Ally & Marcus Dropping Some Interest Rates (Title Edited 8-8-19)

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MikeG62
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Ally & Marcus Dropping Some Interest Rates (Title Edited 8-8-19)

Post by MikeG62 » Mon Aug 05, 2019 2:58 pm

FYI - Just received an e-mail from Ally bank that they will be dropping the interest rate on their online savings account by 20bps tomorrow (from 2.10% to 1.90%). I'd be really surprised if the other banks with higher yielding online savings accounts (such as Marcus & Synchrony) do not follow suit.

In anticipation of moves like this (which seemed inevitable once the Fed pivoted), I've been reinvesting cash from maturing Treasuries in short-term CD's (12 months in duration) as well as no-penalty CD's (at both Ally and Marcus) to lock in current yields in these roughly 12-month duration instruments. Plan to continue doing that as I have more Treasuries maturing this month (hopefully before the rate on these products comes down too).

Edited on 8-8-19 to add:

Both Ally and Marcus dropped the rate overnight on their no-penalty CD's.

Ally dropped from 2.3% to 2.2% (same minimum opening deposit of $25K and same 11-month term), while Marcus had a slightly bigger change dropping the rate on their 13-month CD by 20bps (from 2.35% to 2.15%). Having said this, Marcus added two other variations on their no-penalty CD: an 11-month at 2.20% and 7-month at 2.25%.

In addition, Marcus also dropped the rate on their 12-month traditional CD from 2.50% to 2.40%. Ally is still at 2.50% on their traditional 12-month CD. The steep EWD penalty at Marcus (270 days interest) would prevent me from opening a 12-month CD with them anyway, but the rate reduction should be noted.
Last edited by MikeG62 on Fri Aug 09, 2019 12:50 pm, edited 2 times in total.
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mikeyzito22
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by mikeyzito22 » Mon Aug 05, 2019 3:19 pm

Yep. Not that I would use Personal Capital, but they cut from 2.35 to 2.05 today.

BlueCable
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by BlueCable » Mon Aug 05, 2019 3:21 pm

Yes -- just opened another Marcus No-Penalty today expecting rates to start dropping.

SuperGrafx
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by SuperGrafx » Mon Aug 05, 2019 3:23 pm

Discover Online bank just went to 2.00% today

They've been slowly dropping the rate over the past few weeks from 2.10% to 2.05%)

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Momus » Mon Aug 05, 2019 3:43 pm

Will park in Vanguard treasury money market instead.

Tdubs
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Tdubs » Mon Aug 05, 2019 3:50 pm

Opened another no-penalty CD at Ally today.

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SlowMovingInvestor
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by SlowMovingInvestor » Mon Aug 05, 2019 3:58 pm

Betterment is down to 2.44% (inclusive of 0.25% bonus forgetting on waiting list for checking).

Good rate, actually.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Tdubs » Mon Aug 05, 2019 4:02 pm

MikeG62 wrote:
Mon Aug 05, 2019 2:58 pm
FYI - Just received an e-mail from Ally bank that they will be dropping the interest rate on their online savings account by 20bps tomorrow (from 2.10% to 1.90%). I'd be really surprised if the other banks with higher yielding online savings accounts (such as Marcus & Synchrony) do not follow suit.

In anticipation of moves like this (which seemed inevitable once the Fed pivoted), I've been reinvesting cash from maturing Treasuries in short-term CD's (12 months in duration) as well as no-penalty CD's (at both Ally and Marcus) to lock in current yields in these roughly 12-month duration instruments. Plan to continue doing that as I have more Treasuries maturing this month (hopefully before the rate on these products comes down too).
Why did you get an Ally email, and I didn't?

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by MikeG62 » Mon Aug 05, 2019 4:31 pm

Tdubs wrote:
Mon Aug 05, 2019 4:02 pm
MikeG62 wrote:
Mon Aug 05, 2019 2:58 pm
FYI - Just received an e-mail from Ally bank that they will be dropping the interest rate on their online savings account by 20bps tomorrow (from 2.10% to 1.90%). I'd be really surprised if the other banks with higher yielding online savings accounts (such as Marcus & Synchrony) do not follow suit.

