bank rates

I’m A Big Fan Of GE Capital Retail IRA CDs

GE Capital Retail Bank logoLast fall, I expressed disappointment with the lack of CD rate deals under GE Capital Retail Bank’s OptimizerPlus Perks Rewards Program for loyal customers.

However, I was delighted to be a bank customer when my 3-year IRA Jumbo CD matured there last week.

The maturity date was particularly timely – the day GECRB, together with CIT Bank, grabbed the top spot for 60-month CDs on our CD Rates Leaderboard.

I elected to renew my CD for a 5-year term, at 2.25% APY.

Yet I kept my funds at GECRB for more reasons than simply the good rate.

First, the representative I spoke with said that, although I could, on the maturity date, instruct the bank to renew the full CD for five years (thereby locking in the 2.25% rate), I was permitted to change my mind any time before the expiration of the 10-day grace period.

For example, if I were to decide, a week after requesting the renewal, to move all or a portion of the funds into a more favorable promotional CD at another bank, GECRB wouldn’t object.

I appreciated her volunteering the possibility – one that, while I’ve never investigated the matter, I’m not sure many other banks would agree to, at least so readily.

More important, I like the GECRB IRA CD’s lenient early withdrawal provisions for oldsters.

Its CD disclosures provide that no penalty is imposed on early withdrawals “when an account is an IRA and the owner … reaches the age of 59½.”

According to bank reps, this means exactly what it says.

Provided you’re over 59½, you may withdraw all or part of your balance any time, penalty-free, for any reason, including taking an IRS-mandated required minimum distribution (RMD), establishing a higher-yielding CD elsewhere or even opening a better CD at GECRB.

Most banks I’m familiar with subject IRA CDs to the same early withdrawal restrictions as regular CDs, or limit penalty-free withdrawals to RMDs.

As I’ve warned before, though, always be wary of ambiguities and loopholes in early withdrawal rights.

Thus, GECRB’s disclosures muddy the waters a bit by flatly declaring “(y)ou have contracted to keep these funds on deposit until the maturity date.”

Plus, banks, with prior notice, generally may alter early withdrawal rights, even for outstanding CDs.

But GECRB seems to consider its IRA CD flexibility a selling point, so, hopefully, it won’t change it, particularly retroactively.

All in all, despite my desire to see more attractive perks from this bank, I still remain a satisfied customer.

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