Ally Bank savings interest rate dropping from 0.8% to 0.6%

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happydaze412
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by happydaze412 »

MikeG62 wrote: Fri Sep 25, 2020 7:13 am
happydaze412 wrote: Thu Sep 24, 2020 8:46 pm With 0% interest rates and savers getting decimated now with interest rates earning .6%. Fed target is inflation is 2% and they said they are okay running with a range of 2-3% inflation. With the money supply expanding. M2 money supply expanded from 15.5T to 18.4T. That is almost a 20% increase from February to today. Inflation is coming whether we like it or not.

https://www.statista.com/statistics/112 ... stock-usa/
Could be. Same prediction was made following the great financial crisis.

However, as you know, for the expanded money supply to drive inflation it needs to result in increased lending and spending. If it continues to sit idle in the banking system (which we know it is as evidenced by the ongoing dropping of rates by financial institutions, such as covered in this thread - they simply don't need the money so they don't need to incentivize people to place it with them on deposit), then it may well not.
I think inflation has been undervalued in all honesty. Some things got cheaper in terms of real purchasing power however others are disproportionately more expensive such as healthcare, housing, education, and currently the food due to shortages supply chain issues panic buying.
kbjeffrey
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by kbjeffrey »

shess wrote: Fri Sep 25, 2020 1:39 pm
kbjeffrey wrote: Fri Sep 25, 2020 10:55 am Simple is still offering .8% on their savings account, but I'm assuming that will go down too. I also have $5,000 at Anchor which is still offering 7.83% (on up to $5,000).
OK, for a sec you had my interest. 7.83% on $5k is equivalent to %.6 on $65k, or %.8 on $49k!

But I think you're referring to: https://www.anchorusd.com/
This seems a bit different than what Simple or Ally are offering.
You are correct about Anchor USD. It isn't the same as Simple or Ally. Still, the interest I'm getting on 5k is more than I'm making on 30k anywhere else, they deposit the interest to my account daily. Their app is well designed, provides all the info I need and transfers to and from my bank go through quickly. They are FDIC insured, although in a way that is new to me (see below).

---

How is AnchorUSD insured?

All standard USD balances are held as cash in pooled custodial accounts operated by a chartered, qualified custodial trust company. The trust company holds the funds at one or more banks insured by the Federal Deposit Insurance Corporation (“FDIC”). The custodial accounts have been established in a manner to provide eligibility for pass-through FDIC insurance up to the depositor coverage limit, which is currently $250,000 per individual.

Funds in AnchorUSD Interest Accounts are protected by AnchorUSD’s commercial criminal and cyber insurance policies. The policies insure against theft that results from a security breach or hack, employee theft, or fraudulent transfer.

Our policy does not cover any losses resulting from unauthorized access to your AnchorUSD account. It is your responsibility to use a strong password and maintain control of all login credentials you use to access AnchorUSD.
atdharris
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by atdharris »

KlingKlang wrote: Fri Sep 25, 2020 3:37 pm Just got an email from PurePoint that their on-line savings account rate is going down from 0.60% to 0.40%. I'll wait to see if they send me a birthday present next month and after that will likely close it.
Ouch. I guess it's entirely possible that 0.4% is the next step for Marcus/Ally/Amex
chipaway
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by chipaway »

patrick wrote: Fri Sep 25, 2020 1:06 pm Even before this drop, Ally was far from the best. There are plain deposit accounts paying 1% now (Chime, First Foundation, Affirm) and you can get 3% with some restrictions:

HMBradley pays 3% on balances up to $100,000. This account requires monthly direct deposit, and you must save 20% of all deposits measured quarterly (i.e. total withdrawals no greater than 80% of total deposits).

Liberty Savings Bank pays 3% on balances up to $25,000. This account requires making at least 12 debit card purchases per month.

Porte Bank pays 3% on balances up to $15,000. This bank is mobile-only and requires $1,000 in direct deposits in a month to qualify to open the savings account.

