Ally Bank vs. FDIC: 9-Month No-Penalty CD, Competitive Rate

It’s Friday, which has become the day when Ally Bank announces new rates. I’m not sure why Ally Bank has become the poster boy for naughty banks giving us interest rates that are “too high”, but they are. From this CNN Money article:

Last month, the FDIC issued rules capping the rates troubled banks can pay on deposits — an edict that didn’t apply to Ally Bank because it is well capitalized.

The letter requires Ally to report to the agency on its deposit rates and how they compare with other banks whenever it seeks to tap funds under a federal debt guarantee program.

So they are confirmed to be well-capitalized, but they are still under scrutiny. It is better to be under-capitalized and offer horrible interest rates? Either way, another round of slight drops this week.

Comments

  1. I just want to offer that I’ve been banking with a local bank for a number of years now and they have always had rates that have seemed waaaaay higher than other competing banks.

    They are First National Bank of Broken Arrow (http://www.fnbba.com). Right now, my *checking* account gets 4.1%, and until about February of this year I had been getting 5.01% for about 18 months.

    Just wanted to share the wealth if anyone wants to switch?

    (love your blog, btw!!!)

  2. I managed to get a few bucks into a couple no-penalty CDs at 2.3% before the rate drop. Thanks.

  3. Glad to hear it. It is good to remember that Ally has had a pattern of changing rates on Fridays as well.

  4. Thanks, I opened a no-penalty CD. It’s better than my money market fund, which is getting 0.6% right now. I haven’t really used one of the “do a bunch of stuff for this high rate” checking accounts since I’d rather not worry about the exact number of debit transactions I have.

  5. Ally did change the rate on me for a 6 month CD from 2.0 APY to 1.9 APY by the time the transaction went through. So, it is good to know that one should try and close before Friday. Also, you can transfer money faster (so they told me) over the phone vs online. As I went through the overhead of opening up a new account, it took a couple more days and I think that is where I lost the extra basis points. I was very surprised at the vast improvement in customer service between GMAC and Ally. GMAC was horrible and Ally is outstanding. I’ve not seen such a dramatic change like that before. They are headed the right direction (assuming they stay solvent!).

  6. Whosane says:

    I noticed fees for “domestic outgoing wire” for the online savings account. Is a “domestic outgoing wire” different from “online money transfer from ally bank online savings account to hsbc/ing direct savings accounts”?

    I had a really horrible experience with customer service agent on the phone… She was only repeating the exact same text available on the website FAQs…

  7. A wire transfer is nearly instantaneous and usually costs $25 or so at most banks. It’s usually scheduled and executed by a human in a branch. If done early, you can use the funds in your receiving account the very same day.

    An “online transfer” is almost always an ACH transfer, which occurs over 1-3 business days and is short for Automated Clearing House, where all the money from bank is swept together at the end of a business day. This is free when initiated by Ally bank.

  8. Frankie says:

    Does anyone know how to get out of these No Penalty CD’s if you want the cash? I don’t need to sell mine yet but just wanted to know for when the time comes. I can’t see any options to do so. I’ve broken mine up into batches just in case I need a little cash.

  9. Just tried to open an account with Ally Bank. After requesting a copy of my driver’s license, utility bill, and social security card, I decided that the 0.5% was not worth the hassle of moving my money from ING.

    Ally Bank claimed that Trans Union placed a fraud alert on my credit report, which is why they were asking for the information. When I contacted Trans Union, they said that no such alert was on my credit report.

    Also, the two customer service representatives to which I spoke were fairly nice, but extremely slow.

  10. Routing Number says:

    Would you say that Ally is better than e-trade? I’ve got an e-trade account, but am thinking of switching to Ally because they no longer offer CD’s (i don’t think they do at least).

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