In anticipation of moves like this (which seemed inevitable once the Fed pivoted), I've been reinvesting cash from maturing Treasuries in short-term CD's (12 months in duration) as well as no-penalty CD's (at both Ally and Marcus) to lock in current yields in these roughly 12-month duration instruments. Plan to continue doing that as I have more Treasuries maturing this month (hopefully before the rate on these products comes down too).
Why did you get an Ally email, and I didn't?
That is question you should ask Ally bank.
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LinusP
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by LinusP » Mon Aug 05, 2019 4:33 pm

I haven't talked to Ally to confirm, but I'm guessing I didn't get an email because I have a $0 balance in my savings account.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by MikeG62 » Mon Aug 05, 2019 4:45 pm

Momus wrote:
Mon Aug 05, 2019 3:43 pm
Will park in Vanguard treasury money market instead.
I think you’d get a higher yield by “locking in” current rates in no-penalty CD’s (in this environment). As Treasury yields have been declining, new lower-yielding Treasuries are being bought to replace higher-yielding Treasuries that are maturing which should logically drive down the yield in that (and similar) funds.

This is why I have been reinvesting proceeds from maturing Treasuries in CD’s.
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greg24
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by greg24 » Mon Aug 05, 2019 4:55 pm

Vanguard Prime Money Market Fund current 7-day yield is 2.24%.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by harmoniousmonk » Mon Aug 05, 2019 5:23 pm

I just got the email with a 0.00 balance

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Ricchan » Mon Aug 05, 2019 6:12 pm

A 0.20% change in a single drop is pretty large compared to other drops in the past. Maybe this is a sign that the decrease in rates is accelerating?

Marcus had a drop from 2.25% to 2.15% in June.
Synchrony had a drop from 2.25% to 2.15% in July.
Discover had a drop from 2.10% to 2.05% in July, then another drop from 2.05% to 2.00% in August.
Ally had a drop from 2.20% to 2.10% in June, then tomorrow's drop from 2.10% to 1.90%.

During this time, Vanguard Prime Money Market went from 2.40% at the start of June to 2.24% as of today.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by dustinst22 » Mon Aug 05, 2019 7:08 pm

high yield checking has remained steady at 3.3%

jayk238
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by jayk238 » Mon Aug 05, 2019 7:14 pm

Are we all seriously concerned about chasing .2- .24% points? Thats about 240 dollars in 100,000 invested!

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by MikeG62 » Mon Aug 05, 2019 7:18 pm

dustinst22 wrote:
Mon Aug 05, 2019 7:08 pm
high yield checking has remained steady at 3.3%
What is the cap on the balance they will pay 3.3% on?
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by MikeG62 » Mon Aug 05, 2019 7:25 pm

jayk238 wrote:
Mon Aug 05, 2019 7:14 pm
Are we all seriously concerned about chasing .2- .24% points? Thats about 240 dollars in 100,000 invested!
Well, when there are many hundreds of thousands of dollars involved, it adds up. Second, if the option is keeping the funds in an online savings account or MMF with a variable rate in a decreasing rate environment vs. a no-penalty 11 or 13-month CD, where you can lock in current rates, I think the delta between the rates will end up being a lot larger than 0.20-0.24bps over the 11 or 13-month period.
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by dustinst22 » Mon Aug 05, 2019 7:43 pm

MikeG62 wrote:
Mon Aug 05, 2019 7:18 pm

What is the cap on the balance they will pay 3.3% on?
25 K, but they allow more than one account (I have 2 synched together, instant transfers).

jeff622859
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by jeff622859 » Mon Aug 05, 2019 7:46 pm

Does ally have a minimum you have to keep in your savings account? I may just put it all in a no-penalty ally CD.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by abyan » Mon Aug 05, 2019 8:09 pm

MikeG62 wrote:
Mon Aug 05, 2019 7:25 pm
jayk238 wrote:
Mon Aug 05, 2019 7:14 pm
Are we all seriously concerned about chasing .2- .24% points? Thats about 240 dollars in 100,000 invested!
Well, when there are many hundreds of thousands of dollars involved, it adds up. Second, if the option is keeping the funds in an online savings account or MMF with a variable rate in a decreasing rate environment vs. a no-penalty 11 or 13-month CD, where you can lock in current rates, I think the delta between the rates will end up being a lot larger than 0.20-0.24bps over the 11 or 13-month period.
This is my thinking. And in any case, between my savings account (emergency money) and my tax account, I already have quite a tidy sum just sitting there at Ally. Why not lock in 2.3% in a no penalty CD, when the alternative is 2.1%, dropping to 1.9% and maybe even lower? It took me all of 15 seconds to set up 2 of the no penalty CDs moments ago (since I already have my money at Ally). It's a free lunch, so why not :)

