> 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