Ally Bank 11-Month No Penalty CD Review: 2.10% APY for $25k+

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Rates updated 9/24/18. Ally Bank raised the rate on their 11-month No Penalty CD. These have been an interesting new product in this rising rate environment. If you have older No-Penalty CDs, you may want to take advantage of this higher rate. Here are the new interest rates for the No Penalty CD under their tiered structure (as of 9/24/18):

  • 2.10% APY at $25,000 minimum opening deposit
  • 2.00% APY at $5,000 minimum deposit
  • 1.75% APY at no minimum deposit.

The 11-month No Penalty CD is unique in that while the 2.10% APY rate is locked in at deposit, you can still withdraw your principal and interest without penalty at any time (well, you must wait at least 6 days from the deposit date). In other words, your interest rate can never go down, but you can still jump ship if rates rise or if there is a better promo elsewhere.

If you recently opened one of these, remember that Ally Bank offers a “Ten Day Best Rate Guarantee”:

When you fund your CD within 10 days of your open date, you’ll get the best rate we offer for your term and balance tier if our rate goes up within that time. The Ally Ten Day Best Rate Guarantee also applies at renewal.

If you have an existing No Penalty CD past the 10-day rate guarantee, this means you may consider closing it and then opening up a new one at a higher rate. You will have to withdraw everything at once – there are no partial withdrawals allowed on this type of CD. If you have an Ally savings or checking account, you can close the old CD, see the deposit in your savings/checking, and open up a new CD all in minutes online. (Note that savings accounts are limited to 6 withdrawals per month, so use your checking if possible.) You will be extending the term out another 11 months, but since you can always close it at any time it isn’t much of a concern.

Here’s a screenshot of my withdrawal showing no penalty and instant availability when withdrawn directly into an Ally account:


You can use my Ultimate Rate-Chaser Calculator to get an idea of how much additional interest you’d earn if you switched over.

Close alternatives.

  • Ally Savings is now at 1.85% APY, while other online savings accounts rates are even higher. You gain liquidity, but rates can also change on you.
  • Ally 12-month CD is now at 2.50% APY with no minimum deposit, and the 2-Year “Raise Your Rate” CD is at 2.50% APY with no minimum deposit. Both of these do have early withdrawal penalties..
  • CIT Bank 11-Month No Penalty CD is a similar product, currently at 2.05% APY but with a lower $1,000 minimum deposit. This means you could open multiple, smaller CDs and only break out what you need later. These two banks both offer 11-month No-Penalty CDs, and I’ve opened (and closed early) CDs from both places.

Ally is my primary bank, due to various factors like user interface, Live Chat, you can link tons of accounts, 1-day bank transfers are available, and their innovative CD products. I use Ally Bank Online Savings, Interest Checking, and No Penalty CD accounts as my “hub” and then open additional bank CDs as temporary “spokes” when external rates are significantly higher.

Bottom line. The Ally No Penalty CD is unique in that you are always able to move out to a higher rate, but you’ll never get a lower one. This means you can even break the No Penalty CD simply to get another No Penalty CD if/when the rate rises again.

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  1. I am trying to understand this offering. Is there a reason for me not to move most of my Ally Savings account money over to several $25K CDs? I can then move them back one by one whenever I need the money? This seems to increase my interest by 50% with very little effort and no down side.

    • Yes, it wise to put it in $25k amounts as partial withdrawals are not allowed on the No Penalty CD. If you’re alternative is the Ally online savings, then the only cost is the hassle of applying and “breaking” the CD early. Good news that applying is quite easy for existing Ally customers.

      • I did it. Very easy, thanks for the tip. I am now earning 1.5% on most of my short-term savings / emergency fund.

    • If it doubled your interest rate, then you must only have a Money Market Savings account. The Online Savings account currently gives you 1.80%. You can have both accounts, one with check writing and one without.

      As for 1.80% vs 2.10%, $68.75 more interest if the savings rate doesn’t rise. Yes it seems pretty easy as described, but I’m not sure it’s worth the effort.

  2. Anthony says:

    If there is no penalty, will you still receive all accrued interest at time of withdrawal?

    • Yes, this is quoted from the Ally website:

      With our No Penalty CD, you will not be charged a penalty for early withdrawal. You can withdraw your full balance and interest any time after the first 6 days following the date you funded the account.

  3. That’s what it says.

  4. Can you compare this product to, say, their current 5-yr CD offering (w/ early termination fee) which is currently at 2.25%?

    • @Dan – The 5-yr has a 5 month early termination fee. So the break even point (to earn a round 1.5% interest accounting for the early termination fee) is 15 months.
      If you close it out in 11 months , you will end up with a rate of about 1.23%.

  5. Synchrony 15 month is 1.55 but yes money stays locked for 15 months

  6. (ok, ok, I think I just got called out as lazy for having left money in my Emigrant account…….. closed it now 🙂

  7. I saw this yesterday on their website, closed out my current 11 month no-penalty CD which was giving me 1.25% and opened a new one right away which now gives me 1.5%. Since i am an existing Ally customer, it was a very seamless experience.

    I agree that the 11 month no-penalty CD is like a liquid account if you can keep a tab on it.

  8. I’m going to convert my Alley savings account (1.05%) to a handful of these right after I get my savings account interest payment on the 25th.

  9. Jacob Blumberg says:

    I just opened the CD, super easy to open and change options. Thanks!

  10. Jonathan do you think its wise to wait until after the Fed announcement this week before doing anything or do you think the likely rate increase is already baked into all the alternatives?

    • I would say if the 0.10% makes a difference (i.e. you have a big balance) you should just go for the new 1.60% rate now and break it later if needed. That’s the benefit of no-penalty CDs.

  11. Robert Stone says:

    You should add in your rate chaser tool to this post.

  12. Thanks for the update on this, much appreciated (especially for those of us with the old 1.5% rate looking for the bump up). Muchas gracias!

  13. thanks Jonathan! Moved some of my Ally Saving to the CD

  14. (Not) Rich says:

    From the “Let Them Eat Cake Dept.” or is it the “Something Is Better Then Nothing Dept.” I think Ally was overwhelmed by their 2% CD offer. I was on hold 12 minutes yesterday to ask a question. Normal wait time is less then a minute.

  15. I qualified for the 10 day best rate guarantee but contacted Ally as I did not see the rate increase reflected yet in my account. They stated for those qualifying, the rate increase will be reflected on the 11th day after opening the account.

  16. Fwiw, I Bonds are paying 2.58%. You can also get good returns on TIPS and T-Notes if you’re careful (their rates are determined at auction).

  17. Ally rates are just not competitive any more. PurePoint at 1.90% apr savings rate is a far better alternative than the 11-month CD, especially given that interest rates are going no where but up in near future.

  18. Does it pay lock into a 12 month 2.5% CD this week. Or would you wait to see if that rate gets a bump up from what will hopefully be a Fed rate hike tomorrow?

    • Honestly, it’s hard to tell what rates will do. Ally was offering 2% APY 12-month CDs back in December 2017, and if you locked that in through December 2018, I think your overall return would have exceeded most online savings accounts (definitely Ally’s) since even the top ones didn’t really hit 2% until a few months ago. At the same time, I like to always keep a certain amount of funds with zero penalty access.

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