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Update on Ally Bank: CD Policies and New Commercials

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Ally Bank

I finally saw the new Ally Bank commercials last night while watching 60 Minutes. These came out just over a week ago and continue to feature kids having to deal with the "unfair" bankers. It's a good ad campaign in my opinion.

Closing an Ally CD?

I hope Ally Bank lives up to their "a different kind of bank" claim. Readers have mentioned a few issues that have me a little worried. One reader sent me an exchange he had with Ally concerning instructions to close his Ally CD. He wanted Ally to close the CD at maturity and transfer the funds to his Ally savings account. Here is how the Ally CSR replied:

Thank you for contacting Ally Bank. I am sorry to hear that you have decided to close your account. Unfortunately for security reasons Ally Bank can no longer process account closures via this email function.

It should be noted that this isn't normal email. It's the message system that you access when you log into your account. So I'm not sure why the CSR claims there's a security issue. Here is what the CSR instructed him to do:

To close your account and provide closure instructions, please contact our customer care department at the number listed below or via our new online click to chat option. You may also send in a signed written request to close your account.

I wonder if there's another reason for not allowing closure instructions via the secure email. Making it harder to close a CD increases the chance the customer will let the CD automatically renew. Also, if the customer has to call or use the online chat, the CSR may be able to convince the customer to renew the CD instead of closing it.

I should note that I asked about this in an online chat with an Ally CSR. My CD was not near maturity, but I was asking as if I was about to open a CD. In my question about closing a CD via the secure message system, the CSR replied "depending on the request, usually." So it appears "your miles may vary" on this issue.

Loyalty Bonus for CD Renewals?

Note, if you do have an Ally CD that matures, it may be to your advantage to speak with an Ally CSR. There are still reports that CSRs can give you a loyalty renewal bonus. However, reports are that this bonus amount is now only 0.25% above the posted rates. It had been 0.50%. On the plus side, Ally is still allowing customers to change terms and add money to the account. It should be noted that not all customers are receiving the loyalty bonus, so "your miles may vary."

Ally's 5-Year CD Is Still a Good Deal

This issue of not accepting closure instructions via their secure message system is a little worrisome, but it's not stopping me from opening Ally's 5-year CDs. I was able to open a small CD last night in about 3 minutes. It was very easy, and I just used the money in my Ally savings account to fund it. The rate is not the best, but it does have the best early withdrawal penalty that I've seen (only 60 days of interest). As I described in my Ally CD review, this is a huge advantage when there's a risk of much higher interest rates in a couple of years.

CD Early Withdrawal Penalty?

Some readers have reported being told by Ally CSRs that Ally could increase the penalty on existing CDs or refuse an early withdrawal request. I was told this was not the case in my contact with an Ally CSR. When I asked in an online chat if Ally could increase the penalty on existing CDs, the CSR replied:

No, our policy is 60 days of interest.

When I asked about their right to refuse an early withdrawal request, the CSR responded:

Once the account is funded, and the funds are available, if you choose to close the account before maturity, the only penalty is the 60 days of interest.

Also, I can't find anything in Ally's account disclosure that would lead me to believe what I was told by the CSR is not correct. If you find something in the disclosure that could allow Ally to refuse an early withdrawal request or make changes to the penalty on existing CDs, please leave a comment.

If Ally did refuse an early withdrawal or increase the penalty on existing CDs, this would clearly put them on the side of the "unfair bankers" that are mocked by their commercials. In my opinion, I don't think Ally Bank will do this. So I'm taking my chances with some of my money.


  Tags: Ally Bank, CD rates

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Comments
27 Comments.
Comment #1 by Mitcyh (anonymous) posted on
Mitcyh
I was also told by a CSR that the penalty for early withdrawal for the longer tems is 60 days. However, the same CSR informed me on February 20 that Ally reserves the right to change that at any time during the term. If they do change it to, e.g., 6 months of interest, they will provide written notification, whereupon the CD-holder may close early within 30 days of said notification for only a 60-day penalty.  After expiration of the 30-day period, the new and harsher penalty will apply.

