Comments on: Ally Bank 5-Year Certificate of Deposit: A Closer Look

By: Net Worth & Goals Update – April 2010 » My Money Blog

Net Worth & Goals Update – April 2010 » My Money Blog — Mon, 10 Oct 2011 01:04:03 +0000

[...] usage requirements) or in a 5-year CD from Ally Bank, which despite the long term still provides a very competitive yield even if you withdraw early before the 5 years is [...]

By: An Easy Way to Double Your Short-Term CD Rates | Financial Services Review

An Easy Way to Double Your Short-Term CD Rates | Financial Services Review — Mon, 17 May 2010 19:21:01 +0000

[...] is an interesting post over at My Money Blog about the Ally Bank 5-year Certificate of Deposit and how you can profit from it. If you have been [...]

By: John

John — Sat, 17 Apr 2010 18:59:29 +0000

Great idea thanks for the info. I noticed ally also has an 11 month No Penalty CD with an APY of 1.40. This seems like a pretty good deal…any thoughts?

I don’t yet have any accounts with ally, but I’m planning on opening some. How easy is it to manage multiple cds? Do you need a checking or savings account with ally to open the cds? Anyone with experience please let me know.

By: Caleb

Caleb — Tue, 06 Apr 2010 21:42:23 +0000

In Canada, the 5yr GIC rate (same as CD) is 3.6%. However, if you redeem prior to maturity at any time, the rate drops to 1.5%.

By: Joe J

Joe J — Tue, 06 Apr 2010 15:27:58 +0000

Excellent idea! I’ve just opened up my CDs with Ally.

By: An Easy Way to Double Your Short-Term CD Rates | Your Financial World

An Easy Way to Double Your Short-Term CD Rates | Your Financial World — Mon, 05 Apr 2010 12:59:00 +0000

[...] is an interesting post over at My Money Blog about the Ally Bank 5-year Certificate of Deposit and how you can profit from it. If you have been [...]

By: Jonathan

Jonathan — Fri, 02 Apr 2010 17:12:16 +0000

@Tomsirois – Unfortunately, there are no partial withdrawals allowed.

By: Tomsirois

Tomsirois — Fri, 02 Apr 2010 11:07:38 +0000

Do you know if Ally Bank will allow “partial” withdrawals? Some banks assess a penalty based on the amount you withdraw, rather than on the full balance. This could help eliminate the need to open several small certificates.

By: Jonathan

Jonathan — Thu, 01 Apr 2010 06:55:00 +0000

Don’t blame me!

Remember, Ally Bank has a 10-day Best Rate Guarantee. Make sure they stick to it!

By: Red

Red — Thu, 01 Apr 2010 05:50:04 +0000

Thanks Warren.

Anybody else notice the rates dropped for 3 straight days in a row??

3.09%
3.04%
2.99%

Wonder what it’ll be tomorrow?? LOL

By: Warren

Warren — Wed, 31 Mar 2010 03:09:08 +0000

Red – I did the same thing, for the same reason. I like to see the monthly deposit. From the purely financial point of view it would be better to leave the interest in the CD because it compounds at the higher rate (CD rate vs. Ally savings acct rate). But at these low interest rates the difference is not enough to worry about.

By: Red

Red — Wed, 31 Mar 2010 02:51:49 +0000

Curious………

Anybody care to give feedback (logical or emotional) as to how they prefer accrued interest be paid?

I started one and chose monthly deposits back into my regular Ally account. My personal reason was that there’s just a value (imho) to seeing that money accrue every month. Is it foolish?? Not enough to worry about??

Things that make you go hmmmmmmmmmmmm…..

By: Frankie

Frankie — Tue, 30 Mar 2010 22:58:06 +0000

This makes even more sense now that Alliant has dropped their CD rates. I’m slowly laddering into these about 10% each month.

By: bb

bb — Tue, 30 Mar 2010 13:37:21 +0000

saywhat? I’m sure Ally makes money on all those CDs, so we’re actually supporting a financial company that taxpayers (we, again) are supporting.

