Dedicated to Deposits: Deals, Data, and Discussion

Update on Ally Bank's 9-Month No-Penalty CD

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Ally Bank
Ally Bank (formerly GMAC Bank) continues to offer a good deal on its new no-penalty CD with a 2.50% APY for a term of 9 months. Ally Bank allows you to close the CD and withdraw your money without a penalty 6 days after funding, and anytime thereafter. One detail that the website doesn't describe is the options for receiving the funds. A reader and I were initially told that the only option to receive the funds is to have them mail you a check. However, after following up with the CSR, I was told the following:
The 9 Month No-Penalty CD can be closed in 3 different ways. Check by mail, Federal Wire or internal transfer to your Ally Bank Money Market or Online Savings account. You will need to allow 24-72 hours to process the closure once the request has been made.

The only method not allowed is by ACH transfer.

The regular CDs can be closed in the above 3 ways, but you also have the ACH option that allows you to request an ACH transfer to an external checking or savings account. I don't consider the lack of the ACH transfer a big deal as long as they allow you to transfer the funds into your Ally savings account or money market account. If a mailed check was the only option, that would be a major issue. I was also told that to close a CD account you would have to call and speak to a CSR. They cannot close any account by secure messaging. They used to allow you to close CD accounts via their secure message system. I'm not sure why they changed this, but since their customer service is available 24/7, it's only a minor inconvenience. After you give them instructions by phone, I would recommend checking up on them to confirm the CD has been closed properly.

For more details on Ally Bank, please refer to my May 15th Ally Bank post. I also have an update on the ABA issue. The CEO of GMAC Financial Services has responded to ABA's FDIC letter .

  Tags: Ally Bank, CD rates

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Comments
12 Comments.
Comment #1 by Anonymous posted on
Anonymous
The early withdrawal penalty for Ally's traditional CDs is cleverly hidden on their site -- just like the banks that charge exorbitant penalties.

The penalties are fair -- I don't know why they hide them.

"If you make a withdrawal from your Classic Certificate of Deposit before it matures, you will also be charged an early withdrawal fee. The fee is calculated based on the term and size of your certificate of deposit:

if the term is one year or less, the fee will equal 90 days worth of interest;

if the term is greater than one year, the feel will equal 180 days worth of interest.

This fee is calculated using the interest method detailed in your Deposit Agreement, and is first deducted from the interest and then — if necessary — the principal.


http://www.ally.com/help/faqs/classic-cd.html

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Comment #2 by Anonymous posted on
Anonymous
The penalties aren't hidden at all - they're clearly spelled out in the tab called "Fees".

1
Comment #3 by Anonymous posted on
Anonymous
they can take their paltry and pathetic 2.5% savings rates and shove it.

If you factor in real inflation, you will note that 2.5% is highway robbery.

1
Comment #4 by Anonymous posted on
Anonymous
Well, Anonymous, at 6:50 PM, June 01, 2009, feel free to go to another bank and check out their rates. Oops - they're lower! Be real. What is the inflation rate these days? Instead, why don't you try stuffing your mattress with money and see how it grows there...

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Comment #5 by raderator (anonymous) posted on
raderator
Lat time I looked, inflation was MINUS 0.4%

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Comment #6 by Anonymous posted on
Anonymous
Just to make it clear...you can receive the funds by ACH on the no penalty CD if the CD has reached maturity and is within the grace period. Just like their classic CD accounts.

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Comment #7 by Anonymous posted on
Anonymous
So if what raderator says is true, money in your mattress is earning 0.4%, while an account yielding 2.5% earns 2.9% after accounting for in(de)flation.

1
Comment #8 by Anonymous posted on
Anonymous
When I posted, the "Fees" tab said only "We will charge a fee if you make an early withdrawal before the CD matures." And had a link for exceptions.

They have now added two lines to that page with the actual penalties. Good.

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Comment #10 by Anonymous posted on
Anonymous
Does anyone know what happened to their Full Disclosures and Account Agreements for Deposits, and their full Schedule of Fees is for Ally Bank (formerly GMAC)??? When it was GMAC Bank, they had a pdf that was easy for review before opening up new accounts; but it's not available anywhere!?!

1
Comment #11 by Banking Guy (anonymous) posted on
Banking Guy
They haven't made it easy to find in the new Ally website. After some searching, I found it here.

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Comment #12 by Bejar (anonymous) posted on
Bejar
Just check the website and noted a rate drop on the no penalty CD (down to 2.05%) and a posting of a 2.25% 1yr. CD. Locked in the 2.15% - think this is still a good deal and is the bank secure enough? I will remain under the FDIC limits of course. Thanks.

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Comment #13 by Data Is Gold (anonymous) posted on
Data Is Gold
Just closed three of the no penalty CDs early.

They said it would take 4-5 days (or can be earlier) for them to be closed but would be available in the MMA as soon as they are closed. A customer rep is supposed to call when the CDs have been closed and transfered.

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