Ally Bank 11 month [No-Penalty CD]

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whatever
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Re: Ally Bank raises 11 month ($25k min) No Penalty CD from 1.5% to 1.6%

Post by whatever »

I opened an 11 month No Penalty CD with Ally on Nov 11, @ that time the interest was 1.5%. I didn't get around to funding it until Dec 11. Not only is the maturity date Nov 11 but they gave me the newer 1.6% rate. I thought, kind of cool on Ally's part not having me close it at 1.5% and then opening a new one at 1.6%. :happy
AllenSmith
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Re: Ally Bank raises 11 month ($25k min) No Penalty CD from 1.5% to 1.6%

Post by AllenSmith »

I called, and Ally was able to roll my 1.5% CDs into 1.6% ones (and I don't have any other Ally savings/checking accounts). Took 15 minutes.
dollarsaver
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Re: Ally Bank raises 11 month ($25k min) No Penalty CD from 1.5% to 1.6%

Post by dollarsaver »

AllenSmith wrote: Mon Dec 11, 2017 12:29 pm I called, and Ally was able to roll my 1.5% CDs into 1.6% ones (and I don't have any other Ally savings/checking accounts). Took 15 minutes.
Did they show up on-line right away? They told me it takes 2-3 business days to reflect on-line.
Bwlonge
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Re: Ally Bank raises 11 month ($25k min) No Penalty CD from 1.5% to 1.6%

Post by Bwlonge »

This may be the wrong thread to hijack, but why the heck does anyone put money into CDs? No risk, a few hoops to pay attention to, but wouldn't even a marginal increase in risk yield more than .35%, which is the difference between this CD and ally savings? Am I missing something?
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VictoriaF
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Re: Ally Bank raises 11 month ($25k min) No Penalty CD from 1.5% to 1.6%

Post by VictoriaF »

Bwlonge wrote: Mon Dec 11, 2017 1:02 pm This may be the wrong thread to hijack, but why the heck does anyone put money into CDs? No risk, a few hoops to pay attention to, but wouldn't even a marginal increase in risk yield more than .35%, which is the difference between this CD and ally savings? Am I missing something?
These are no-penalty CDs. For as long as they are paying more than savings accounts, it's worth to keep money in these CDs. If savings accounts start paying more, Ally will also raise CD rates, and we will roll money into new CDs.

As a side note, I have just learned about 2.25% CDs in Navy Federal Credit Union. I will have to close one or two 1.6% Ally CDs to put money into Nave Fed.

Victoria
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jcf
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Re: Ally Bank raises 11 month ($25k min) No Penalty CD from 1.5% to 1.6%

Post by jcf »

NFCU does not have "No Penalty" CDs as far as I can tell. Seems to be the fixed term CD offering. An event like this (increase in rate) makes "No Penalty CDs" attractive.
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VictoriaF
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Re: Ally Bank raises 11 month ($25k min) No Penalty CD from 1.5% to 1.6%

Post by VictoriaF »

jcf wrote: Mon Dec 11, 2017 10:24 pm NFCU does not have "No Penalty" CDs as far as I can tell. Seems to be the fixed term CD offering. An event like this (increase in rate) makes "No Penalty CDs" attractive.
You are correct. Still, for me, NFCU's 2.25% penalty-prone rate beats Ally's 1.6% no-penalty rate. I am glad that I can close Ally's CDs without a penalty, and I am glad that NFCU will pay me more than Ally. And I am glad that I am retired and have time to learn about these offers and take advantage of them.

Victoria
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dollarsaver
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Re: Ally Bank raises 11 month ($25k min) No Penalty CD from 1.5% to 1.6%

Post by dollarsaver »

VictoriaF wrote: Mon Dec 11, 2017 10:28 pm
jcf wrote: Mon Dec 11, 2017 10:24 pm NFCU does not have "No Penalty" CDs as far as I can tell. Seems to be the fixed term CD offering. An event like this (increase in rate) makes "No Penalty CDs" attractive.
You are correct. Still, for me, NFCU's 2.25% penalty-prone rate beats Ally's 1.6% no-penalty rate. I am glad that I can close Ally's CDs without a penalty, and I am glad that NFCU will pay me more than Ally. And I am glad that I am retired and have time to learn about these offers and take advantage of them.