These deposit account at 3% have higher yields than you can get on low-risk bonds (except EE bonds, but those have their own limits).
HM Bradley looks interesting. I'm retired and wondering if automatically transferring a certain amount each month from another financial institution would qualify as a direct deposit. They don't have the answer on their website as far as I could find. And their chat window is not manned today apparently. It looks like it's meant for people still working who have their paycheck direct deposited.
patrick
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by patrick »

chipaway wrote: Sat Sep 26, 2020 12:59 pm
patrick wrote: Fri Sep 25, 2020 1:06 pm Even before this drop, Ally was far from the best. There are plain deposit accounts paying 1% now (Chime, First Foundation, Affirm) and you can get 3% with some restrictions:

HMBradley pays 3% on balances up to $100,000. This account requires monthly direct deposit, and you must save 20% of all deposits measured quarterly (i.e. total withdrawals no greater than 80% of total deposits).

Liberty Savings Bank pays 3% on balances up to $25,000. This account requires making at least 12 debit card purchases per month.

Porte Bank pays 3% on balances up to $15,000. This bank is mobile-only and requires $1,000 in direct deposits in a month to qualify to open the savings account.

These deposit account at 3% have higher yields than you can get on low-risk bonds (except EE bonds, but those have their own limits).
HM Bradley looks interesting. I'm retired and wondering if automatically transferring a certain amount each month from another financial institution would qualify as a direct deposit. They don't have the answer on their website as far as I could find. And their chat window is not manned today apparently. It looks like it's meant for people still working who have their paycheck direct deposited.
This seems to have the answer: https://faq.hmbradley.com/hc/en-us/arti ... t-deposit-
Jack FFR1846
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by Jack FFR1846 »

Redneck is still 0.80% but I would expect they'll drop soon too. And yes, I'm moving money from Ally over to Redneck. It's easy and if I get a couple more dollars, it's worth it to me.
Bogle: Smart Beta is stupid
chipaway
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by chipaway »

patrick wrote: Fri Sep 25, 2020 1:06 pm
chipaway wrote: Sat Sep 26, 2020 12:59 pm HM Bradley looks interesting. I'm retired and wondering if automatically transferring a certain amount each month from another financial institution would qualify as a direct deposit. They don't have the answer on their website as far as I could find. And their chat window is not manned today apparently. It looks like it's meant for people still working who have their paycheck direct deposited.
This seems to have the answer: https://faq.hmbradley.com/hc/en-us/arti ... t-deposit-
Thanks Patrick. Looks like I don't qualify.
All_About_Benjis
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by All_About_Benjis »

It's still not great, but Ally does have a 15-month CD at 0.8%: https://www.ally.com/go/bank/15m-select-cd/

We put in the last of our EF (~20%) in there on Thursday night. Our EF is more-or-less two years worth of expenses, and is now all in CDs at Ally. We have 80% of our CDs maturing early next year (at 1.7 and 2%). Thoughts on other things we could consider for that part of our EF?
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anon_investor
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by anon_investor »

All_About_Benjis wrote: Sat Sep 26, 2020 9:53 pm It's still not great, but Ally does have a 15-month CD at 0.8%: https://www.ally.com/go/bank/15m-select-cd/

We put in the last of our EF (~20%) in there on Thursday night. Our EF is more-or-less two years worth of expenses, and is now all in CDs at Ally. We have 80% of our CDs maturing early next year (at 1.7 and 2%). Thoughts on other things we could consider for that part of our EF?
Have you looked into Series I Savings Bonds?
BigMoneyNoWhammies
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by BigMoneyNoWhammies »

sapphire96 wrote: Thu Sep 24, 2020 1:33 pm Wow, how low can it go? Mediocre environment for savers.

What’s worse is that we can expect this environment for at least a couple of years as the Fed plans to keep its interest rates at 0% for that time.

What does not make sense is that I remember Ally offering almost 1% on their savings account when the Fed interest rates are at zero before they were raising rates a few years ago. Do I dare ask why is it different this time?
Part of the issue is there isn't demand for capital on the banks' end - they're relatively flush with cash, so they don't need higher rates to induce capital inflows through deposits.
All_About_Benjis
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by All_About_Benjis »

anon_investor wrote: Sun Sep 27, 2020 12:13 am
All_About_Benjis wrote: Sat Sep 26, 2020 9:53 pm It's still not great, but Ally does have a 15-month CD at 0.8%: https://www.ally.com/go/bank/15m-select-cd/

