Update on Ally Bank: CD Policies and New Commercials
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.
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