Ally-14 month Select CD at 2.85%

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cruzbay
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Ally-14 month Select CD at 2.85%

Post by cruzbay » Wed Dec 26, 2018 10:30 am

Just rolled a CD that was coming due and moved the funds from the No Penalty CD that I opened to earn the recent bonus to a limited time offer for existing customers. The offer is a 14 month Select CD at 2.85%. The rep said that this offer will be out there into the month of February 2019. It doesn't appear on the listing of available CDs but popped up as an option when I went to the screen to Manage this CD. Moving the money from the No-Penalty CD did not affect eligibility for the bonus per the rep on the phone. Thought you might have "interest" in knowing this! Cheers! :sharebeer

k3vb0t
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Re: Ally-14 month Select CD at 2.85%

Post by k3vb0t » Wed Dec 26, 2018 2:29 pm

Here’s a link to it for anyone interested: https://www.ally.com/learn/selectcd-14m/

Colorado13
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Re: Ally-14 month Select CD at 2.85%

Post by Colorado13 » Thu Dec 27, 2018 9:23 am

Thanks for posting this!

MathIsMyWayr
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Re: Ally-14 month Select CD at 2.85%

Post by MathIsMyWayr » Thu Dec 27, 2018 11:09 am

The Ally-14 month Select CD at 2.85% link includes the following 2 conditions:
  • Automatically renews into a 12-month High Yield CD
  • Early withdrawal penalty will apply
Does it imply that I may be subject to EWP if the rate of a 12-month High Yield CD is not great?

k3vb0t
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Re: Ally-14 month Select CD at 2.85%

Post by k3vb0t » Thu Dec 27, 2018 11:15 am

MathIsMyWayr wrote:
Thu Dec 27, 2018 11:09 am
The Ally-14 month Select CD at 2.85% link includes the following 2 conditions:
  • Automatically renews into a 12-month High Yield CD
  • Early withdrawal penalty will apply
Does it imply that I may be subject to EWP if the rate of a 12-month High Yield CD is not great?
I haven’t jumped into this yet but my guess is the 12 month renewal is there so that you don’t think it would auto renew into another 14 month CD. Best way to find out is to call/secure message Ally.

I’d also guess it doesn’t *require* automatic renewal but then again banks do dumb things from time to time so I would definitely check first.

MathIsMyWayr
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Re: Ally-14 month Select CD at 2.85%

Post by MathIsMyWayr » Thu Dec 27, 2018 11:37 am

k3vb0t wrote:
Thu Dec 27, 2018 11:15 am
MathIsMyWayr wrote:
Thu Dec 27, 2018 11:09 am
The Ally-14 month Select CD at 2.85% link includes the following 2 conditions:
  • Automatically renews into a 12-month High Yield CD
  • Early withdrawal penalty will apply
Does it imply that I may be subject to EWP if the rate of a 12-month High Yield CD is not great?
I haven’t jumped into this yet but my guess is the 12 month renewal is there so that you don’t think it would auto renew into another 14 month CD. Best way to find out is to call/secure message Ally.

I’d also guess it doesn’t *require* automatic renewal but then again banks do dumb things from time to time so I would definitely check first.
I saw a number of great CD ads. Most of them carry such automatic renewal into something else of miserly rates with hefty EWPs. It is definitely essential to check out the loose ends.

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cruzbay
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Re: Ally-14 month Select CD at 2.85%

Post by cruzbay » Thu Dec 27, 2018 12:14 pm

I checked on the automatic renewal into a 12 month CD and here is the reply from Ally:
"All CD's will automatically renew into the same terms with the exception of promotions, they will renew into the closest term. With all CD's you are able to make any changes during the 10 day grace period - Add/Remove Funds, Change Term, Close Account, etc. Then as part of any renewal, you would receive a loyalty reward of 0.05% which is added following your 10 day grace period."

