GMAC Bank Is Now Ally Bank

Published 6/1/09 (Modified 3/22/11)
By MoneyBlueBook

GMAC Bank Is Now Ally Bank

News Update: Is the New Financial Face Of GMAC Bank

As of mid-May 2009, GMAC Bank is now officially called Ally Bank. With a new aggressive marketing blitz on cable TV channels and via Internet ads, the new purple themed Ally Bank is embarking on a quest to rebrand its image and change the public's perception of its former beleaguered self. Touting the new banking persona as a new and better type of bank - an ally and friend to consumer customers of sorts, AllyBank.com's new banking slogan is - "No minimum deposits. No monthly fees. No minimum balance. No sneaky disclaimers."

Sporting a very impressive array of high yield savings accounts, money market accounts, and high interest CD rates, Ally Bank is hoping to win the public over with its dazzling new message and cache of revamped services. Looking back at its history, the bank formerly known as GMAC Bank has certainly had quite a rough and tumultuous ride to get to where it is today.

Ally Bank - Starting Anew With A Fresh New Name and Top Tier Rates

For those not in the know, Ally Bank used to be GMAC Bank, a bank built on the troubled and rather shaky foundations of GMAC Financial Services - the banking, savings, and financial lending arm of currently bankrupt American vehicle manufacturer General Motors (GM). Originally established as a lending authority to provide automotive financing loans to car buyers and auto dealerships of GM brand vehicles, GMAC has been hit particularly hard by the housing crisis and subprime mortgage meltdown. The resulting economic recession, coupled with surging unemployment rates and the collapse of consumer spending, which in turn has had a significantly negative impact on automobile purchases - have all severely hit the company's bottom line, pushing it to the abysmal financial brink.

On the verge of collapse, GMAC Financial was one of many financial institutions that ultimately converted itself from a loan issuer and servicer into a new bank holding company (dubbed GMAC Bank) to make itself eligible for the federal government's infamous taxpayer-funded Troubled Asset Relief Program (also known as TARP). But saddled under the burden of its toxic cache of bad lending decisions and struggling under the weight of its subprime home mortgage loans, not to mention the operational losses of billions of dollars, the converted GMAC Bank has since embarked on a rather valiant but desperate quest to save itself by building a new reputation as a legitimate deposit institution. To start anew and completely re-design its banking image, in the middle of May 2009, GMAC Bank dropped its own namesake moniker from its brand, officially changing its name to Ally Bank in order to shed the reputational baggage of its former connections. Only time will tell whether the newly minted Ally Bank's ambitious plans will prosper and succeed.

For now at least, Ally Bank remains one of the top online banks in terms of offering the best high interest savings account deals and high yield CD rate offers - pretty much continuing where GMAC bank left off. Despite its troubles, GMAC had always offered top interest rates for its banking products - and Ally Bank appears to be no different in this positive regard. Due mostly to its ambitious plans to establish itself as a leading and reputable provider of high interest banking products, if I had to project - I would wager that Ally Bank rates will likely stay perpetually high for quite some time. In terms of motivation to keep existing rates at their highest market peaks, Ally Bank's shaky past actually works in the favor of prospective consumers. Desperate to capture the attention of skeptical new customers and convince them into becoming loyal bank depositors, Ally Bank is likely going to have to keep its interest rates high to achieve its lofty new business acquisition and retention goals.

Ally Bank.com's New and Impressive High Interest Banking Products

Along with the notable name change, Ally Bank has also significantly improved its banking website and modified its product offerings to comport with the new and improved image. The company has made drastic upgrades to its customer service features - now offering zero wait time, 24 hours, 7 days a week telephone customer support (1-877-247-ALLY) - boldly plastering this new convenient feature on every page of its online banking website.

As the new name is supposed to conjure up images of a neighborly local credit union that's genuinely in tune with the needs of its customers, Ally Bank's former features and previous limitations have been re-worked and re-tooled to offer up a seemingly better banking experience. Eager to re-brand itself as an honest, straightforward, and transparent bank, the folks at Ally Bank have completely done away with all minimum deposit requirements, monthly fees, and minimum account balance charges. New Ally Bank customers are now free to deposit as little or as much as they wish into their new online savings or CDs, as all account deposits now enjoy the maximum interest rate offered regardless of balance. Here are some of the new and very compelling bank deals and offers from Ally:

  1. Online Savings Account - The high yield online savings account from Ally Bank earns a very high APY rate - much higher than its competitors.
  2. Money Market Account - With no account minimums and no monthly fees, the Ally Bank money market account with check writing privileges can be opened with as little as $1.
  3. Classic CD - The classic fixed interest certificate of deposit from Ally Bank with automatic renewal features is a high yielding CD with no monthly fees and no minimum deposit requirements. The CD account compounds interest daily for maximum rate earnings.
  4. No Penalty CD - The new and unique No Penalty CD offer from Ally Bank allows you to withdraw your money and put it anywhere, without the hassles or shortfalls of an early withdrawal penalty fee. This special CD account has no fees of any kind and offers high fixed rates with no minimum deposit requirements.