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Tdubs » Mon Aug 05, 2019 8:24 pm

MikeG62 wrote:
Mon Aug 05, 2019 4:31 pm
Tdubs wrote:
Mon Aug 05, 2019 4:02 pm
MikeG62 wrote:
Mon Aug 05, 2019 2:58 pm
FYI - Just received an e-mail from Ally bank that they will be dropping the interest rate on their online savings account by 20bps tomorrow (from 2.10% to 1.90%). I'd be really surprised if the other banks with higher yielding online savings accounts (such as Marcus & Synchrony) do not follow suit.

In anticipation of moves like this (which seemed inevitable once the Fed pivoted), I've been reinvesting cash from maturing Treasuries in short-term CD's (12 months in duration) as well as no-penalty CD's (at both Ally and Marcus) to lock in current yields in these roughly 12-month duration instruments. Plan to continue doing that as I have more Treasuries maturing this month (hopefully before the rate on these products comes down too).
Why did you get an Ally email, and I didn't?
That is question you should ask Ally bank.
Email came in just before 8 pm EST. Maybe they go by the size of the account.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by whodidntante » Mon Aug 05, 2019 8:29 pm

Ally hasn't had a top rate in a long time, if ever. But money is sticky and most people will rationalize staying, which means there will still be an Ally Bank for now.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by prettybogle » Mon Aug 05, 2019 10:08 pm

Not sure why y’all are opening no penalty cd @ 2.3% for 25k minimum balance. We opened raise your rate cd @ 2.5% no minimum balance. 2 benefits with raise your rate - for 2 year, early withdrawal is 2 months and for 4 year, it is 4 months; also if the rates do go up (unlikely), 2 year will give one chance of getting higher rate and 4 year will give 2 chances.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by abyan » Mon Aug 05, 2019 10:54 pm

prettybogle wrote:
Mon Aug 05, 2019 10:08 pm
Not sure why y’all are opening no penalty cd @ 2.3% for 25k minimum balance. We opened raise your rate cd @ 2.5% no minimum balance. 2 benefits with raise your rate - for 2 year, early withdrawal is 2 months and for 4 year, it is 4 months; also if the rates do go up (unlikely), 2 year will give one chance of getting higher rate and 4 year will give 2 chances.
In my case, at least half my money I need to access next spring for taxes. And if I paid a two month penalty on it I’d be making less than I am in the 2.3% no penalty.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Ricchan » Mon Aug 05, 2019 11:34 pm

prettybogle wrote:
Mon Aug 05, 2019 10:08 pm
Not sure why y’all are opening no penalty cd @ 2.3% for 25k minimum balance. We opened raise your rate cd @ 2.5% no minimum balance. 2 benefits with raise your rate - for 2 year, early withdrawal is 2 months and for 4 year, it is 4 months; also if the rates do go up (unlikely), 2 year will give one chance of getting higher rate and 4 year will give 2 chances.
Ally does some weird things with their "raise your rate" cd rates. Back in April this year, their regular 1 year CD was at 2.75%, while their "raise your rate" 2 year CD was at 2.50%. Back in November of 2018 their 1 year was 2.65% vs a 2 year 2.60%. Their 1 and 2 year rates have actually been inverted since November 2018 until July 2019. None of the other banks I monitored during that time had 1-2 year inverted CD rates.

I haven't been keeping track of 4 year rates, so I can't comment on those.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by wade22 » Tue Aug 06, 2019 2:49 am

whodidntante wrote:
Mon Aug 05, 2019 8:29 pm
Ally hasn't had a top rate in a long time, if ever. But money is sticky and most people will rationalize staying, which means there will still be an Ally Bank for now.
I have a better rate one elsewhere that doesn't offer checking, so I keep a bit at Ally because I can transfer from savings to checking instantly. That lets me immediately prepare to pay multiple bills from checking, and I can use the debit card they gave me if I ever need cash from savings right away. They have a really good web interface too, it's my favorite out of any bank I've ever used. The better rate bank makes me like $35 extra a year, it's actually kinda petty in my case to not consolidate.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by MikeG62 » Tue Aug 06, 2019 6:50 am

prettybogle wrote:
Mon Aug 05, 2019 10:08 pm
Not sure why y’all are opening no penalty cd @ 2.3% for 25k minimum balance. We opened raise your rate cd @ 2.5% no minimum balance. 2 benefits with raise your rate - for 2 year, early withdrawal is 2 months and for 4 year, it is 4 months; also if the rates do go up (unlikely), 2 year will give one chance of getting higher rate and 4 year will give 2 chances.
A couple of thoughts.