Silence Dogood
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Re: Ally-14 month Select CD at 2.85%

Post by Silence Dogood » Thu Dec 27, 2018 8:23 pm

I noticed this today.

Currently Ally offers a 12 month CD for 2.75%.

Is the 2.85% (0.1% higher) rate worth being locked in for an additional 2 months?

MathIsMyWayr
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Re: Ally-14 month Select CD at 2.85%

Post by MathIsMyWayr » Thu Dec 27, 2018 9:27 pm

The rate of 1-year T-note is 2.58% today (12/27/2018). Depending on your state tax rate, it must be quite competitive to the Ally's 12-month CD rate.

radiowave
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Re: Ally-14 month Select CD at 2.85%

Post by radiowave » Thu Dec 27, 2018 10:27 pm

Silence Dogood wrote:
Thu Dec 27, 2018 8:23 pm
I noticed this today.

Currently Ally offers a 12 month CD for 2.75%.

Is the 2.85% (0.1% higher) rate worth being locked in for an additional 2 months?
I vascillated on both, decided on the 12 mo as December seems to be the time Ally has better deals on CDs . . . I'll find out next Dec if I made the right choice.
Bogleheads Wiki: https://www.bogleheads.org/wiki/Main_Page

Silence Dogood
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Re: Ally-14 month Select CD at 2.85%

Post by Silence Dogood » Fri Dec 28, 2018 12:24 pm

radiowave wrote:
Thu Dec 27, 2018 10:27 pm
Silence Dogood wrote:
Thu Dec 27, 2018 8:23 pm
I noticed this today.

Currently Ally offers a 12 month CD for 2.75%.

Is the 2.85% (0.1% higher) rate worth being locked in for an additional 2 months?
I vascillated on both, decided on the 12 mo as December seems to be the time Ally has better deals on CDs . . . I'll find out next Dec if I made the right choice.
The only problem with that strategy is if in 12 months (December 2019) Ally again offers their better rates on other than 12 month CDs.

It's possible that Ally will avoid keeping the same term lengths for their promotional CDs (12 months one year, 14 months the next year, 10 months the year after that, etc.).

tenkuky
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Re: Ally-14 month Select CD at 2.85%

Post by tenkuky » Wed Jan 09, 2019 9:57 am

Has anyone incurred an EWP penalty and if so how is it reported on a 1099 if at all?
Is there a good calculator which helps decide if a locked-in with penalty CD rate is better than a no-penalty one?
I've only used the 11-mo no penalty but am tempted to spring for either the 12-mo or 14-mo special.

AlwaysaQ
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Re: Ally-14 month Select CD at 2.85%

Post by AlwaysaQ » Wed Jan 09, 2019 10:23 am

It looks like the penalty should appear on Schedule 1 line 30 which is also titled 'Additional Income and Adjustments to Income'.

Warrior1983
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Re: Ally-14 month Select CD at 2.85%

Post by Warrior1983 » Wed Jan 09, 2019 5:55 pm

I called Ally and rep confirmed that the renewal to a 12 month CD is not required, but is the default if you're not paying attention.

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Ricchan
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Re: Ally-14 month Select CD at 2.85%

Post by Ricchan » Wed Jan 09, 2019 9:03 pm

FYI, Ally provides a way to change renewal options for CDs via their website. From the top menu, go to More > Manage CDs. Then on the left, select Renewal Options, then select your CD from the dropdown menu on the right.

The only caveat is that the ability to set Renewal Options may not be immediately available after opening a new CD. I'm not sure how long the delay typically is.