FDIC Insurance Guarantees and Protects Ally Bank Customers From Loss

If you remain unsure and uneasy about the safety and security of money deposited with Ally Bank - you're not alone. Despite the name change, Ally Bank is still essentially the same embattled GMAC Bank, but with a new shiny purple colored exterior and improved marching orders. Those who are concerned about the safety of their money in the event of a major run on the bank have good reason to be worried. Bank failures and financial instability are serious issues in this day and age, as several major banking institutions like IndyMac Bank and Washington Mutual have poignantly demonstrated in the past few months.

Fortunately, Ally Bank deposits are fully insured by the Federal Deposit Insurance Corporation (FDIC) up to the maximum coverage limits. FDIC insurance currently insures all of Ally Bank's certificate of deposit options, online savings accounts, and money market accounts up to $250,000 per depositor. Per recent changes with FDIC regulations, bank account deposits at FDIC insured institutions are now insured up to $250,000 through December 31, 2013. With FDIC insurance, your savings and accounts are completely guaranteed by the full faith and credit of the United States government to be safe from loss and protected in the event of any catastrophic banking failure or bankruptcy. So long as you stay within those limits, you will be fine.

As a former GMAC Bank customer myself, I woke up one day to find that my accounts had been converted over to the new Ally Bank. The conversion was surprising but not unwelcome as I rather like the new and improved features. As my new Ally Bank savings account rates have remained high and stayed the same, I have little to complain about. But don't take my word for it - if you are interested in Ally Bank, visit their new website at AllyBank.com and check it out for yourself.

For a more in depth critique and assessment of the newly renamed GMAC Bank, you may want to read my detailed Ally Bank review. Feel free to share your experiences and thoughts!

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12 Responses to “GMAC Bank Is Now Ally Bank” 

  1. Jason says:

    GMAC Bank was a pretty great bank back when I was an account holder and Ally Bank figures to be equally appealing as well. I haven't checked my GMAC online account for a long time since I bailed after all of the new banking troubles GM Motors was having -but might try checking it out now with all the new rate updates.

    As for the FDIC coverage assurance...yeah it is great and makes us all fee secure, but the fact we have to keep talking about FDIC and governmental protections to make us feel better about our banking system still makes me uneasy. Scary new world we're in.

  2. Gary Stuart says:

    Please keep in mind that in an emergency, access to your funds may be 3 to 5 business days away from the time that you actually NEED it. I contacted Ally to find out, in an emergency, how long it would take to transfer money from my Ally account to my commerical bank account with Bank of America. I was told "ACH's take anywhere from 3 to 5 business days to complete." When I think of 'emergency,' I'm not expecting to have to wait that long to access my money. Of course, they offered that I could implement a wire, but even then they said there would be associated fees -- both at Ally Bank AND at your own bank -- on the receiving end. So even though it will be faster, there is a high price to be paid. (Kiss your high interest earnings goodbye.).

    Their representative offered a partial workaround: also open a money market account, and get a Visa check cashing card. This card can then be used to access money in your money market. But FIRST you'd have to go online and transfer it between account. Also (and here's the 'but'), customers are only able to withdraw $500 a day. So if you need $501, this won't be the answer either. (Also consider associated ATM fees on both ends of the transactions. Again, kiss your interest earnings goodbye if you really need your money FAST.).

    Depending on how much interest you expect to earn, it might be best to keep your money local (not online), and accessible. Otherwise, you won't realize the mistake you made until you REALLY need to access your funds NOW.

  3. Jefferson Sweetney says:

    What's the deal with needing an instant ACH transfer turn around anyway? If your money is in a high yield savings account, the assumption is that it's there for high interest rate earning purposes...not for short term emergency fund needs. If you are worried about short term cash needs, keep the money in your brick and mortar retail bank and inside of your easily accessible checking account - not in an online only savings account, and most especially not in a bank like Ally that is only accessible online.