6
Comment #2 by Anonymous posted on
Anonymous
The disclosure states:

We reserve the right to limit access to your accounts and/or close your accounts without prior notice

to you. We do not bear liability for such actions

5
Comment #3 by Anonymous posted on
Anonymous
.

 

>> As I described in my Ally CD review, this is a huge advantage

>> when there's a risk of much higher interest rates in a couple of years.

 

Risk? ... Hmm ... I'd call it an opportunity, rather than risk!

 

.

-3
Comment #4 by Anonymous posted on
Anonymous
I just received an email about renewing some CDs from Ally I have expiring and they offer the .25 additonal rate in the actual email.

 

Furthermore, I would think if they raised the penalty for early withdrawl from 60 days to 6 months they should allow you to withdrawl without any penalty because they changed the terms of service.  But I have nothing to base this on.

2
Comment #5 by shraz (anonymous) posted on
shraz
I actually like how you can call Ally at anytime as they are on the phone 24/7 and tell you the waiting time. I recently closed 2 CDs and transferred it to my Savings account and it was easy. When you call just press 0 to speak to a person. I also miss the email closing but oh well. Ally is a great bank in my opinion.

1
Comment #6 by Anonymous posted on
Anonymous
Yes we get your point but the risk is that you tie up your money for 5 years @ 3% and after the 1st year of your CD interest rates rise to over 3% and you can't get your money out to take advantage of the new rates.

 

>>Risk? ... Hmm ... I'd call it an opportunity, rather than risk!

2
Comment #7 by Anonymous posted on
Anonymous
I nenewd a CD yesterday and I recieved a 0.50% bonus.  I did this through chat.  However, they did not offer the bonus, I had to ask for it.  There was no hestitation though once I asked.  I got the 5 year CD at a APY of 3.65%.  I confirmed that there is only a 60 day penalty for an early withdrawal.  Also, I was told that Ally cannot refuse to close your CD early if you request, unless the funds are still on hold.  (I did read you are not allowed to withdrawal your funds within the first 10 days of opening an account.)

I liked doing all of this on chat because I printed out the conversation and now I have written proof of what was told to me.  If their CSR made a mistake, I hope that Ally would honor what I was told.  They have been a very good bank to work with.

5
Comment #8 by Anonymous posted on
Anonymous
I also renewed a cd yesterday and received the .50% loyalty bonus.  However the loyalty bonus does not appear online.  I was told it would apply after the grace period on my account.  I also enjoy the chat feature.  I think its easier and quicker than an email and you can print it out when you are done or save it to a pdf. 

 

I personally still think ALLY is a great bank.

2
Comment #9 by Anonymous posted on
Anonymous
Thanks to everyone who posted the information they received the .5% loyalty bonus.

It is funny/sad for me to think back 19 months ago.  I was afraid to tie up my money in a 19 month CD at 5% (not with Ally).  At the time I wanted a shorter term and reluctantly did the 19 months.  Now as my CD is set to expire I hate to see it go :-(

5
Comment #10 by Virginia (anonymous) posted on
Virginia
I also renewed some CDs over the weekend, but even though I asked for the .5% loyalty bonus and/or a match to PenFed's 3.5% 60 mo CD, the most I could get out of them was .25% (3.4%). The rep I spoke with claimed that the .5% wasn't available anymore, which, if the anonymous posters are telling the truth, is obviously not true. I expect that kind of variability from other banks, but if Ally is trying to define their brand as being straight up and not sneaky, then they need to stop these sorts of tricks.

I was also told that the penalty could change any time during the term, but that I'd receive written notification in advance and have the opportunity to close the account with the 60 day penalty. That part is ok with me, especially since I expect rates to rise over the next 5 years and I may need to break the CD at some point anyway.

1
Comment #11 by Anonymous posted on
Anonymous
Does anyone know if the Ally Loyalty bonus adds any restrictions to the CD?  aka no early withdrawl or others...

