Going into the middle of May 2013, certificate of deposit rates have not changed much with the average 1-year rate at 0.25 percent and the average 5-year CD paying out 0.80 percent, according to Bankrate.com. Clearly, what most banks are offering currently isn’t much to twitch an eyebrow over.
However, for those with a large amount of cash to deposit, at least over $25,000, then GE Capital may be worth looking at. Currently paying an interest rate of 1.05 percent for a 12-month CD commitment, the GE Capital opportunity is almost a quarter point above what the market average is currently offering savers. GE Capital is better known as General Electric Retail Bank, a recognized savings institution that provides savings accounts, CDs and money market accounts.
Unlike General Electric company corporate bonds, which are simply corporate loans to General Electric for an interest payment while the money is borrowed, GE Capital CDs are insured by the federal government, specifically the Federal Depositors Insurance Corporation, or FDIC.
Savers do have to deposit at least $25,000 per CD, and the funds need to be committed in one transaction, not multiple smaller amounts. Obviously, the opportunity doesn’t work too well for the average saver putting away only a $1,000 at a time. However, for those who want to save longer, GE also offers a 2-year CD that pays a bit more at 1.15 percent annually.
So, while a 1 percent payout isn’t necessarily going to make a given saver rich, it does make a different in interest earned over time versus something less, especially when the amount saved is over $25,000. In this regard, GE Capital should be looked at as an alternative for smart saving of assets that need to remain fairly liquid and easily reachable.