Ally Bank: No one can answer a simple question

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Blues
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Ally Bank: No one can answer a simple question

Post by Blues » Thu Aug 31, 2017 12:46 pm

I recently contacted Ally bank to ask why the interest on my most recently opened "no-penalty" cd was the same amount for the June to July cycle as it was for the July to August cycle.

I have received numerous emails and even a phone call (or two) and still have not received an answer to the question...nor heard from anyone that has a clue.

This is very disconcerting considering I have what I consider a decent chunk of change invested in their cd and money market products.

Since the rate does not fluctuate and the principal doesn't fluctuate and I have the interest transferred into my money market account monthly, I'd have thought that the answer might be as simple as "period 1 has x number of days, while period 2 has y number of days". If the number of days were equal it'd be a no-brainer but it seems as though the period from July to August would have one more day since June only had 30 days. One more day would seem to imply more interest.

Despite the fact that the amount of interest for one day is a pittance in the scheme of things, I find it very disturbing that a bank can't answer a simple query without having to receive correspondence and contacts from multiple folks who don't have a clue. Then they say that they'll provide an interest calculation (recalculation) sheet in the mail. So, now it's up to me to figure out what the amount of interest is supposed to be? :oops:

I've been very pleased with Ally for the past few years but I am rapidly losing my patience with this failure to communicate and am seriously considering going elsewhere for my banking needs.

Thanks for letting me vent.
“Tactics without strategy is the noise before defeat.” - Sun Tzu | "Everybody has a plan until they get punched in the mouth." - Mike Tyson

rjlusk
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Re: Ally Bank: No one can answer a simple question

Post by rjlusk » Thu Aug 31, 2017 12:57 pm

My guess is they calculate on 30/360 rather than actual/365. Meaning they default each full month to 30 days regardless if Feb (28 days) or July (31). Most mortgages work this way such as fixed rate loans with fixed payments, for example, if you pay $1,500 per month for your mortgage, fixed, it's $1,500 in Feb or July regardless of # of days.
Before Ditka was traded to the Eagles in 1967 basically because of a contract squabble, he famously said Halas "throws around nickels like manhole covers."

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Blues
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Re: Ally Bank: No one can answer a simple question

Post by Blues » Thu Aug 31, 2017 1:04 pm

rjlusk wrote:
Thu Aug 31, 2017 12:57 pm
My guess is they calculate on 30/360 rather than actual/365. Meaning they default each full month to 30 days regardless if Feb (28 days) or July (31). Most mortgages work this way such as fixed rate loans with fixed payments, for example, if you pay $1,500 per month for your mortgage, fixed, it's $1,500 in Feb or July regardless of # of days.
I recall the rep saying on the phone that they use 365 days for the year regardless of leap years.

What bugs me is that it's normal for every one of my other Ally cds, (which also deposit interest into the money market account on a monthly basis), to pay a few dollars more when the preceding month had 31 days vs. 30 (or less).

So, what's different this time, with this account? Apparently it's a mystery for the ages.
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zeugmite
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Re: Ally Bank: No one can answer a simple question

Post by zeugmite » Thu Aug 31, 2017 1:16 pm

At the end of the day, it's up to their backend software writers, internal auditors, and external regulators to make sure they've calculated everything right. While financial institutions tend to be among the more competent at math, I have seen enough to know that they also cut corners when there is an easier method of calculation rather than maintain some semblance or rigor or consistency.

In certain cases, I have received interest even on failed transfers -- that money basically was a gift from the bank. If it happened so often I think they'd discover it. Nobody is perfect.

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Blues
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Re: Ally Bank: No one can answer a simple question

Post by Blues » Thu Aug 31, 2017 1:37 pm

zeugmite wrote:
Thu Aug 31, 2017 1:16 pm
At the end of the day, it's up to their backend software writers, internal auditors, and external regulators to make sure they've calculated everything right. While financial institutions tend to be among the more competent at math, I have seen enough to know that they also cut corners when there is an easier method of calculation rather than maintain some semblance or rigor or consistency.