Victoria
Thanks for this info Victoria. I am jumping on this NWFU 2.25% CD. Have Savings Accounts opened already at NWFU so just have to do a transfer to them.
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batpot
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by batpot »

Rate has increased to 1.6%.

Given that it's No Penalty...might as well cash them out, and reinvest, right?
TravelGeek
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by TravelGeek »

batpot wrote: Tue Dec 12, 2017 11:39 am Rate has increased to 1.6%.

Given that it's No Penalty...might as well cash them out, and reinvest, right?
Right - covered in this thread: viewtopic.php?f=2&t=234037
wriley4409
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by wriley4409 »

Maybe, but don't forget that they will add a bonus of 5 basis points to the new rate if you allow a maturing CD to roll over to a new CD.
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sunny_socal
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by sunny_socal »

Why bother with a CD when there's a 1.5% Money Market account?

https://redneck.bank/mega-money-market/
Carl53
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by Carl53 »

sunny_socal wrote: Tue Dec 12, 2017 1:10 pm Why bother with a CD when there's a 1.5% Money Market account?

https://redneck.bank/mega-money-market/
I've had this account for a number of years, but it is limited to $35k, above which the interest rate drops to 0.5%.
jst
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Re: Ally Bank 1.25% 11 month with no EWP

Post by jst »

Looks like they're up to 1.6% for the 11 month, no penalty, $25,000+ variety.

I have some CDs maturing in a few weeks, and I'll probably convert over to these.
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Re: Ally Bank 1.25% 11 month with no EWP

Post by Longdog »

jst wrote: Wed Dec 13, 2017 8:27 am Looks like they're up to 1.6% for the 11 month, no penalty, $25,000+ variety.

I have some CDs maturing in a few weeks, and I'll probably convert over to these.
Plus you'll get the 0.05% kicker if you roll them into the new CDs.
Steve
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Re: Ally Bank 1.25% 11 month with no EWP

Post by jst »

I didn't know about that. Do you have more details?
chrisjul
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Re: Ally Bank 1.25% 11 month with no EWP

Post by chrisjul »

I believe the No Penalty rate for 11 months is actually 1.6%
J295
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Re: Ally Bank 1.25% 11 month with no EWP

Post by J295 »

Thanks to OP for the info

We keep some extra $$ at Amx Bank .... now 1.25% savings.
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Kevin M
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by Kevin M »

wriley4409 wrote: Tue Dec 12, 2017 1:07 pm Maybe, but don't forget that they will add a bonus of 5 basis points to the new rate if you allow a maturing CD to roll over to a new CD.
I'll take the 10 basis point bump right now over a 5 bps bump to an unknown rate 10 or 11 months in the future, but your point is worth factoring into your individual situation.

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Kevin M
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by Kevin M »

Carl53 wrote: Tue Dec 12, 2017 1:15 pm
sunny_socal wrote: Tue Dec 12, 2017 1:10 pm Why bother with a CD when there's a 1.5% Money Market account?

https://redneck.bank/mega-money-market/
I've had this account for a number of years, but it is limited to $35k, above which the interest rate drops to 0.5%.
Even if it weren't limited, 1.6% is better than 1.5%, and even if the rates were the same, convenience is a factor for those who already have Ally accounts. I believe there now is a savings account offering 1.65%, but 5 bps isn't worth the hassle (to me) of opening another account, especially since Ally is a great hub bank.

Kevin
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VictoriaF
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by VictoriaF »

Kevin M wrote: Wed Dec 13, 2017 8:07 pm Even if it weren't limited, 1.6% is better than 1.5%, and even if the rates were the same, convenience is a factor for those who already have Ally accounts.

Kevin
Hi Kevin,

If you have a NavyFed account, check out their 2.25% 15-months CDs. Like you, I try optimizing the use of the accounts I already have rather than opening new ones. NavyFed has good specials often enough to make it worthwhile to be a member.