The no-penalty CD is similar to an online savings account in that you can access the fund without penalty (outside of the initial six or seven day period after opening), except with an incremental 40bps of yield (2.3% vs 1.9%). I have opened many of them, so if I need to access some of the money I am not blowing up the entire CD. BTW, if you open them at Marcus, you can get 2.35% for 13-months vs. 2.30% for 11-months at Ally.

Second, you can get the same 2.5% in Ally’s 12-month traditional CD (I have been laddering those for a few months now). Sure, you don’t have the option of raising the rate, but you are getting no incremental yield for taking an extra year of term risk (and the likelihood of that rate increasing in the environment we are heading into is remote anyway). A rule of thumb (suggested by Larry Swedroe) suggests each additional year of term risk should get you at least an incremental 20bps of yield. In this case, it’s zero additional yield. In fact, the four year raise your rate CD also yields the same 2.50%. Having said this, a year from now the yield on 12-month CD’s may be well south of 2.5% (perhaps by a wide margin) and having gone with the longer term might end up having been the better option for some of your money.
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by StandingRock » Tue Aug 06, 2019 7:07 am

Anyone else remember getting 4 and 5 percent in a money market account at the local credit union?

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by AvidGardener » Tue Aug 06, 2019 8:07 am

Which bank has 3.3% high yield checking?

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Sigz » Tue Aug 06, 2019 8:15 am

I figured it would happen. Plan to see more of a drop (along with other to HYS offerings from other banks).

snowman
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by snowman » Tue Aug 06, 2019 8:19 am

I am with LMCU, 3% HY checking. Super easy to meet conditions. $15K cap.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by AvidGardener » Tue Aug 06, 2019 8:40 am

Snowman, Thank you for the info. We already have Redneck bank at 3% hy checking max of 10k with a few hoops. Now considering adding LMCU hy checking, thanks again

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Farmboyslim83 » Tue Aug 06, 2019 9:24 am

snowman wrote:
Tue Aug 06, 2019 8:19 am
I am with LMCU, 3% HY checking. Super easy to meet conditions. $15K cap.
+1. 5 minutes a month for 2 accounts.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Jack FFR1846 » Tue Aug 06, 2019 9:34 am

StandingRock wrote:
Tue Aug 06, 2019 7:07 am
Anyone else remember getting 4 and 5 percent in a money market account at the local credit union?
6.17% for the first $1k at DCU. Our family has 4 accounts with exactly $1k in each.

Otherwise, Redneck Megamoney is 2.4% up to $50k and if you feel like doing the hoop jumping with debit card charges, their checking account is 3%.

I got snail mail from Ally touting their 1.9% rate and how it's 20 times the average. I think I still have ten bucks in my Ally account.
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by dustinst22 » Tue Aug 06, 2019 10:48 am

AvidGardener wrote:
Tue Aug 06, 2019 8:07 am
Which bank has 3.3% high yield checking?
Heritage. I have 50 K with them (2 accounts, thinking about opening a 3rd). There is another called Orion with 4%, but I haven't bothered trying to switch banking.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by atdharris » Tue Aug 06, 2019 11:37 am

I have my savings at Amex, which pays 2.1%. No email from them yet about dropping rates, but I expect they will follow the lead eventually.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by HockeyFan99 » Tue Aug 06, 2019 2:50 pm

Since I could not find it explicitly discussed here or on Marcus's website, I called a rep and confirmed that you can open as many no penalty CDs as you would like. With a $500 minimum for the top rate (2.35%, 13 months), that allows for some additional flexibility for those wanting to park money but possibly needing to access some of it. Keeps it from being an "all or nothing" proposition if you do need to pull money out before the 13 months are up.
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by MortgageOnBlack » Tue Aug 06, 2019 2:55 pm

I plan on staying with Ally Bank (member since early 2012). The only gripe I've had with them is closing my checking accounts due to Square Cash activity (claimed I was using it for business use). This was easily circumvented by setting up a Simple account as a middleman bank.