    Ally Bank and all of the other online Direct-style banks are best suited for high interest savings purposes...not for short term cash accounts where funds may be needed in a matter of hours. The 3-5 business days requirement for ACH shouldn't be that big of a deal for most

  4. Caleb says:

    Ally Bank pulls a harmless soft credit check when you open a CD classic or no penalty fee CD account. But Ally runs a hard credit check when you apply for an online savings account for the overdraft feature. I haven't confirmed this for certain but that's what I've read and have been told. Someone may want to look into this. But regardless, Ally's high rates may be worth the FICO credit score hit in my opinion. I know I personally didn't care as I just opened a high savings account with them!

  5. James says:

    I wouldn't touch those guys with a ten foot pole. The FDIC is pressuring banks with less capital to lower their rate so as not to impact the overall market for interest rates. Also, GM is now fully under the control of the US Government. There will almost certainly be interventions in the policies of Ally Bank because of this.

    Bottom line, look out for substandard rates and corporate confusion.

  6. Raymond says:

    Hi James,

    I've been a GMAC Banking customer for some time now. Now that they've converted themselves into Ally Bank, I haven't noticed any real negative changes. They've kept most of their high interest rates intact and have added on better customer service features. I'm saying this as an actual customer. Even when the new Ally Bank was still GMAC, it offered some of the best yields out there, and continues offering pretty impressive rates till this day.

    But as an aggressive interest rate chaser for my passive savings account, I've always sought out the highest rates whenever possible. I don't mind the so-called riskier banks either - so long as they are fully FDIC insured. Even in the worse case scenario with a run on the bank or a big time bank collapse, the FDIC has always ensured very remarkably peaceful turn arounds. There is usually very little lag time transitioning to the newly FDIC managed bank in the event of a bank failure - thus I'm not overtly concerned.

    Online banks such as Ally and GMAC are merely interest rate cash cows for me. I don't use them to handle my daily checking account needs, but merely to help me earn the maximum rates I can on my short term savings and CD's.

    However, I am curious to see if the FDIC will succeed in forcing rates down. I suspect TARP funded banks like Ally will argue that they need to offer these high rates to capture the deposits they need to grow their capital base.

  7. Gary Stuart says:

    The problem I have with the rediculous "3 to 5 days to process an ACH transaction" is that we live in a world of electronic communications. Funds are no longer popped in a paper envelope to another bank through the US Mail (which by the way, even paper-based Priority Mail takes only 2 days, but I digress).

    In the meantime, banks earn even more interest on your funds while their in 'float' between banks.

    So regarding ACH transfers, the longer the banks take to move your money from bank to bank, the longer they make interest off of your money. So your delay is their profit (cha-ching).

  8. Eleanor says:

    The Most important challenge GM faces is to win back the trust of the tax payers. Giving away billions of tax payer money is not going to go under good sights of the consumers

  9. Christopher U. says:

    Did anyone else notice a change in the savings rate? It is at 2.05% APY now. I swear it used to be higher... Closer to 3%...

  10. Katharyn says:

    @Christopher: If you had seen this chart last December you would have done like I did and locked everything into long-term CDs.... this chart has show the project rates plummeting from 4% last fall... http://mortgage-x.com/general/indexes/codi_rate_forecast.asp

    @Gary S: I totally concur!! I have had accounts at ING, and my credit union (Pen Fed) and these banks TRULY understand the world of and speed of electrons!!!
    ALLY however.... would not ACH my withdrawal because I was cashing into one of my CDs early (can you say "emergency"?), and then after offering to Wire Txfr for a fee, they called me back and said, 'Can't do that either. We'll mail you a check.' Here I am today, 12 days after requesting, 10 days after they mailed... and I still don't have the check.
    Upon calling with a need to address this... O.M.G.!!! You would think that they needed me to take a polygraph... Then they could not address it AT ALL because I did not have the woman's name who called me back to say "can't do" (because as it turns out, they COULD have!)... and since they don't know who to reprimand, they have to escalate it up THREE freakin' levels of bureaucracy (WTF?) BEFORE they could 'see what they could do'...and THAT of course won't happen before NEXT Friday... when I am sure (pray to God) to finally have my check anyway.

    THIS is customer service???? Holy crap!! Great rates COST YOU!!!

    ING... I'm comin' home!!

  11. Roy Harper says:

    @Caleb: Why does Ally feel they need to do a Credit Check at all? If I am going to trust THEM with my money to hold for me, I don't understand their percieved need to do a credit check on ME?

  12. Tera Mckeehan says:

    As the UK Government continues to negotiate the UK's major lenders in relation to commercial property this will without doubt significantly increase the amount of commercial lending business which is transacted. It does seem that financial institutions have been slow to open out their books and actively grow their lending books at realistic terms. Finally the market does seem to be opening out, clearly this issue has been increased because the falling commercial property prices, which now seem to have stabilized.

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