank back in 2011. The acquisition was finally consumated on January 14, 2013. A GE press release that day announced: "GE Capital Retail Bank, a Federal Savings Bank, announced today that it finalized the acquisition of MetLife's deposit base and online deposits business. The deal adds approximately $6.4 billion in deposits, 40 employees, and an established online banking platform." Financial terms of the transaction, which has been approved by the Office of the Comptroller of the Currency (OCC), were not disclosed.
Other than the change in name, the acquisition should not be noticeable to MetLife customers. Margaret Keane, CEO of GE Capital Retail Bank and GE Capital’s Retail Finance business stated, “We will be able to leverage our existing infrastructure and capabilities to seamlessly integrate MetLife’s online deposit business and serve these valued customers.”
GE Capital is maintaining MetLife’s fairly competitive online savings rate, and they have added several CD products. All of the products offered by GE Capital Retail Bank can be reviewed here or on GE Capital Retail Bank’s own website. More new online products, some of which may be very competitive, are likely on the way. Dori Abel, Vice President of Communications for GE Capital Retail Bank, stated “We are focusing on integrating the business while continuing to offer the existing deposit products. We will gather additional consumer insights as our plans are to continue growing the deposits business with product offerings that customers value.”
Customers considering depositing money with GE Capital’s new online bank should be very careful not to confuse it with GE Capital’s commercial paper program, GE Capital Invest Direct, which continues to offer rates as high as 1.11% APY on deposits over $50,000. This program is unsecured debt (i.e., not FDIC insured) and offers a rate of return that is not competitive with other equivalent long term debt of GE and other corporations with similar credit. BestCashCow strongly recommends that retail consumers avoid this program.
Before depositing money consumers should compare all rates offered by GE Capital as well as review the best online savings rates and the best CD rates of other online and local banks.
BestCashCow recently launched two first of their kind online tools to help borrowers find banks that can provide the loans they need.
BestCashCow recently introduced two first of their kind online tools to help borrowers find banks that can provide the loans they need.
BestCashCow’s Bank Loan FirstStep provides borrowers with the ability to quickly find the top lenders in their local community, state and across the country for major loan categories, including: construction and development, commercial real estate, residential, auto, small business, farm, credit card, and commercial and industrial loans.
Bank Loan QuickCheck creates a lending profile for every FDIC insured institution that gives consumers an idea of where the bank focuses its lending efforts. The tool also compares lending profiles of banks within each state so that consumers can quickly see which banks stand out in terms of focusing on a certain type of loan category. Users can then contact the individual banks for specific information on loan rates.
"This is an excellent starting point for anyone looking to borrow money," said Sol Nasisi, president of BestCashCow. "For the first time, consumers can access loan profiles for all 7,181 FDIC banks and can compare banks to state averages to find which banks specialize in the types of loans they need. “This will save borrowers time and match them up with the right lenders. It’s a win-win for banks and borrowers."
Bank Loan FirstStep and QuickCheck were created using FDIC data. The company has begun work on extending QuickCheck and FirstStep to credit unions.
Online banks and small community banks have the best savings and CD rates, yet savers are putting more and more money into low rate big banks. BestCastCashCow analysis shows that that consumers across the country, and especially in states like AZ and CA can earn more just by switching their deposit dollars to a smaller, community based bank, or an online bank.
BestCashCow research has shown that smaller banks tend to offer CD rates that are on average .40 - .60 percentage points better than larger banks, while online banks tend to offer savings rates that are on average 0.60 percent better than non-online banks. To see how much potential consumers have to save more by switching accounts, BestCashCow examined the deposit patterns of savers across the country and in each state. The survey showed that despite this fact, consumers across the country have a majority of their money in big banks and offline banks and that trend is only increasing.
The largest banks >$100 billion in deposits have increased their consumer deposit share from 36% before financial crash to 43% today. Larger banks are getting larger while smaller banks are getting smaller or closing. This despite the fact that smaller banks offer better deposit rates. At the same time, Internet banks hold only 6% of total consumer deposits, depsite having some of the best savings rates.
Deposit Share by Size:
Category
2007 Share
2012 Share
< $1 billion
26%
23%
>$1 billion < $10 billion
18%
17%
> $10 billion
56%
59%
> $ 100 billion
36%
43%
States with the Most Deposit Potential
On a statewide basis in 2012, 66% of AZ’s deposits, 64% of Florida’s, and 61% of CA’s deposits are held by mega-banks. As BestCashCow research has demonstrated, large banks (>$10 billion in deposits), have lower rates than smaller banks (<%1 billion in deposits). Consumers in these states would benefit the most from shifting some of their deposits, especially CDs to smaller, community banks.
>100 billion
> 10 billion
< 1 billion
<10 billion > 1 billion
AK
46%
57%
13%
30%
AL
40%
53%
32%
14%
AR
12%
29%
45%
27%
AZ
66%
81%
6%
12%
CA
61%
80%
8%
12%
CO
36%
61%
22%
18%
CT
39%
73%
15%
12%
DC
81%
83%
12%
5%
DE
46%
71%
14%
15%
FL
64%
74%
13%
13%
GA
49%
56%
27%
17%
HI
0%
57%
6%
37%
IA
17%
19%
65%
16%
ID
44%
60%
24%
16%
IL
33%
45%
34%
20%
IN
30%
38%
27%
34%
KS
9%
19%
57%
24%
KY
32%
33%
44%
23%
LA
37%
53%
39%
8%
MA
36%
48%
23%
29%
MD
58%
72%
20%
8%
ME
23%
35%
42%
23%
MI
43%
67%
19%
15%
MN
29%
39%
50%
11%
MO
21%
36%
46%
18%
MS
15%
27%
40%
32%
MT
19%
19%
40%
41%
NC
57%
67%
16%
17%
ND
17%
19%
55%
26%
NE
11%
21%
56%
23%
NH
49%
60%
29%
11%
NJ
51%
72%
11%
16%
NM
36%
52%
44%
5%
NV
66%
72%
7%
21%
NY
56%
77%
9%
14%
OH
39%
65%
21%
14%
OK
6%
20%
50%
30%
OR
52%
72%
11%
16%
PA
30%
57%
21%
22%
RI
51%
66%
14%
21%
SC
44%
49%
26%
25%
SD
19%
21%
51%
29%
TN
33%
44%
40%
16%
TX
38%
55%
28%
17%
UT
36%
70%
28%
2%
VA
58%
60%
18%
22%
VT
0%
52%
28%
20%
WA
48%
64%
13%
24%
WI
14%
39%
46%
16%
WV
23%
31%
36%
33%
WY
19%
26%
49%
26%
States Where Consumers Are Best Maximizing Their Deposit Dollars
IA, NE, and ND have 65%, 56%, and 55% of their deposit dollars in banks with assets under $1 billion. Consumers in these states are best maximizing their deposit dollars based on bank size according to BestCashCow research.
Key Takeaways:
Only 6% of deposits are in online banks, which offer significantly higher savings rates. A large percentage of consumers could benefit by shifting some of their bank savings into online savings accounts. BestCashCow research has also shown that online savings rates have held up better than non-online CD or savings rates over the last year. Consumers should consider looking to online banks to boost yield.
Consumers across all states should consider shifting interest bearing money (especially CDs) from big banks to community banks in order to take advantage of the higher yield. In some states like AZ, and CA, significant money is being left on the table based just on the size bank consumers are choosing.