Victoria
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Blues
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by Blues »

I closed out my existing 1.5% No-Penalty CD today and opened a new one with the higher rate. Hey, a few bucks here, a few bucks there...why not? Besides, who knows what the future rate will be when the first CD would have matured? If it goes down for some reason, we get some extra months at a higher rate.
loklav
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Ally 11 month CD with no penalty vs regular high yield saving account

Post by loklav »

Hi all,

I was looking at the 11 months CD at Ally's bank: https://www.ally.com/bank/no-penalty-cd ... 017b&hash=

1.60% for 11 months without any early withdrawal penalty... so what is the point of their regular high yield saving account at 1.25% ?
Once a CD is created, you can not add anymore money to it. Is there a limit to the number of CDs you can have?

Is there a catch in term of taxes or ... ?

More generally, what is your short term saving strategy between CD, high yield saving accounts, short term bonds and taxable brokerage account?
BogleMelon
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Re: Ally 11 month CD with no penalty vs regular high yield saving account

Post by BogleMelon »

The 1.60% CD has a minimum of $25K per CD. The saving account has no minimums
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Re: Ally 11 month CD with no penalty vs regular high yield saving account

Post by WanderingDoc »

BogleMelon wrote: Sat Dec 16, 2017 2:47 pm The 1.60% CD has a minimum of $25K per CD. The saving account has no minimums
Thats interesting. I always keep $50-200K in a USAA savings acct (yielding less than 0.2%) as a holding fund to buy real estate deals. Is there any problem with just throwing $25K into the Ally's CD every 3 months or so? I was always reluctant to use another bank, since it will only complicate things.
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Re: Ally 11 month CD with no penalty vs regular high yield saving account

Post by dollarsaver »

WanderingDoc wrote: Sun Dec 17, 2017 1:29 am
BogleMelon wrote: Sat Dec 16, 2017 2:47 pm The 1.60% CD has a minimum of $25K per CD. The saving account has no minimums
Thats interesting. I always keep $50-200K in a USAA savings acct (yielding less than 0.2%) as a holding fund to buy real estate deals. Is there any problem with just throwing $25K into the Ally's CD every 3 months or so? I was always reluctant to use another bank, since it will only complicate things.
I just opened five $25K Ally 1.6% CDs. If I need some money I will just redeem one and leave the other 4. Transferred money from a much lower earning savings account.
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sperry8
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Re: Ally 11 month CD with no penalty vs regular high yield saving account

Post by sperry8 »

I have both the Ally no Penalty CD @ 1.6% and the CIT Bank no penalty CD @ 1.55%. Higher interest than the money market/savings accounts and no penalty if I need the money. Everyone should do this if they meet the minimum. Always amazes me how much free money people leave on the table.
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Re: Ally 11 month CD with no penalty vs regular high yield saving account

Post by Wakefield1 »

The walk in banking Arlington Community Federal Credit Union has no penalty 15 month certificates but at 1.15% APY (regular ones are 1.25% APY) but the savings rates are only .1% to .4% tiers depending on the balance (rates may depend on having a total of all accounts of at least $75,000.)
I suppose it makes sense to pull most everything out of Savings/Money Market and buy no penalty certificates
209south
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Re: Ally 11 month CD with no penalty vs regular high yield saving account

Post by 209south »

Thanks for highlighting this! I've had $250k in the Ally Online Savings account for a couple years - their online service works very well for me - just set up 5 different $25k CDs to pick up 35bps of interest for the next 11 months. All told it took less than 5 minutes.
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Re: Ally 11 month CD with no penalty vs regular high yield saving account

Post by radiowave »

The Ally 11 month no penalty CD is an excellent tool in your cash management strategy. The only downside is the 6 day hold period and $25k minimum. This is an FDIC insured product up to the limit ($250k/person) and the online access to the CDs is excellent.
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jnk715
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Ally Bank 11 month No Penalty 1.75%

Post by jnk715 »

So I just switched my account 6 days ago to 1.60% for the no penalty cd at Ally. Now a new rate has been offered so I called. This is on deposits of $25,000 or more. :happy
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simplesimon
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Re: Ally Bank 11 month No Penalty 1.75%

Post by simplesimon »

Thanks for the heads up. Obviously they're trying to grow deposits, but I wonder how much new money actually comes in vs having to pay more for current deposits.
UpperNwGuy
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Re: Ally Bank 11 month No Penalty 1.75%

Post by UpperNwGuy »

