Ally Bank CD Maturity Review: Phone and Online Redemptions

allyreview_logoUpdated with online maturity information and screenshots. If you have money in a bank certificate of deposit (CD), you should be aware that most of them will renew automatically for the same term length upon maturity. That means if you don’t specifically tell them otherwise, your 5-year CD will roll over for another 5 years if you’re caught snoozing during the grace period. Different banks set different grace period lengths and renewal instructions; the best ones in my opinion let you set the decision ahead of time (i.e. Pentagon Federal Credit Union).

I bring this up again because I have a few Ally Bank CDs coming up for renewal. Here’s a quick review of the process for other Ally Bank account holders. First, here is the official policy taken from their website:

What happens to my CD at maturity?
You’ll have a 10-day grace period starting on your maturity date to:

Change the term
Make additional deposits or withdraw funds
Close the CD

If you don’t make changes to your CD by phone or in online banking by the end of the 10-day grace period, it will automatically renew into the same term. To provide renewal instructions in online banking:

Log in to your account
Go to the Main Menu , then Manage CDs
Select Make Changes

Here’s the timeline.

Roughly 30 days before maturity. If you have chosen paperless documents, you’ll receive a somewhat vague e-mail from Ally Bank with the subject line “You have new correspondence in online banking.” This is actually your official “Certificate of Deposit Maturity Notice”, so don’t overlook it! If you have paper statements, you’ll get a separate letter from Ally via snail mail.

Between 30 days before maturity to 10 days after maturity. If you want anything besides an auto-renewal of the same term at current market rates, then you must notify the either by phone at 1-877-247-ALLY (2559) or online. (Less than 2 years ago, there was no online option.) Here’s a screenshot of where I clicked after reaching my CD page (click to enlarge).

allycd_close1

If you call them, they’ll ask you a bunch of identity verification questions, much more than other phone calls. You can also ask if they still offer a Loyalty Bonus where you’ll get an extra 0.05% APY if you renew your CD. I was not shown any such offer when renewing online. (The Ally Ten Day Best Rate Guarantee also applies.) If you want to make a withdrawal or other changes, they’ll ask you why. Nothing high pressure, but they’ll softly encourage you to renew.

I decided to withdraw my funds this time. If you have multiple CDs like I do (for minimizing penalties in case of early redemption), they will have to read you the details and disclosures for each one. You can just skip over it if you do it online. I do my daily banking at Ally so I just swept it into one of my online savings accounts while I decide what to do with it. Here’s a screenshot:

allycd_close2

Remember that the phone wait time is shown live on the top of their main website (I only call if it is around a minute). Closing two CDs over the phone took about 15 minutes. Closing three CDs online took under 5 minutes. I’m glad they added the online option, it was much faster.

Also see: Ally Bank Savings Account Review.

Comments

  1. Taylor Lee @ Engineer Cents says:

    I can’t imagine opening a CD now with the current interest rates.

  2. I just started renewing some Ally CD’s as well.

    I griped to the CSR that I was not able to switch terms or add funds on-line. She confirmed, I would need to call or chat.

    She mentioned that you can make renewal elections at any time. I made elections for my next 2 CD’s while I had her on the phone. You may be able to purchase a CD and then soon after call and tell them you want withdraw your funds at maturity.

  3. On a related point, over the last 18 months I closed several Ally CDs early. It was a very simple process that I was able to accomplish via an online chat with Ally. Ally transferred the CD balance, less the withdrawal penalty, to my Ally money market account within a day.

  4. Let’s say you miss the deadline by 30 days and it had already auto-renewed into a new 5 year CD. if you close that CD early what is the penalty? Is it the interest earned since rolling over? Or, would they penalize you interest that you earned during the last months of your previous CD?

    • Each bank handles it differently, but Ally Bank will eat into your CD balance. From their disclosure:

      If the accrued interest exceeds the penalty amount, the excess accrued interest over the penalty amount will be paid to you. If the accrued interest is less than the penalty amount, a reduction of the balance may result.

      So say if the new interest rate is 2%, you’d lose 150 days worth of interest no matter what even if you didn’t earn any interest yet on your new CD.

  5. Not renewing to the new 2% rate for the 5 year CD? Do you have suggestions for something better? Thanks 🙂

  6. firststep says:

    This is unrelated to CDs at Ally, but about lack of good customer service we received when closing out an account for estate purposes. My husband’s grandmother had a joint money market account with Ally when she passed away in 2014. The state of NC requires copies of signature cards for joint accounts to prove ownership. Ally was the only financial institution that refused to give a copy of the signature card to either my mother-in-law (joint account holder) or my husband (executor). All other banks gave us a copy right away, and Ally wanted a court order to release the card. Because of their refusal to comply with NC requirements. our family has closed all of our accounts with Ally.

  7. I must have set up my CDs based on your suggestion. I, too, have a couple at 3.09% also maturing next week and was about to figure out how to handle them.

    This information is extremely timely. Thank you!

  8. Good to know, I’ve got one coming up in April. So do you only get the Loyalty Bonus if you call to close?

  9. ttfitz,
    You will get the loyalty bonus either way. Be patient, it shows up after the 10 day best rate period.

  10. In my experience, anything you can do over the phone with Ally can also be done with online chat.

    • This is accurate. The reason for this is that Ally reps via the chat can see that you are logged into your account, thus, it is considered fully secured and they can do anything they could over the phone. For proof, try this: After you are done with Ally Web Chat, log out of your account but remain in the chat. They will tell you they can’t give your personal information now that you have logged out of your account.

    • I can now confirm that you can close out a CD via the secure chat. I just completed the process and it was painless.

      The confirmation I received while on the call:

      ydant, as per your request, on March ?, 2015 I am placing the request to close your Ally 5 Year CDs ending in 9999 and 9998, and also placing the request for a single debit transfer of all funds plus any accrued interest to your Ally Money Market Account ending in 9997. This closure and transfer will take about 1-2 business days altogether.

  11. Thanks! This was a great reminder as I too opened a sweet 3% Ally CD. Their chat after login is the way to go. You have a record and it’s very straight-forward.

    Now, what to do? Start laddering with a 1 or 2 year CD with rates on the uptick.

  12. Ha! I also have the same good old 3% Ally CD maturing.

  13. Rudi Pittman says:

    With current interest rates why would you NOT want to renew a 3.09% rate? How much of a penalty do they charge for early withdrawal? I’ve been looking at the Andrews FCU cd which is 7 years and it’s only 3.01%.

  14. I wonder if they autorenew a CD (without any action from the owner) if they must keep the original more-favorable 90-day cancellation penalty? Usually, if a company changes the terms, they’d need your approval, and that would seem like a change of terms, right?

    • I doubt it, you already agreed initially that if you did nothing you would renew at the then-current conditions. I would assume that includes whatever comes with a current CD, including the unknown rate and other features like early withdrawal restrictions.

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