In certain cases, I have received interest even on failed transfers -- that money basically was a gift from the bank. If it happened so often I think they'd discover it. Nobody is perfect.
Completely agree and I'm generally a pretty reasonable and forgiving person.

I suppose I'm just frustrated by multiple contacts essentially saying the same thing..."we haven't a clue but we'll forward your request to someone else who will tell you the same thing". :mrgreen:
“Tactics without strategy is the noise before defeat.” - Sun Tzu | "Everybody has a plan until they get punched in the mouth." - Mike Tyson

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Re: Ally Bank: No one can answer a simple question

Post by HueyLD » Thu Aug 31, 2017 1:37 pm

OP,

When did you open and fund the CD?

If you opened the CD sometime in June, it is entirely possible that they credited you with 31 days of accrued interest because you started receiving interest on the account opening date not the day after.

Also, they calculate interest daily based on the balance in principal + accrued interest, i.e. daily compounding.

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Blues
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Re: Ally Bank: No one can answer a simple question

Post by Blues » Thu Aug 31, 2017 1:42 pm

When did you open and fund the CD? If you opened the CD sometime in June, it is entirely possible that they credited you with 31 days of accrued interest because you started receiving interest on the account opening date not the day after.

Also, they calculate interest daily based on the balance in principal + accrued interest, i.e. daily compounding.
I opened it on June 20th but was told that since it was in the evening it was past the cutoff for that date. That would seem to imply that interest was accrued from June 21.

My thinking, as a result, was that from June 21 to the 30th is 9 days and then another 20 days in July would be 29 days. Even an extra day of interest (from the 20th of June) would still be under the 31 days from July to August. Hence my confusion as to why the amounts are equivalent for unequal periods.

Where am I going wrong? I'd certainly appreciate being made aware of any error in my thought process.
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HueyLD
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Re: Ally Bank: No one can answer a simple question

Post by HueyLD » Thu Aug 31, 2017 1:54 pm

They have a different way of counting days.

For example, a CD opened on June 19 earned two days of interest on the 6/20/2017 statement because the interest accrued was $25000 x 1.35% x 2/365 = $1.84.

They would rather that you started receiving the interest on day one. As a result, you will not receive any interest on the maturity date.

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Blues
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Re: Ally Bank: No one can answer a simple question

Post by Blues » Thu Aug 31, 2017 3:30 pm

HueyLD wrote:
Thu Aug 31, 2017 1:54 pm
They have a different way of counting days.

For example, a CD opened on June 19 earned two days of interest on the 6/20/2017 statement because the interest accrued was $25000 x 1.35% x 2/365 = $1.84.

They would rather that you started receiving the interest on day one. As a result, you will not receive any interest on the maturity date.
Thanks, Huey. If that's the case it'd be nice if someone working for Ally might have been able to provide similar info. At the moment I'm batting .000 with their customer service.

As I mentioned, it's not the amount, which is negligible, but the fact that I couldn't receive an answer which is somewhat off-putting.

I appreciate your help. :beer
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Re: Ally Bank: No one can answer a simple question

Post by telemark » Fri Sep 01, 2017 2:52 pm

It's a simple question, but not an easy one. The calculation is done in software, probably provided by a third party. Anyone who claimed to give an answer would probably just be making something up to make you go away.

I once had a support rep relay a question from a customer who wanted to know how a certain calculation handled rounding. After some back and forth, I wrote some little test programs using the compiler in question and eventually decided that it was probably rounding "half to even", to a fixed number of decimal places.

https://en.wikipedia.org/wiki/Rounding# ... lf_to_even

I don't think anyone was particularly satisfied with that answer.

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Re: Ally Bank: No one can answer a simple question

Post by Blues » Fri Sep 01, 2017 4:03 pm

telemark wrote:
Fri Sep 01, 2017 2:52 pm
It's a simple question, but not an easy one. The calculation is done in software, probably provided by a third party. Anyone who claimed to give an answer would probably just be making something up to make you go away.