 

Also maybe they are only extending the Loyalty Bonus to people with big/small accounts or big/small cd values?

1
Comment #12 by Virginia (anonymous) posted on
Virginia
Update on previous post - I logged on to Ally's website and had a chat with another rep about the .5% bonus situation. Explained that I felt "gypped" and that the bank appeared to be being sneaky by offering different things to different customers. Rep explained that he had no control over rate, that the computer system just told him the renewal rate he could offer me. However, because he didn't want me to feel gypped or have a bad experience with the bank, he was going to submit a request to the powers that be to increase my bonus rate to .5% (from .25%). He told me he couldn't guarantee the outcome, but that he was going to try for me. So maybe I'll get the .5% rate now, or maybe I won't, but either way, I appreciate his efforts. It's always nice to feel heard. Go Ally! :)

5
Comment #13 by Anonymous posted on
Anonymous
I'm still sore that I had to call Ally several times a few months ago to do early closure of a "no penalty" CD. I did manage to get the new rate on the money elsewhere, but the experience was not fun.

Judging by BankingGuy's initial post in this thread, they *still* seem to have odd process problems with CD closure -- months later.

1
Comment #14 by Anonymous posted on
Anonymous
I have a 9m no-penalty CD maturing in 2 weeks and just chatted on-line with a CSR.  They agreed to renew at the then posted 9m no-penalty rate 0.5% and would confirm the new rate after the grace period, i.e. 11 days after maturity.  I will need the funds to potentially buy an apartment in July so it will be interesting to see how "painful" the process will be based on the above comments...

FYI, I also asked if they would match Discover Bank's 1.49% money market rate (http://www.discoverbank.com/money-market.html) on deposits over $100K (Ally's rates are not tiered but is 1.39% flat today) but they would not.

1
Comment #15 by Cedar Park (anonymous) posted on
Cedar Park
I had 12 CDs with Ally mature on February 20 - 22.  I called Ally and did the following:

 

1. Redeemed one CD outright.

 

2. Renewed 10, pulling out the interest, for the 5 year term with the 0.5% loyalty bonus.

 

3. Took one large CD, split it into five 5-year CDs without the loyalty bonus plus took the remainder from the large CD, added the interest from the other CDs, and opened a 6th 5-year CD for the same term as the other five.  I split the large CD into smaller CDs in case I need to break any of them for some reason, thus I wasn't too concerned about not getting the renewal bonus.

 

I have a few more CDs that mature this week and will call Ally today or tomorrow to renew them for the 5-year term with the 0.5% loyalty bonus.

2
Comment #16 by Anonymous posted on
Anonymous
You can't split your account into smaller sizes and still get the loyalty program.  This may be a reason to open a lot of small accounts in the future but who knows if they offer the loyalty program to small accounts.

1
Comment #17 by Robert (anonymous) posted on
Robert
I received a CD maturity notice and the bank automatically offered a 0.25% renewal bonus, plus the offer of 0.25% if I wanted to switch terms.

When it gets closer, I'll have to see if I can get the 0.5%.

1
Comment #18 by Anonymous posted on
Anonymous
Large balance 9-month no penalty cd here maturing in a week, and I asked for the bonus on the chat.  Was told no bonus was offered at all, period.  Definitely doesn't seem to match up with what they are running for commercials with telling one customer one thing, and another customer something completely different.

Where's my pony??

2
Comment #19 by Anonymous posted on
Anonymous
I contacted Ally about a CD maturing since it was a holiday and weekend upon maturity, they suggested to me to call back during the grace period to tell them my final decision (if I was going to renew or not) and perhaps the interest rates will change.  I agreed, but told them to leave the money in the CD and to NOT transfer it into my Savings acct. during the grace period.  They agreed they are supposed to leave it in the CD, but the rate may change to the new rate.

On the date of maturity, I called them back but only after checking online first.  I've learned that Ally does their processing between the hours of 11 - 1 AM Eastern Time.  When I went online, I learned that someone had moved all the money out of the CD and put it into the Savings acct....like I told them NOT to do. 

