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Ally MM/OSA Rate Decrease

Wednesday, November 13, 2013 - 8:50 PMAlly Bank - Details
Ally reduced the APY on its' Money Market
and Online Savings Accounts (from 0.86%)
to 0.85% today.
8
cumuluscumulus297 posts since
Jan 16, 2010
Rep Points: 1,372
1. Thursday, November 14, 2013 - 7:42 AM
I never quite understood their frequent 1-basis point changes.  Seems like a lot of fuss for very little...
7
larkinlarkin62 posts since
Jun 18, 2010
Rep Points: 274
2. Thursday, November 14, 2013 - 11:53 AM
Meaningless. Who is going to open or close accounts due to a change of .01% in yield?
6
ShorebreakShorebreak2,371 posts since
Apr 6, 2010
Rep Points: 12,641
3. Thursday, November 14, 2013 - 8:20 PM
#2 larkin
> I never quite understood their frequent 1-basis point changes.  Seems
> like a lot of fuss for very little...
>
Sometimes it's all about a bank making more money.  For example Ally
gives customers rates and APY's rounded to two decimal digits; internally
Ally maintains rates to five decimal digits. So while both a rate=0.84525%
and a rate=0.84725% produce an APY=0.85% rounded to two decimal digits, the
former is more profitable for the bank.

By oscillating the rate, the bank can change the APY it quotes to you
from 0.85% one day, to 0.84% another day, and back to 0.85% again; while
it appears to be a non-event (when looking only at the rounded two decimal
digit APY result), in fact the bank is paying you less.

In other industries we refer to this as product shrinkage!
4
cumuluscumulus297 posts since
Jan 16, 2010
Rep Points: 1,372
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