Hopping ship for a very little money doesn't seem worth my time. Besides, if I truly want something different I'll move into IBonds.
Last edited by MortgageOnBlack on Tue Aug 06, 2019 3:03 pm, edited 1 time in total.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by roymeo » Tue Aug 06, 2019 3:01 pm

www.mysavingsdirect.com is still 2.4%.

This is the third name for the EmigrantDirect/DollarSavingsDirect account.
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by wade22 » Tue Aug 06, 2019 3:03 pm

Jack FFR1846 wrote:
Tue Aug 06, 2019 9:34 am
StandingRock wrote:
Tue Aug 06, 2019 7:07 am
Anyone else remember getting 4 and 5 percent in a money market account at the local credit union?
Otherwise, Redneck Megamoney is 2.4% up to $50k and if you feel like doing the hoop jumping with debit card charges, their checking account is 3%.
Wow, there is a squirrel with a lawnmower mowing cash that scrolls across the bottom of the screen with sound effects. I hate that they have better rates than either of my 2 savings accounts, when does it end? Join them for an extra .2%, they drop and CrackerPigSavings gets an extra .1%. I get sick of opening bank accounts. Makes for annoying taxes too, because you have to hunt down INT-whatevers for every bank you got interest from. I also did 2 bank offers this year and I regret it, I hope to live my life in a way that makes my taxes as simple as possible.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by MortgageOnBlack » Tue Aug 06, 2019 3:14 pm

wade22 wrote:
Tue Aug 06, 2019 3:03 pm
Jack FFR1846 wrote:
Tue Aug 06, 2019 9:34 am
StandingRock wrote:
Tue Aug 06, 2019 7:07 am
Anyone else remember getting 4 and 5 percent in a money market account at the local credit union?
Otherwise, Redneck Megamoney is 2.4% up to $50k and if you feel like doing the hoop jumping with debit card charges, their checking account is 3%.
Wow, there is a squirrel with a lawnmower mowing cash that scrolls across the bottom of the screen with sound effects. I hate that they have better rates than either of my 2 savings accounts, when does it end? Join them for an extra .2%, they drop and CrackerPigSavings gets an extra .1%. I get sick of opening bank accounts. Makes for annoying taxes too, because you have to hunt down INT-whatevers for every bank you got interest from. I also did 2 bank offers this year and I regret it, I hope to live my life in a way that makes my taxes as simple as possible.
I refuse to open an account with a bank that sounds like a bad lottery scratch ticket game

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by wade22 » Wed Aug 07, 2019 12:17 am

MortgageOnBlack wrote:
Tue Aug 06, 2019 3:14 pm
I refuse to open an account with a bank that sounds like a bad lottery scratch ticket game
That's just the name of the account, but "Redneck Bank" doesn't exactly inspire confidence either. It's a theme bank, never seen anything like it. They have a more professional-looking parent bank site with the same stuff, but it doesn't look super reputable either. Reminds me of how online casinos would have alternate names and re-skins of the same casino to appeal to different people.

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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by White Coat Investor » Wed Aug 07, 2019 2:52 am

MikeG62 wrote:
Mon Aug 05, 2019 2:58 pm
FYI - Just received an e-mail from Ally bank that they will be dropping the interest rate on their online savings account by 20bps tomorrow (from 2.10% to 1.90%). I'd be really surprised if the other banks with higher yielding online savings accounts (such as Marcus & Synchrony) do not follow suit.

In anticipation of moves like this (which seemed inevitable once the Fed pivoted), I've been reinvesting cash from maturing Treasuries in short-term CD's (12 months in duration) as well as no-penalty CD's (at both Ally and Marcus) to lock in current yields in these roughly 12-month duration instruments. Plan to continue doing that as I have more Treasuries maturing this month (hopefully before the rate on these products comes down too).
Prime MMF paying 2.27% right now, but that will certainly gradually drop over the next 90 days. Probably not to 1.9% though.
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Tdubs » Wed Aug 07, 2019 4:05 am

wade22 wrote:
Wed Aug 07, 2019 12:17 am
MortgageOnBlack wrote:
Tue Aug 06, 2019 3:14 pm
I refuse to open an account with a bank that sounds like a bad lottery scratch ticket game
That's just the name of the account, but "Redneck Bank" doesn't exactly inspire confidence either. It's a theme bank, never seen anything like it. They have a more professional-looking parent bank site with the same stuff, but it doesn't look super reputable either. Reminds me of how online casinos would have alternate names and re-skins of the same casino to appeal to different people.
It is FDIC. Why worry?

