Looking today at Gmac CD rates, I noticed that their 12 month rate was over 4% which is not too bad. mind you this is as of 7/22/08. It looks like anything below the 12 months just drops to about 3.7% which is not too bad either. I was reading something earlier today that pointed out they had a special going on over 5% for just a short time. Sometimes you have to get in early on these deals or you miss out.
Why banks promote such a high rate for just a promotional deal is to get people to come into the banks, so then they can try to get them to sign up for a checking account or savings account. If they don’t have that then a lot of banks will also want to check on a persons current mortgage to try to get the investor to refinance if they have good credit.
Most likely the people investing money will have decent credit and that is what the banks are counting on. Lets hope we can see some increase not only in Gmac Bank CD’s but also in other banks stepping up and taking a little risk despite the economy. But it also raises another question. How long can some of these banks hold out while lending heavily in this economy?