TallBoy29er
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Re: Ally-14 month Select CD at 2.85%

Post by TallBoy29er » Wed Jan 09, 2019 9:57 pm

^^ Ricchan, super helpful, thank you.

kaneohe
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Re: Ally-14 month Select CD at 2.85%

Post by kaneohe » Thu Jan 10, 2019 8:34 am

tenkuky wrote:
Wed Jan 09, 2019 9:57 am
Has anyone incurred an EWP penalty and if so how is it reported on a 1099 if at all?
Is there a good calculator which helps decide if a locked-in with penalty CD rate is better than a no-penalty one?
I've only used the 11-mo no penalty but am tempted to spring for either the 12-mo or 14-mo special.
https://www.irs.gov/pub/irs-pdf/f1099int.pdf box 2

eldinerocheapo
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Re: Ally-14 month Select CD at 2.85%

Post by eldinerocheapo » Thu Jan 10, 2019 8:48 am

I have staggered 1yr cd's with Ally coming up monthly and can tell you, these are not teaser rates. The interest rate has gone up consistently at renewal for the last few years, and their 5 year cd is now at 3%. When one cd comes up per year, I roll it into a 5 year so all the bases are covered from 1 to 5 years, and the rest can be renewed or used for expenses, emergencies, or funding a Roth IRA annually.

DaftInvestor
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Re: Ally-14 month Select CD at 2.85%

Post by DaftInvestor » Thu Jan 10, 2019 2:02 pm

What's the EWP on this offer? (I clicked the link and it says an EWP will apply but didn't state what it was).

listedguru
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Re: Ally-14 month Select CD at 2.85%

Post by listedguru » Thu Jan 10, 2019 3:31 pm

Maybe a dumb question but here it goes:

Can you withdraw any of the interest you earn on this ally cd or is the interest reinvested into the cd or looked up somehow?

Thanks,

-Guru

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HueyLD
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Re: Ally-14 month Select CD at 2.85%

Post by HueyLD » Thu Jan 10, 2019 3:39 pm

DaftInvestor wrote:
Thu Jan 10, 2019 2:02 pm
What's the EWP on this offer? (I clicked the link and it says an EWP will apply but didn't state what it was).
For CDs with terms of up to 2 years, the EWP is 60 days.

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HueyLD
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Re: Ally-14 month Select CD at 2.85%

Post by HueyLD » Thu Jan 10, 2019 4:14 pm

listedguru wrote:
Thu Jan 10, 2019 3:31 pm
Maybe a dumb question but here it goes:

Can you withdraw any of the interest you earn on this ally cd or is the interest reinvested into the cd or looked up somehow?
Ally's default method is to credit accrued interest to your CD at maturity (for terms of up to one year) or at Dec. 31 (for terms greater than one year).

To get accrued but not yet credited interest out, you will need to change the interest payment option to monthly, quarterly, semiannually and the accrued interest will be sent to another account either at Ally or elsewhere.

Pam01
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Re: Ally-14 month Select CD at 2.85%

Post by Pam01 » Thu Jan 10, 2019 7:29 pm

Navy Federal is offering a 17-month CD at 3.25% APY. Maximum contribution is $50,000 and early withdrawl penalty is 6 months. May be a better option than Ally 14-month CD for those with Navy Federal membership.

MathIsMyWayr
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Re: Ally-14 month Select CD at 2.85%

Post by MathIsMyWayr » Sat Jan 12, 2019 8:42 am

The latest interest rates of T-bills are a little over 2.5% for 26 and 52 week bills. Since their interests are exempt from state taxes, I might forgo the 2.85% CD.

808
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Re: Ally-14 month Select CD at 2.85%

Post by 808 » Sun Jan 13, 2019 2:37 am

tenkuky wrote:
Wed Jan 09, 2019 9:57 am
Is there a good calculator which helps decide if a locked-in with penalty CD rate is better than a no-penalty one?
https://www.depositaccounts.com/tools/b ... lator.aspx

indexonlyplease
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Re: Ally-14 month Select CD at 2.85%

Post by indexonlyplease » Sun Jan 13, 2019 8:25 am

With Vanguards PMM paying 2.45% why tie up your money. Also, you can see the rate keeps increasing. So, I would believe this is the best scenario since you can acess the money anytime with no penalty.

Sure a little lower rate but will it really matter?

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