I wonder what their business model is. The money they pay out has to come from somewhere...
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Re: Ally Bank 11 month No Penalty 1.75%

Post by Jack FFR1846 »

Thanks for the info. Just went in and transferred $25k from my Ally savings. I'm sure that's not what they intend with this product.
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simplesimon
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Re: Ally Bank 11 month No Penalty 1.75%

Post by simplesimon »

UpperNwGuy wrote: Tue Dec 19, 2017 7:50 am I wonder what their business model is. The money they pay out has to come from somewhere...
Very likely that its mortgage and auto loan business produces nice fees from securitization and sale. They recently acquired TradeKing and have offered me promotions to open an investment account hoping to generate fee income there in the long run. Combine that with relatively low overhead because of no branches and low number of FTE.
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Blues
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Re: Ally Bank 11 month No Penalty 1.75%

Post by Blues »

I closed out a 1.5% No-Penalty cd for the 1.6% rate within the last week...so with the "ten day, best rate guarantee" I should receive the highest rate offered during the period automatically.

Thanks for the heads up. I'll verify that it is in effect when the grace period ends. :beer
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VictoriaF
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Re: Ally Bank 11 month No Penalty 1.75%

Post by VictoriaF »

Blues wrote: Tue Dec 19, 2017 8:15 am I closed out a 1.5% No-Penalty cd for the 1.6% rate within the last week...so with the "ten day, best rate guarantee" I should receive the highest rate offered during the period automatically.

Thanks for the heads up. I'll verify that it is in effect when the 10 day period ends. :beer
I did the same and hope for the same. I had to close one of the 1.60% Ally CDs to move money into a 2.25% NavyFed CD. The NavyFed CD is not no-penalty but the difference in the rates is worth it.

Added later:
I checked my Ally account. I opened 1.60% CDs on 9 December, and today is 19 December. I don't know how Ally counts 10 days grace period, and so I sent them an SM asking if I will get the 1.75% rate automatically, or have to close old CDs and open new ones at a new rate.

Thank you, Bogleheads, for the heads up! If I am 1 day beyond the rate guarantee, I would have missed it.

Victoria
Last edited by VictoriaF on Tue Dec 19, 2017 8:28 am, edited 1 time in total.
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TravelGeek
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Re: Ally Bank 11 month No Penalty 1.75%

Post by TravelGeek »

Blues wrote: Tue Dec 19, 2017 8:15 am I closed out a 1.5% No-Penalty cd for the 1.6% rate within the last week...so with the "ten day, best rate guarantee" I should receive the highest rate offered during the period automatically.

Thanks for the heads up. I'll verify that it is in effect when the grace period ends. :beer
Procrastination “pays” for me ... I was finally going to switch my 1.3% no penalty CDs today before heading out of town for vacation.... now it is even better than expected. Nice!
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Blues
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Re: Ally Bank 11 month No Penalty 1.75%

Post by Blues »

It's both funny and kinda sad how worked up we get over these low rates. :mrgreen: :oops:

:sharebeer
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VictoriaF
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Re: Ally Bank 11 month No Penalty 1.75%

Post by VictoriaF »

Blues wrote: Tue Dec 19, 2017 8:53 am It's both funny and kinda sad how worked up we get over these low rates. :mrgreen: :oops:

:sharebeer
It's true! And it can be explained by some findings in cognitive psychology and behavioral economics. Specifically, experiments have shown that people get pleasure from any gains, no matter the amount; and get upset about losses, not matter the amount. Many small gains create more subjective pleasure than one large gain that is numerically higher than the sum of the small gains. And one large loss creates less regret than many small losses, even if the sum of the small losses is relatively small.

Ally is exploiting this psychological peculiarity by providing us with a series of small gains.

