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Ally Bank No Penalty CD

Posted: Thu Jun 22, 2017 7:23 am
by sophie
It's a CD...no, it's a savings account...or is it a floor wax!

https://www.ally.com/bank/no-penalty-cd/

Cliff Notes version: For a minimum balance of $25,000, you can now open a new savings-ish account with Ally yielding 1.50%. It is technically an 11 month CD with autorollover and with no early withdrawal fees. Your money is locked into the account for 6 days.

It looks like the only difference between that and a regular savings account with Ally is that you can't tie it to the checking account for overdraft transfers. For comparison, the one year T bill is 1.22%.

Looks interesting, but I wonder why they didn't just introduce tiered interest rates into their savings accounts. Why the added complexity? This has also left me wondering if I shouldn't just go the T bill route, which has only a slightly lower interest rate after tax.

EDIT: I found some info that in order to withdraw money you have to close the CD and wait two days for the money to transfer out. No partial withdrawals. So it's more like selling a CD or T bill than a savings account....

Re: Ally Bank No Penalty CD

Posted: Thu Jun 22, 2017 5:42 pm
by farjean2
These low interest rates have been going on for so long now that I'm beginning to question my memories about the past. Seems to me that when I opened my Fidelity online checking account when they first offered it, they were offering around 5% on a checking account balance of something like 5-10k? Or maybe even no required minimum balance at all if memory serves me right.

Can anybody help me about whether I'm dealing with false memories of the good old days or not?

Re: Ally Bank No Penalty CD

Posted: Thu Jun 22, 2017 6:20 pm
by ochotona
In 1983 I got a 12-month CD offering about 13% APR, at an S&L in the Sherman Oaks (California) Galleria where they filmed "Terminator 2". Imperial Savings and Loan. Long since gone, of course. Oh, the good old days.

Re: Ally Bank No Penalty CD

Posted: Thu Jun 22, 2017 6:49 pm
by eufo
ochotona wrote:In 1983 I got a 12-month CD offering about 13% APR, at an S&L in the Sherman Oaks (California) Galleria where they filmed "Terminator 2". Imperial Savings and Loan. Long since gone, of course. Oh, the good old days.
Hasta la vista, baby!

Wow, 13%! *heavy sigh*

Re: Ally Bank No Penalty CD

Posted: Thu Jun 22, 2017 7:24 pm
by buddtholomew
ochotona wrote:In 1983 I got a 12-month CD offering about 13% APR, at an S&L in the Sherman Oaks (California) Galleria where they filmed "Terminator 2". Imperial Savings and Loan. Long since gone, of course. Oh, the good old days.
shut up :o
Grew up in the San Fernando Valley on Louise (south side of Ventura Blvd) and attended UCLA.
Sherman Oaks Galleria was the shiznit back in the day.

Re: Ally Bank No Penalty CD

Posted: Thu Jun 22, 2017 9:21 pm
by ochotona
All banks pass this year's stress tests, BUT...

Among a couple of close calls, Morgan Stanley's (NYSE:MS) supplementary leverage ratio fell to as low as 3.8% under the severely adverse scenario - not too far from the 3% minimum. Ally Financial's (NYSE:ALLY) CET 1 ratio fell to as low as 6.5% vs. the 4.5% minimum.


https://seekingalpha.com/news/3275165-b ... ress-tests

Ally used to be GMAC, and is heavily auto loan dependent... need I say more. I watch it like a hawk, but I have lots of money there, but all under the FDIC limit.

Re: Ally Bank No Penalty CD

Posted: Thu Jun 22, 2017 10:12 pm
by Cortopassi
farjean2 wrote:These low interest rates have been going on for so long now that I'm beginning to question my memories about the past. Seems to me that when I opened my Fidelity online checking account when they first offered it, they were offering around 5% on a checking account balance of something like 5-10k? Or maybe even no required minimum balance at all if memory serves me right.

Can anybody help me about whether I'm dealing with false memories of the good old days or not?
Absolutely back in the ~2000 years. I would do the 0% for 12 months cash advance on a new/existing credit card, take the cash and put it in a money market. Did it 3 times. Easy, free $1000 every time for a 20k advance.

Image

Re: Ally Bank No Penalty CD

Posted: Mon Jul 03, 2017 7:14 am
by ochotona
Ally just raised it's online savings rate to 1.15%.

Re: Ally Bank No Penalty CD

Posted: Mon Jul 03, 2017 8:09 am
by jhogue
1 year Treasury: 1.27% 6/30/2017 Fidelity min. $1,000
1 year CD: 1.40% 6/30/2017 synchrony min. $2,000
Current I-bond rate: 1.96% 5/01/2017 Treasury Direct min. $ 25
Previous I-bond rate: 2.76% 5/01/2017 Treasury Direct min. $ 25

Happy 4th of July to everyone!

Re: Ally Bank No Penalty CD

Posted: Mon May 20, 2019 4:12 pm
by ppnewbie
sophie wrote:
Thu Jun 22, 2017 7:23 am
It's a CD...no, it's a savings account...or is it a floor wax!

https://www.ally.com/bank/no-penalty-cd/

Cliff Notes version: For a minimum balance of $25,000, you can now open a new savings-ish account with Ally yielding 1.50%. It is technically an 11 month CD with autorollover and with no early withdrawal fees. Your money is locked into the account for 6 days.

It looks like the only difference between that and a regular savings account with Ally is that you can't tie it to the checking account for overdraft transfers. For comparison, the one year T bill is 1.22%.

Looks interesting, but I wonder why they didn't just introduce tiered interest rates into their savings accounts. Why the added complexity? This has also left me wondering if I shouldn't just go the T bill route, which has only a slightly lower interest rate after tax.

