Considering Open Another Savings Account: GMAC or UFB
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I have four online savings accounts already (all join accounts with my wife): INGDirect, EmigrantDirect, HSBC, and Virtual Bank. INGDirect used to have all my deposits when it offered superior rates than other online banks did. Now it fell far behind with a 4.50% APY. At one time early this year, I put all our cash at Virtual Bank when it was hot. With an interest rate of 4.60%, it's only better than INGDirect and I only have a little over $100 with them now, just to keep the account alive (I am too lazy to close the account).Currently, EmigrantDirect and HSBC are our primary savings banks. Tied at 5.05% APY, there's no better or worse between these two. I have $300 automatically transferred to EmigrantDirect on every pay day (biweekly) and my TreasuryDirect account is linked to HSBC for weekly T-Bill purchases. Other than these, EmigrantDirect and HSBC are the same to me. I don't really care their interfaces, or whether they have easy to use web site, or if they offer any extra security features. Except once-in-a-while manual fund transfers, I don't even log into my accounts. I am only interested in rates, nothing else.
At 5.05% APY, they are OK, but not great. There are quite a few banks offers higher rates. For example, E-Loan has a 5.38% APY (did they have a 5.50% APY just a month ago?), but its $5,000 minimum amount to open an account isn't something that I like. I want to have the option to keep the account with a low minimum required balance so I can switch back and forth based on the rates. $5,000 is too high for this purpose. Actually, when I checked the rate list on BestCashCow.com, I found that there are only two banks offer high than 5.05% APY and require low minimum balance ($1,000 is the maximum I can accept). One is GMAC (5.25% APY, $500 minimum balance), the other is UFB Direct (5.32% APY, $1 minimum balance).
I have heard a lot about GMAC, but UFB Direct is relatively new to me. After a quick glance on their website, I found their Free ATM Reimbursement Program quite attractive. According to the policy, not only UFB Direct doesn't charge customers any fees to use other banks ATM to withdraw cash, it also reimburse fees imposed by other banks for using their ATMs. For the money market savings account, monthly reimbursement is $4.50 (probably good for only one withdraw, but it's enough as it will be only for emergency). On the other hand, GMAC doesn't have this policy and only offers check-writing ability, which I don't think is very essential for a savings account.
From what I see so far, UFB Direct appears to be a better option (higher rate, free ATM) than GMAC. The only problem is I know nothing about it. But as long as the deposit is FDIC insured, there isn't much to worry about. Probably I should go with UFB Direct.
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I use GMAC so here are some fun facts:
-They have check writing and debit card associated with their account. With free checks.
-You are limited to 6 free outgoing transfers per month. This includes transfers to other bank accounts or paying bills from the account. This also includes your check writing and debit card transactions. This does NOT include ATM transactions. If you surpass this 6, they hit you with a 10 dollar fee per violation.
-They reimburse you ALL ATM fees. I think it’s unlimited withdrawals without incurring charges. So I try to use cash most of the time to avoid the “6 limit” from above.
-It’s my main bank account. I’m pretty happy with it.
I believe GMAC does a hard check for new accounts.Read this link at here.
Sun, just a flying remark. You mentioned you have all joint accounts. ING says on it’s website that joint accounts and individual accounts are insured separately (each for $100,000)…I am not sure if this information will be helpful to you.
BD: If they also reimburse ATM fees, then that’s better than UFB as UFB only reimburse about $4.5 every month. Regarding the checking writing, I don’t think I will write a lot of checks.
Bob: Thanks for the information. I heard about the hard credit check by GMAC, but what I read from Fatwallet.com is that the hard check was at the early stage of the bank. Now it seems only soft pull is conducted recently. But I definitely want to find more about this. If they are still doing the hard pull, then I will go with UFB.
Golbguru: I am not so sure how the insurance will change anything. If you don’t use it (which I definitely don’t want to), you never know the real difference.