I once had a support rep relay a question from a customer who wanted to know how a certain calculation handled rounding. After some back and forth, I wrote some little test programs using the compiler in question and eventually decided that it was probably rounding "half to even", to a fixed number of decimal places.

https://en.wikipedia.org/wiki/Rounding# ... lf_to_even

I don't think anyone was particularly satisfied with that answer.
Thanks. You guys have really opened my eyes to the fact that what seemed a simple and direct question on my part may not have a simple and direct answer. I'll be a little more forgiving of the CS reps going forward. :beer
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kaneohe
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Re: Ally Bank: No one can answer a simple question

Post by kaneohe » Fri Sep 01, 2017 7:21 pm

Have you looked at the detailed info on the monthly statement. They give the statement period and also the number of days in the
period. Those should be self-consistent. On one of my CDs, the period is one day longer and the interest is proportionately more.
On the other the interest is more similar even tho the period is longer for one. Check the APYs for the 2 periods as that is the other variable.
Should be the same but you never know.

btw......your question might be more appropriately directed to a supe rather than a front-line rep.

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Re: Ally Bank: No one can answer a simple question

Post by Blues » Fri Sep 01, 2017 7:30 pm

kaneohe wrote:
Fri Sep 01, 2017 7:21 pm
btw......your question might be more appropriately directed to a supe rather than a front-line rep.
I've spoken to a supervisor, she had no clue but agreed with my take. The matter has been elevated three times since without satisfaction.

And so it goes...
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Re: Ally Bank: No one can answer a simple question

Post by tidelandp » Fri Sep 01, 2017 7:34 pm

I’ve questioned interest calculations on two occasions. I’ve learned that those able to answer that question usually work in a department separate from the service reps. It’s up to the rep to refer your question to that department. In the first instance, the bank applied an incorrect interest rate, which the service rep initially insisted was correct. After she finally agreed to refer my question, the appropriate department made adjustments and provided supporting worksheets. In the second instance, the rep readily referred my question after several failed attempts at backing into calculation. Some time later, I got an apparently perfunctory letter saying case was reviewed and interest found to be correct. That’s it. Kinda frustrating to realize the lack of transparency that can exist over something this basic.

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Re: Ally Bank: No one can answer a simple question

Post by Blues » Fri Sep 01, 2017 7:39 pm

tidelandp wrote:
Fri Sep 01, 2017 7:34 pm
I’ve questioned interest calculations on two occasions. I’ve learned that those able to answer that question usually work in a department separate from the service reps. It’s up to the rep to refer your question to that department. In the first instance, the bank applied an incorrect interest rate, which the service rep initially insisted was correct. After she finally agreed to refer my question, the appropriate department made adjustments and provided supporting worksheets. In the second instance, the rep readily referred my question after several failed attempts at backing into calculation. Some time later, I got an apparently perfunctory letter saying case was reviewed and interest found to be correct. That’s it. Kinda frustrating to realize the lack of transparency that can exist over something this basic.
The funny thing is that I've been arguing over principle and not really the small value of the interest.

(See what I did there? :wink: )
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Re: Ally Bank: No one can answer a simple question

Post by tidelandp » Fri Sep 01, 2017 8:14 pm

Blues wrote:
Fri Sep 01, 2017 7:39 pm
tidelandp wrote:
Fri Sep 01, 2017 7:34 pm
I’ve questioned interest calculations on two occasions. I’ve learned that those able to answer that question usually work in a department separate from the service reps. It’s up to the rep to refer your question to that department. In the first instance, the bank applied an incorrect interest rate, which the service rep initially insisted was correct. After she finally agreed to refer my question, the appropriate department made adjustments and provided supporting worksheets. In the second instance, the rep readily referred my question after several failed attempts at backing into calculation. Some time later, I got an apparently perfunctory letter saying case was reviewed and interest found to be correct. That’s it. Kinda frustrating to realize the lack of transparency that can exist over something this basic.
The funny thing is that I've been arguing over principle and not really the small value of the interest.