EDIT: I found some info that in order to withdraw money you have to close the CD and wait two days for the money to transfer out. No partial withdrawals. So it's more like selling a CD or T bill than a savings account....
Anyone looked at www.marcus.com - It's Goldman Sach's new attempt to provide banking services for the rest of us. Savings account is 2.25%, CD's are 2.7%. There is definitely major counter party risk with an online account and Goldman playing with your money. But if your comfortable with that, it's a pretty impressive offer. Personally, I have not made up my mind if I am willing to take the risk.

Re: Ally Bank No Penalty CD

Posted: Mon May 20, 2019 5:04 pm
by jhogue
A 1 year T-bill at Fidelity brokerage was 2.34% today. A 6 month T bill was 2.39%. Minimum purchase of $1,000. T-bills are also free of state and local taxes. CDs are not.

Re: Ally Bank No Penalty CD

Posted: Wed May 22, 2019 4:23 pm
by ppnewbie
Goldman Sachs - marcus.com 2.25% savings ($1,000 minimum), 2.35% penalty free CD, 2.7% 1 year CD.

Re: Ally Bank No Penalty CD

Posted: Wed May 22, 2019 5:04 pm
by jhogue
One thing is certain: Goldman Sachs will be "playing with your money."

That is who they are. That is what they do.

Re: Ally Bank No Penalty CD

Posted: Thu May 23, 2019 9:13 am
by jhogue
See Craig Rowland's comments in Cash FAQ:

"Q: Why a Treasury Money Market Fund and not something else with better yield?

A: Because you are not looking to take risk with your cash. Treasury Money Market Funds that are properly run are one of the most liquid investments you can own. There are no FDIC limits to worry about, no bank credit worthiness to worry about, and you will always be paid barring some extremely catastrophic event in the country. Chasing yield with your cash means you are taking on more risk and those risks can show up when you least expect (or want) them to. "

Re: Ally Bank No Penalty CD

Posted: Tue Jun 18, 2019 8:48 pm
by ochotona
Ally CD rates are declining now... :(

Re: Ally Bank No Penalty CD

Posted: Wed Jun 19, 2019 7:27 am
by dualstow
ochotona wrote:
Tue Jun 18, 2019 8:48 pm
Ally CD rates are declining now... :(
It won’t last, but Vanguard’s treasury money market (fund #11) is still paying over 2.3%.

Re: Ally Bank No Penalty CD

Posted: Wed Nov 20, 2019 9:05 pm
by ochotona

Re: Ally Bank No Penalty CD

Posted: Thu Nov 21, 2019 4:46 am
by dualstow
ochotona wrote:
Wed Nov 20, 2019 9:05 pm
Ally "buckets" sound useful

https://www.ally.com/go/bank/savingstoo ... L400001540
Cool. Seems like a fun way to allocate the right amount for bills and emergencies and see what’s left.

Re: Ally Bank No Penalty CD

Posted: Fri Dec 20, 2019 6:21 am
by ochotona
Ally online savings down to 1.60% now...

Re: Ally Bank No Penalty CD

Posted: Fri Dec 20, 2019 7:13 am
by dualstow
ochotona wrote:
Fri Dec 20, 2019 6:21 am
Ally online savings down to 1.60% now...
One point higher than VUSXX/ Vanguard treasury money mkt

Re: Ally Bank No Penalty CD

Posted: Wed Mar 04, 2020 12:42 pm
by dualstow
Original post in the thread, 2017
sophie wrote:
Thu Jun 22, 2017 7:23 am
It's a CD...no, it's a savings account...or is it a floor wax!

https://www.ally.com/bank/no-penalty-cd/

Cliff Notes version: For a minimum balance of $25,000, you can now open a new savings-ish account with Ally yielding 1.50%. It is technically an 11 month CD with autorollover and with no early withdrawal fees. Your money is locked into the account for 6 days.
...
(2nd post is ochotona's memory of a 13% CD which made me weep)

If you're willing to lock up your money for a year, you can get a 2% CD rate (source: bankrate dot com).
Is anyone doing that?
I haven't. I have treasuries, some of it laddered. but I'm curious.

Re: Ally Bank No Penalty CD

Posted: Thu Mar 05, 2020 9:30 am
by sophie
Nah. I got out of Ally and now use Fidelity for online banking instead. My "savings account" is FDLXX, and my "checking" is actually the same account's core fund which is either SPAXX or FZFXX depending on what mood I'm in. A much simpler way to accomplish the same thing.

Re: Ally Bank No Penalty CD

Posted: Thu Mar 05, 2020 9:38 am
by dualstow
I do wonder if anyone's chasing that 2% while it lasts, though. I know someone -- not a pp'er -- who is buying 5-year-CDs in anticipation of years of low rates.

Re: Ally Bank No Penalty CD

Posted: Thu Mar 05, 2020 9:48 am
by drumminj
dualstow wrote:
Thu Mar 05, 2020 9:38 am
I do wonder if anyone's chasing that 2% while it lasts, though.
I did lock in some 3% 5-year CDs around a year ago with "deep cash" with this in mind. Even broke some CDs and re-purchased at higher rate when things hit 3%.

We've discussed relative risks of CDs vs treasuries elsewhere so hope to avoid getting back into that here, but given the way things have gone it's worked out in my favor.

Re: Ally Bank No Penalty CD

Posted: Thu Mar 05, 2020 9:48 am
by sophie
You could buy a CD through Fidelity to lock in those rates. Not a bad thought! I'm thinking I'd rather keep my cash liquid though, for "dry powder". That's because so much of mine is locked up in savings bonds.