Victoria
Inventor of the Bogleheads Secret Handshake | Winner of the 2015 Boglehead Contest. | Every joke has a bit of a joke. ... The rest is the truth. (Marat F)
stlutz
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Re: Ally Bank 11 month No Penalty 1.75%

Post by stlutz »

Note that the 12 month CD rate is at 2.0 percent now and doesn't have the 25k minimum deposit like the no penalty 1.75 CD does.
AllenSmith
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Re: Ally Bank 11 month No Penalty 1.75%

Post by AllenSmith »

i just closed my 1.5% no penalty and opened a 1.6% no penalty....sheesh
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Blues
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Re: Ally Bank 11 month No Penalty 1.75%

Post by Blues »

VictoriaF wrote: Tue Dec 19, 2017 9:22 am
Blues wrote: Tue Dec 19, 2017 8:53 am It's both funny and kinda sad how worked up we get over these low rates. :mrgreen: :oops:

:sharebeer
It's true! And it can be explained by some findings in cognitive psychology and behavioral economics. Specifically, experiments have shown that people get pleasure from any gains, no matter the amount; and get upset about losses, not matter the amount. Many small gains create more subjective pleasure than one large gain that is numerically higher than the sum of the small gains. And one large loss creates less regret than many small losses, even if the sum of the small losses is relatively small.

Ally is exploiting this psychological peculiarity by providing us with a series of small gains.

Victoria
I agree wholeheartedly. It reminds me of how happy and self-satisfied I get when I find a simple piece of weight training equipment or other piece of gear for a nice discount even though the savings don't really have any practical meaning in the real world.

It's the thrill of the chase, not its actual conclusion that drives us.

I've learned to live with it. In the end I still end up getting the things I want and have some fun in the process. Life's too short to deny ourselves these simple (stupid) pleasures as long as they do no harm.
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Re: Ally Bank 11 month No Penalty 1.75%

Post by AllenSmith »

Blues wrote: Tue Dec 19, 2017 8:15 am I closed out a 1.5% No-Penalty cd for the 1.6% rate within the last week...so with the "ten day, best rate guarantee" I should receive the highest rate offered during the period automatically.

Thanks for the heads up. I'll verify that it is in effect when the grace period ends. :beer
oh - me too. please post back if you get the new rate. i'll do the same
hirlaw
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Re: Ally Bank 11 month No Penalty 1.75%

Post by hirlaw »

FYI -- Ally's 12 month CD is now 2.00%
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Blues
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Re: Ally Bank 11 month No Penalty 1.75%

Post by Blues »

AllenSmith wrote: Tue Dec 19, 2017 9:51 am
Blues wrote: Tue Dec 19, 2017 8:15 am I closed out a 1.5% No-Penalty cd for the 1.6% rate within the last week...so with the "ten day, best rate guarantee" I should receive the highest rate offered during the period automatically.

Thanks for the heads up. I'll verify that it is in effect when the grace period ends. :beer
oh - me too. please post back if you get the new rate. i'll do the same
I sent them a secure email to confirm, Allen...when I get a reply I'll share it with you here. Might be a day or two before they get back to me.
Carl53
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Re: Ally no penalty 11 month CD rate increased to 1.50% this morning

Post by Carl53 »

I see that it is 1.75% today.
Scooter57
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Re: Ally Bank 11 month No Penalty 1.75%

Post by Scooter57 »

Hi folks, It's been a while since I posted here. But I have been reading all along.

I had opened some of these 11 month no-penalty CDs on Dec 7. They told me the 10 days had expired and I had to close them and open new ones. It took me all of about 10 minutes to do this online. Just be sure you move the funds into an online CHECKING account, because the savings account is limited to 6 transactions per month and with all these rate changes, you might be closing these CDs in 11 days too. You can open the checking account in a few minutes online and immediately transfer the proceeds of the closed CDs into it. I did that the last time I closed a CD at Ally.

I've always been a huge fan of CD ladders, but it is getting really hard to justify buying any long CDs with short rates where they are now. And probably going up in the spring again.

Thanks again for all the great pointers I've received from people posting on this board over the years!
nolesrule
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Re: Ally Bank 11 month No Penalty 1.75%

Post by nolesrule »

At this point I'm going to take the interest rate risk and wait until January to switch my current no-penalty CD. The no-penalty CD only realizes the interest at maturity/closure. I have a fairly reasonable possibility of being in a lower tax bracket in 2018 and the savings in taxes on the current interest balance by moving it to next year will be greater than the additional interest I could earn in the remainder of 2017.
b4nash
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Re: Ally Bank 11 month No Penalty 1.75%

Post by b4nash »

No coincidence they waited until 11 days since the last increase. I accept their challenge and will close and re-open my CDs. 8-)
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