3-20Characters
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by 3-20Characters » Wed Aug 07, 2019 5:20 am

I love ally’s website and their no penalty cd. After the email, I moved some money to ally savings from an outside account to bolster my balance in anticipation of opening another no penalty cd—which took me about 1 minute to open this morning. Easy peasy and I’ll get 2.30% on that chunk now. I keep enough for a few months of bills in savings/checking.

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MikeG62
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by MikeG62 » Wed Aug 07, 2019 5:53 am

White Coat Investor wrote:
Wed Aug 07, 2019 2:52 am
MikeG62 wrote:
Mon Aug 05, 2019 2:58 pm
FYI - Just received an e-mail from Ally bank that they will be dropping the interest rate on their online savings account by 20bps tomorrow (from 2.10% to 1.90%). I'd be really surprised if the other banks with higher yielding online savings accounts (such as Marcus & Synchrony) do not follow suit.

In anticipation of moves like this (which seemed inevitable once the Fed pivoted), I've been reinvesting cash from maturing Treasuries in short-term CD's (12 months in duration) as well as no-penalty CD's (at both Ally and Marcus) to lock in current yields in these roughly 12-month duration instruments. Plan to continue doing that as I have more Treasuries maturing this month (hopefully before the rate on these products comes down too).
Prime MMF paying 2.27% right now, but that will certainly gradually drop over the next 90 days. Probably not to 1.9% though.
Prime MMF is great - the highest yielding brokerage MMF I know of (and 15bps higher than Fidelity's equivalent premium MMF). Having said this, it's highly likely the current 2.27% yield is coming down as we move forward (certainly over the remainder of 2019 and probably into 2020 at least). Moving excess cash (money one does not anticipating needing access to for a while) to a CD (whether traditional or no-penalty) at least locks in the current rate for a period of time. It's almost certain to result in a higher yield over the term of the CD.
Real Knowledge Comes Only From Experience

Cheyenne
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by Cheyenne » Wed Aug 07, 2019 6:15 am

LinusP wrote:
Mon Aug 05, 2019 4:33 pm
I haven't talked to Ally to confirm, but I'm guessing I didn't get an email because I have a $0 balance in my savings account.
I just checked. They lowered mine to 1.9% and I have a balance. I did not receive a notification.

wade22
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by wade22 » Wed Aug 07, 2019 6:42 am

Tdubs wrote:
Wed Aug 07, 2019 4:05 am
wade22 wrote:
Wed Aug 07, 2019 12:17 am
MortgageOnBlack wrote:
Tue Aug 06, 2019 3:14 pm
I refuse to open an account with a bank that sounds like a bad lottery scratch ticket game
That's just the name of the account, but "Redneck Bank" doesn't exactly inspire confidence either. It's a theme bank, never seen anything like it. They have a more professional-looking parent bank site with the same stuff, but it doesn't look super reputable either. Reminds me of how online casinos would have alternate names and re-skins of the same casino to appeal to different people.
It is FDIC. Why worry?
Wouldn't be very worried, I know my money isn't ultimately at risk, I just would prefer to, ya know, not use shady looking banks. I think MySavingsDirect takes the cake for that one. Button advertisements for gold and home foreclosures on the homepage that looks like it was designed by me in highschool.

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roymeo
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Re: Ally Dropping Interest Rate on their Online Savings Account 8-6-19

Post by roymeo » Wed Aug 07, 2019 12:55 pm

wade22 wrote:
Wed Aug 07, 2019 6:42 am
Wouldn't be very worried, I know my money isn't ultimately at risk, I just would prefer to, ya know, not use shady looking banks. I think MySavingsDirect takes the cake for that one. Button advertisements for gold and home foreclosures on the homepage that looks like it was designed by me in highschool.
Well that's because it's the reskinned Dollar Savings Direct, which was the reskinned Emigrant Direct site.

I've chased the rates through them, nice that the UI model doesn't change.
The sewer system is a form of welfare state. | -- "Libra", Don DeLillo

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