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How to fund a CD with online bank??

Posted: Sat Mar 10, 2018 5:01 pm
by Megamill
Ok, I checked Ally Bank's website and they have a FAQ page and opening an account (savings, checking, or CD) seems pretty straight forward and fast, but how does one actually fund the account? Do you have to mail a paper check in?

Re: How to fund a CD with online bank??

Posted: Sat Mar 10, 2018 5:06 pm
by Pajamas
https://www.ally.com/do-it-right/bankin ... d-is-easy/
How Do You Fund an Ally Bank CD?

. . . Then, open your account online with any amount and simply send us a check or arrange to have your funds deposited electronically. . . .

Re: How to fund a CD with online bank??

Posted: Sat Mar 10, 2018 5:07 pm
by IowaFarmWife
I just helped my daughter set up a savings account with them, and we funded it out of her main bank account at our local brick and mortar bank.

Re: How to fund a CD with online bank??

Posted: Sat Mar 10, 2018 5:08 pm
by Megamill
nice find! thanks!

Re: How to fund a CD with online bank??

Posted: Sat Mar 10, 2018 5:38 pm
by Kevin M
Since you mention "paper check", that means you have a checking account. I would set up the non-Ally checking account at Ally as an externally linked account. This may require a couple of trial deposits into the checking account, but sometimes it can be done without this. This takes at most a couple of business days. You can then go to the Transfer web page at Ally, and initiate the transfer from the external checking account to Ally.

Kevin

Re: How to fund a CD with online bank??

Posted: Sat Mar 10, 2018 5:44 pm
by Kevin M
Also, I would set up a checking account at Ally, since this will be handy for all cash inflows and outflows. I would transfer the cash from the external bank into the checking account, then fund the CD from the checking account. Then when the CD matures, you can have the proceeds deposited into the Ally checking account if you don't want the CD to roll over. Having the checking account may not be necessary, but it's convenient, free, and no minimum balance. You may even find that you can eliminate the local checking account and consolidate banking at Ally.

Note that the CD rates at Ally are not very competitive for maturities beyond one year, and even for one year you must deposit at least $25K for the competitive rate of 2.00%. You can get slightly more than 2% on a 1-year Treasury, and if in a high-tax state, it's even higher after considering the state tax exemption on Treasuries.

Kevin

Re: How to fund a CD with online bank??

Posted: Sat Mar 10, 2018 6:10 pm
by mrb09
+1 on the checking -- I always transfer to/from Ally checking from outside accounts, then from Ally checking to Ally savings/CDs

Re: How to fund a CD with online bank??

Posted: Sat Mar 10, 2018 6:28 pm
by remomnyc
I funded Ally CD my providing my checking account information on-line and allowing them to pull the money.

Re: How to fund a CD with online bank??

Posted: Sun Mar 11, 2018 9:32 am
by Megamill
Kevin M wrote: Sat Mar 10, 2018 5:44 pm Also, I would set up a checking account at Ally, since this will be handy for all cash inflows and outflows. I would transfer the cash from the external bank into the checking account, then fund the CD from the checking account. Then when the CD matures, you can have the proceeds deposited into the Ally checking account if you don't want the CD to roll over. Having the checking account may not be necessary, but it's convenient, free, and no minimum balance. You may even find that you can eliminate the local checking account and consolidate banking at Ally.

Note that the CD rates at Ally are not very competitive for maturities beyond one year, and even for one year you must deposit at least $25K for the competitive rate of 2.00%. You can get slightly more than 2% on a 1-year Treasury, and if in a high-tax state, it's even higher after considering the state tax exemption on Treasuries.

Kevin
Is it possible to purchase a 1-year Treasury through our existing brokerage account? i.e. is this done like purchasing a stock or MF? I never looked into it at my brokerage company (one of the major US banks).

Re: How to fund a CD with online bank??

Posted: Sun Mar 11, 2018 3:28 pm
by Kevin M
Megamill wrote: Sun Mar 11, 2018 9:32 am Is it possible to purchase a 1-year Treasury through our existing brokerage account? i.e. is this done like purchasing a stock or MF? I never looked into it at my brokerage company (one of the major US banks).
Probably, but I don't know the details of your existing brokerage. I know it's very easy and free to buy Treasuries from Vanguard or Fidelity, either at auction or on the secondary market. Your brokerage should have a list of fees/commissions that spells it out, or you could just call them and ask.

Kevin

Re: How to fund a CD with online bank??

Posted: Sun Mar 11, 2018 3:52 pm
by mhadden1
I have had Ally MM and CDs for years. A while back they improved their speed on fund transfers - I think now it's 2 business days, I'd have to check - so I was happy about that. Over time their rates are normally competitive but seldom the very best.