By: saywhat?

saywhat? — Mon, 29 Mar 2010 20:20:54 +0000

Seems strange that you’d be offering ways to game the system for a financial company that taxpayers are supporting?!

By: Jonathan

Jonathan — Mon, 29 Mar 2010 19:49:23 +0000

@Cameron – Here’s what I did… The rate is 3.04% compounded daily. I did assume each month is 30 days, which gives 2 years as 720 days as opposed to 365*2 = 730.

For 2 years, every one dollar will turn out to be

(1+0.0304/360)^720 = $1.0618

However, with 60 days penalty you’ll actually get $1.0565.

Annualizing this = 1.0565^(360/720)-1 = 2.83%.

Let me know if I missed something.

By: Thad

Thad — Mon, 29 Mar 2010 19:09:55 +0000

Neato. I didnt really think of seeing what the rates actually turned out to be even with the penalty calculated. Can some ingenious techie create a web page where you enter rates, terms and penalties and find the effective yield? or draw the curve for you? I know a spreadsheet on this would be pretty easy.

I am sure the banks would close this loophole if enough of us drive our buses through it…….

By: Cameron

Cameron — Mon, 29 Mar 2010 18:04:24 +0000

Hey Jonathan. Out of curiosity, how did you calculate the resulting rates? I’m not getting the same values. For example, for the 2 year term you calculated that as 2.83%, however I got 2.7901%. It’s a small difference, but it’s driving me nuts that I can’t figure out how you arrived at your figures! Thanks.

By: Dylan

Dylan — Mon, 29 Mar 2010 17:49:21 +0000

I’ve heard elsewhere (fatwallet) that Ally offers a rate bonus for current CD customers that renew their CD. The bonus is either .25% or .5%. They seem to offer different people different amounts. I did see someone who was offered .25% post that they asked for and got a .5% increase. I have a 1-year CD maturing in May that I would like to add to and split into several smaller CDs. I’m going to see in Ally will let me do this and give me the .5% bonus. We’ll see!

By: Robert

Robert — Mon, 29 Mar 2010 12:46:41 +0000

I have had many CD’s with Ally. I’ve closed several of them early (No Penatly CDs) with no problems from customer service. So far my experiences with them have been great. They even offer a checking account now that pays interest.

By: Dan

Dan — Sun, 28 Mar 2010 21:59:34 +0000

With all the excitement over using the 5-year CD as an alternative to a savings account, isn’t it just a matter of time before they either increase the penalty (say, to 6 months) or reduce the rate? I guess this is a reason to open the CDs now, which is exactly what I have done with a big chunk of my cash.

By: Warren

Warren — Sat, 27 Mar 2010 21:54:25 +0000

Mike – I have a few CD’s at Ally. You can sign up to get your interest monthly or at the end of the term.

By: Mcneri

Mcneri — Sat, 27 Mar 2010 19:36:44 +0000

Ally is really doing a great job. I have decided to ladder 5 year CDs with them monthly. I will be doing $1000 each monthly over the next 5 months. Has anyone done laddering? Did it go well?

By: rrn124

rrn124 — Sat, 27 Mar 2010 03:47:31 +0000

I’ve had nothing but good experiences with Ally (formally GMAC). Online savings have been what they promised. The website is above average (I have 5 different online banks). I purchased two no penalty (9 month) CD’s last year and had to cash one in early due to an auto accident. Customer service was friendly, quick, and efficient. The cash was in my b&m checking in two days (with no fees whatsoever). I have credit union CD’s coming due in June. Ally’s rates are equivalent, but the penalties are soooooo much better! They will get my cash!

By: Mike

Mike — Sat, 27 Mar 2010 02:33:50 +0000

How often do you get paid your interest? Is it only at the end of the CD term? In otherw ords, would I only get it at the end of 5 years?

Is there any kind of signup bonus for Ally Bank?