I immediately called them and asked them to pull the records up of my last phone call, and they verified my instructions.  Realizing the mistake was on their end, I asked if the money could be put back in the CD, which had a much higher interest rate than the Savings, but the CSR said no.  After being on hold, she checked with the Banking Operations Manager, and because the error was on their end, they credited me the amount of interest I would have received if the money were in the CD until the time I closed the CD in good faith.

I really like Ally and this was my first negative experience, but they tried to remedy the situation.  I continue to do my banking there and enjoy the ability to call them 24/7 and use the chat as well.

2
Comment #20 by Anonymous posted on
Anonymous
Just received an emal offering an extra .50% on a maturing CD from Ally.

1
Comment #21 by Anonymous posted on
Anonymous
Assume you have an Ally 5 year CD and the rates start going up (what a great problem to have).  How would you calculate when is the optimal time to take the 60 day penalty and get the higher interest rate?

1
Comment #22 by Anonymous posted on
Anonymous
I recently had 2 CD's marure within a couple weeks of eachother.  I moved the first one to a different back via ACH.  The process was easy, working with the CSR on the phone.  It took two business days for the funds to arrive at the new bank.  For the second CD, the process was the same but it took five business days for the funds to arrive at the new bank.  In both cases I was offered the half-point bonus ton renew, but I declined becaue the rates were better at the new banks.

0
Comment #23 by Anonymous posted on
Anonymous
I don't know where else you can lock in such good rates and still have a small early withdrawl penalty like 60 days.

2
Comment #24 by Hal (anonymous) posted on
Hal
For what it’s worth, two weeks ago via secure email I closed an Ally Flex CD about 3 weeks early and had them deposit the funds in my Ally Money Market.  No problem at all.  I agree with the “Go Ally” above.  Hope the new rules do not affect such good service.

1
Comment #25 by Errol Reiter (anonymous) posted on
Errol Reiter
Ally misleads and misrepresents when it claims that it pays interest immediately on deposits from external accounts.  When an account holder, while on the Ally website, orders an ACH transfer from external account, Ally changes the order from "immediate" to "scheduled for the next day".  But they process the ACH that night.  The effect is that the funds leave the external bank the next day and are received by Ally the next day and interest at Ally begins the next day.  Contrast that with the same transaction at a more honorable bank like American Express Bank.  The ACH would post to AmEx the same day, the funds would leave the external bank the next day and would be received by AmEx the next day and AmEx would begin paying interest the next day.  In both cases, the funds leave the external bank on the same day, are received by the receiving bank on the same day, and interest begins to be paid by the receiving bank on the same day.  Ally's claim of advantage is a false claim. 

Not only does Ally falsely claim advantage for incoming ACH deposits, but Ally's ACH service for withdrawals is actually inferior to many better banks.  Although Ally will debit your Ally account immediately, they do not process the transfer to the external account that night.  They keep the account holders funds for a day or 2 for their own use and pay no interest on it.  Better banks also debit you account immediately but process the ACH that night and the funds are in your external account the next morning.

0
Comment #26 by Anonymous posted on
Anonymous
Ally just lowered their saving rate to 1.30% from 1.39. This getting very depressing! :(

1
Comment #27 by Anonymous posted on
Anonymous
Please be careful about CSR's claiming 60-day-penalty cannot be changed! 2 CSRs told me that penalty cannot be changed on existing CDs, but said they cannot not put it in writing for me. So, I emailed the bank twice to get at least something on this and 2 email responses I got (from 2 difference CSRs) both said *new* penalties would apply to existing CDs, just like any other new terms and conditions would apply to existing accounts.

I finally called again and spoke to a supervisor. She also confirmed that new terms and conditions would apply if they were to change them. She said she will let at least one of the CSRs who told me otherwise that they are giving out wrong information (they were both in the same call center).

So, as far as I am concerned, unlike the CD rates, the early-withdrawal-penalty is NOT guaranteed.

1