We put in the last of our EF (~20%) in there on Thursday night. Our EF is more-or-less two years worth of expenses, and is now all in CDs at Ally. We have 80% of our CDs maturing early next year (at 1.7 and 2%). Thoughts on other things we could consider for that part of our EF?
Have you looked into Series I Savings Bonds?
I have not, but I'll check them out.
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anon_investor
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by anon_investor »

All_About_Benjis wrote: Sun Sep 27, 2020 8:36 am
anon_investor wrote: Sun Sep 27, 2020 12:13 am
All_About_Benjis wrote: Sat Sep 26, 2020 9:53 pm It's still not great, but Ally does have a 15-month CD at 0.8%: https://www.ally.com/go/bank/15m-select-cd/

We put in the last of our EF (~20%) in there on Thursday night. Our EF is more-or-less two years worth of expenses, and is now all in CDs at Ally. We have 80% of our CDs maturing early next year (at 1.7 and 2%). Thoughts on other things we could consider for that part of our EF?
Have you looked into Series I Savings Bonds?
I have not, but I'll check them out.
https://www.bogleheads.org/wiki/I_savings_bonds

I started shifting my emergency fund to I Bonds this year. I wish I had done it sooner, but when no penalty CDs were paying over 2% there was no sense of urgency.
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Makaveli
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by Makaveli »

Glad I opened a no-penalty (NP) CD last January, 1-year @ 1.9%. Come January, I likely will move this money elsewhere for the highest bonus available.
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andronikus
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by andronikus »

happydaze412 wrote: Fri Sep 25, 2020 8:48 pm
I think inflation has been undervalued in all honesty. Some things got cheaper in terms of real purchasing power however others are disproportionately more expensive such as healthcare, housing, education, and currently the food due to shortages supply chain issues panic buying.
My housing, healthcare, and food costs are all up over the last year. And having just moved from a MCOL area to a HCOL area, I'm seeing the same thing again I saw 12 years ago: median housing price/median income ratios are completely out of wack. Home-buyers are adding multiple people to a loan to qualify.

Currently renting. If I buy at today's prices, I can almost guarantee I will work for the rest of my life.

And there is no guarantee the fed will not follow in Europe's footsteps and go negative.
All_About_Benjis
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by All_About_Benjis »

anon_investor wrote: Sun Sep 27, 2020 9:01 am
All_About_Benjis wrote: Sun Sep 27, 2020 8:36 am
anon_investor wrote: Sun Sep 27, 2020 12:13 am
All_About_Benjis wrote: Sat Sep 26, 2020 9:53 pm It's still not great, but Ally does have a 15-month CD at 0.8%: https://www.ally.com/go/bank/15m-select-cd/

We put in the last of our EF (~20%) in there on Thursday night. Our EF is more-or-less two years worth of expenses, and is now all in CDs at Ally. We have 80% of our CDs maturing early next year (at 1.7 and 2%). Thoughts on other things we could consider for that part of our EF?
Have you looked into Series I Savings Bonds?
I have not, but I'll check them out.
https://www.bogleheads.org/wiki/I_savings_bonds

I started shifting my emergency fund to I Bonds this year. I wish I had done it sooner, but when no penalty CDs were paying over 2% there was no sense of urgency.
Yeah...it looks like that's a good option for us to start rolling things into. The $20k limit will make it take a few years, but seems like a much better option than the currently available CDs.
andypanda
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by andypanda »

"How low can it go?" Funny you should ask.

I just checked Suntrust using my Richmond VA zip code. I still have a checking account with them that I opened in 1975 and a Visa card. They haven't changed their CD rates.

"6 Month CD 0.05% 0.05%
12 Month CD 0.05% 0.05%
18 Month CD 0.05% 0.05%
24 Month CD 0.05% 0.05%"

They've been calling me regularly for 3 or 4 years asking about what they can do to regain my business. Reopen the branch near my house? Increase CD rates? Lose that stupid Truist name?

The local credit unions are much better, as is one of the local banks.
mrtwstr
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Location: Connecticut

Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by mrtwstr »

Man I wish I'd seen this thread before the NP rate dropped. I've got almost a year of expenses in cash, no debt, and JUST stuck it all in Ally right before the drop.
BruinBones
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Re: Ally Bank savings interest rate dropping from 0.8% to 0.6%

Post by BruinBones »

Just as a comparison - Synchrony high yield savings has now gone from 0.75% APY to 0.65%. One year CD at 0.60%.
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