(See what I did there? :wink: )
It often comes down to principle. Customer-focused organizations that value their reputation recognize this. The interest discrepancy in my second instance was very small. The organization, a credit union in this case, always said they would backdate interest to when they initiated a withdrawal of funds from an external account; interest would start accruing then, regardless of when CU received funds for internal deposit. My question was really about their adherence to that stated policy. It was really about their integrity.

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Re: Ally Bank: No one can answer a simple question

Post by kaneohe » Fri Sep 01, 2017 9:29 pm

Blues wrote:
Thu Aug 31, 2017 12:46 pm
................................ the period from July to August would have one more day since June only had 30 days. One more day would seem to imply more interest.

...........................................
You seem to imply that you got shorted because the longer time period got the same interest as the shorter time period. Is it not possible that
you got more than "deserved" in the first period thus making the 2 periods more equal. Check the stated APY on your statement for the 2
periods. e.g. an APY of 1.55% for the first period is about 3+% more than the should be 1.50% APY. A 1 day difference in the statement periods
is also 3+% different. Thus a higher rate for shorter period and a lower rate for a longer period would be very similar.

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Re: Ally Bank: No one can answer a simple question

Post by Blues » Fri Sep 01, 2017 9:44 pm

kaneohe wrote:
Fri Sep 01, 2017 9:29 pm
Blues wrote:
Thu Aug 31, 2017 12:46 pm
................................ the period from July to August would have one more day since June only had 30 days. One more day would seem to imply more interest.

...........................................
You seem to imply that you got shorted because the longer time period got the same interest as the shorter time period. Is it not possible that you got more than "deserved" in the first period thus making the 2 periods more equal.
Yes, I actually brought that possibility up to them. It's not about the money. It's about understanding the methodology.
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kaneohe
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Re: Ally Bank: No one can answer a simple question

Post by kaneohe » Fri Sep 01, 2017 11:15 pm

Blues wrote:
Fri Sep 01, 2017 9:44 pm
kaneohe wrote:
Fri Sep 01, 2017 9:29 pm
Blues wrote:
Thu Aug 31, 2017 12:46 pm
................................ the period from July to August would have one more day since June only had 30 days. One more day would seem to imply more interest.

...........................................
You seem to imply that you got shorted because the longer time period got the same interest as the shorter time period. Is it not possible that you got more than "deserved" in the first period thus making the 2 periods more equal.
Yes, I actually brought that possibility up to them. It's not about the money. It's about understanding the methodology.
In my case, the methodology is human error. Someone programmed 1 CD to be 1.55% in the first full month, then corrected it to 1.50% the second full month.
Yet overall since inception, everything seems ok. Or perhaps they were trying to make up for an underpayment in the 1st fractional half month before the next 2 full months in which case it would not be human error but human intent. Only discovered the 1.55% by looking at the detail on the monthly statement.
Last edited by kaneohe on Sat Sep 02, 2017 2:15 am, edited 1 time in total.

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Re: Ally Bank: No one can answer a simple question

Post by kaneohe » Sat Sep 02, 2017 2:14 am

Took another look at the statements for partial month for June and full months for July & August. Now it makes more sense.
For CD1, they used APY 1.50% for all 3 months; For CD2, they used APY 1.35%,1.55%, 1.50%. Looks like they didn't update the initial month
to 1.50% on CD2 (rate changed during the initial 10 days) and somebody decided that an empirical increase for 1 mo. to 1.55% would do an appropriate catch up for my particular situation
(10 days in initial month for CD2). .......so that's why the cumulative interest looks ok even tho June is low. The catch up for July makes it look similar to August which has 1 more day (for CD2). CD1 looks normal with Aug interest more than July.

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