Ally Bank Certificate of Deposit Opening Process

I also opened up a couple of Ally Bank 5-year CDs earlier this week as one of the places for my emergency fund, following my previous positive analysis. It went pretty smoothly, here are the steps of the application:

Step 1 select accounts – Choose the account type and term, as well as opening deposit amount. You really can open with as little as $1.

Step 2 personal information – Enter and verify your personal information and identity based on information from your credit report.

Step 3 opening deposit – Either mail in a check or provide account information (routing and account numbers) for electronic funding.

Step 4 account options – Choose how you would like your interest payments deposited (monthly, quarterly, annually) for your CD. Also choose the location (mailed check, back into CD, another Ally account, or external bank account).

Step 5 congratulations – You will have to verify two small test deposits to set up a new bank account. A welcome kit with signature cards will be mailed to you. These must be mailed back in order to avoid backup withholding of interest to the IRS. However, it does not appear to affect the actual funding of the CD.

Comments

  1. I would say Ally is now pretty close to ING Direct in the CD opening process. It’s even a little easier if you already have an Ally savings account.

    One downside with Ally CDs is that they do not allow partial withdrawals of the CD. A withdrawal of any amount of the principal will cause the closure of the CD. So it makes sense to open multiple small CDs instead of one big one.

  2. Be advised if you are moving money from your Ally Money Market to a CD, that it counts as a transaction. I opened up 5 of these CDs and they were counted as a transactions. More than 6 in a billing cycle, it’s $10 a pop.

  3. Frankie says:

    Oh good to know about the transaction limit. I have several Ally CD’s and went to open up one more this week. About half way thru it errored out and told me to call Ally. I did, and they said the system was fussy and to try again the following day. I went to try again the next day, and the APY had dropped .05%. Then it stalled on me when opening that CD too, but somehow it did open with $0. So I had to transfer money into it today. Maybe it is all on my end, Ally has been great to use until this week.

  4. Yes, as Ken said, there are no partial withdrawals allowed. Thus the possible benefit of opening multiple certificates.

    Any withdrawal from a money market will be counted as a transaction. By law, these are limited in savings accounts to 6 per month. But yep, a withdrawal to CD is one of them.

  5. damnit….the rates dropped!!!

  6. Opening an account is fine. How about steps to complete when you are about to cash a CD? I have a few with Ally that would be maturing soon.( emergency cash).

    Best Regards,

    DGI

  7. I’m also curious as to steps to complete when about to cash a cd. not that any of mine will be maturing soon.

  8. @DGI & @Fex, about closing a CD, I documented this in a blog post in January. According to the CSR, you have to contact an Ally CSR who can submit the closure request. This can be done by phone or secure email while logged into your account. Two years ago I was able to close a GMAC CD via secure email. If you have one of their liquid accounts, the funds are moved fast.

    @Brett, that’s a good point about the 6-per-month transaction limit. If you do plan on opening more than 6 CDs in one month, you may want to consider Ally’s checking account.

  9. To cash a Cd, they no longer allow you to do it by secure email. You have to call them up. Usually a few minutes on hold then about 5 minutes on the phone. They are always helpful and you can cash the CD to your savings account with the money available the next day. I cashed a few no-penalty CDs like this last month. Pretty simple.

  10. How often should you deposit the interest earned in the account?

    annually
    quarterly
    monthly

    I just talked to CSR on the phone. He said annually will earn most return. That doesn’t make any sense to me. Can someone explain?
    Thanks!

  11. @Jordan – If you deposit the money into an external account, annually will earn the most interest only because the interest has more time to accumulate and compound (the interest will be earning interest).

  12. Do deposits to the savings accounts also count as transactions? I already have two Ally Bank CD’s with the monthly interest deposited into the savings account. I was thinking of adding several 5 year CD’s as suggested elsewhere.

  13. Regarding the CD opening process, it seems I run into a snag every time because I want the CD to be joint with my wife. It seems I’m not authorized to do that online for some reason. I end up having to call a representative, and tell them to open a CD with the same ownership as the our savings account and the rest of our CD’s, and they take care of it over the phone.

  14. I wish I had as much luck opening the ally CDs. I got to step two in the online application and was told to call ally. I had to verify my identity over the phone. Of course, the regular rep can’t do that and the on that can was not available (at 11AM) so I was told to call back later. When I called back and verified my identity I was told I needed to fax in a copy of my wife’s social security card because to verify the number I gave was actually her. Once I did that, they emailed her and told her she needed to call and verify her identity with three random questions. After that- finally the accounts are open. Now they need to be funded- time to wait for trial deposits.

    So, it’s been about 10 days and the CDs still aren’t funded. I’ve never had to jump through so many hoops to open any account.

  15. Ohh!! Rates dropped!! Glad that I broke my no penalty CD to open up 5 years. For all those people having issues – pick up the phone and call them to do the dirty work for you. It was a breeze of air for me. Reps are very helpful and knowledgeable.

  16. Update: I got the signature cards over the weekend, and they are required to be mailed back in order to avoid backup withholding of interest by the IRS. Otherwise, there is no mention of it affecting the funding of the CDs.

    @Warren – I think you have to get your spouse her own unique username and password set up, which will enable her to open authorize things. I ran into the same problem with additional CDs.

  17. @Warren – According to an Ally rep, “No it will not affect the 6 transactions on the online savings account because it is incoming.” Can anyone verify this?

  18. I opened three CDs on March 28, but the funds only arrived at April 2, at which time the APY was 2.99% instead of 3.09%.

    Then on April 7 I was pleasantly surprised to be informed by the Ally Bank that I will receive 3.09% because of their 10-day best interest rate guarantee.

    That’s a very nice tough. Awesome bank.

  19. I recently closed two of my CDs and it took me about ten minutes to do it – from calling them to telling them what to do with the money to hanging up ;-)

    You cannot close a CD through secure e-mail anymore or through the chat version. I find this very annoying, since I do not like having to speak to someone anytime I want to do something. It definitely shows you that Ally is trying to make it harder psychologically for you to cash the CD. In contrast with INg Direct it was so much easier to designate everything online whether you want to renew your CD or cash it out. Of course Ally has better rates plus it is also offering a 0.25% bonus.

    The CSR was trying to pre-sell me their products, but I can find much better use of my cash ;-)

  20. Frustrated says:

    I was not aware of the six limit transaction on my money market. Now I have $130 in fees. I only found out after I tried to use my card and it was declined. I called Ally and they informed me of the transaction limitations.

    My question/dilemma: If they’re going to cut me off (after going over the transaction limit THIRTEEN times) why doesn’t Ally just cut you off after the sixth transaction? Yes, I know it means money to them, but letting me go over the limit 13 times!!! They also threatened to close my MM account. The whole thing doesn’t seem very ethical.

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  1. [...] is http://MyMoneyBlog.com.  He has a lot of great information including a nice, short article on Ally Bank’s Certificates of Deposit Opening Process, whose CDs tend to yield higher than average [...]

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