Hi all, I came across this site after searching for more information on what appears to be Ally's 5 yr CD penalty advantage & was curious about people's latest thoughts on the topic..?
During an Ally chat, a CSR confirmed-elaborated on their deposit agreement terms, i.e. their 5 yr CD continues to carry only a 60 day interest penalty (calculation based on opening balance x (.0276)* {based on its current interest rate of 2.76% not its 2.8%APY} divided by 365 {i.e. days} x 60 {i.e days} = 60 day penalty ) so I could withdraw funds for whatever reason I elect (e.g. to pursue any future interest rate increases if fiscally sound) & that Ally would not be able to deny any request for early withdrawal & any Ally deposit agreement changes would not take effect until after the CD matures.
Since the 5 yr CD would potentially lock principal in for its 5 yr maturity period (unless the depositor is ready to pay the 60 day interest account closure penalty) & there is no minimum deposit requirement, one of the best points brought up is the idea of spreading out the investment over multiple smaller CDs to minimize penalties for any partial principal withdrawals that a larger CD wouldn't otherwise offer.
Regarding the GMAC-TARP issue do you think Ally is more closely supervised in their current position making it less likely they'd go under structural management change? Would accounts really be any less secure than any other FDIC insured bank? Their CSR assured me Ally accounts are just as secure as all FDIC insured bank accounts.. I know there are higher 5 yr CD rates but I think I prefer the added flexibility-liquidity of Ally's 60 day interest penalty & that seems to justify my consideration of Ally 5 yr CDs where I may otherwise have preferred to keep funds in liquid no-penalty accounts. How much longer do you anticipate Ally will continue its 60 day early withdrawal penalty advantage?
The principal protected yield & liquidity analysis seems most favorable for Ally's current 5 yr CDs with its 60 day early withdrawal penalty advantage unless someone can point out other options worth considering? -Thanks
References (how I got here->let me know if there are other references worth a look): http://www.bankrate.com/funnel/cd-investments/cd-investment-results.aspx?local=false&tab=CD&prods=19&ic_id=CR_searchCDNational_cd_5yrCD_V1 https://www.ally.com/bank/high-yield-cd/index.html?CP=48822762#tabs=rates http://www.google.com/#hl=en&source=hp&q=CD+early+early+withdrawal+penalty+60+day http://financialplan.about.com/od/savingmoney/qt/cd-withdrawal-penalty.htm http://www.depositaccounts.com/blog/2010/01/huge-change-to-ally-bank-cds-will-benefit-savers.html http://www.depositaccounts.com/blog/2010/03/update-on-ally-banks-cd-early-withdrawal-penalty.html http://www.depositaccounts.com/blog/2010/03/ally-banks-5year-cd-and-2year-raise-your-rate-cd-which-is-better.html http://www.depositaccounts.com/blog/2010/03/future-of-ally-bank-as-gmac-tries-to-repay-its-tarp-debt.html http://www.bargaineering.com/articles/ally-bank-cd-60-day-early-withdrawal-penalty.html http://en.wikipedia.org/wiki/Gmac http://en.wikipedia.org/wiki/Ally_Bank http://www.bankrate.com/finance/cd/cd-penalty-often-worth-the-cost.aspx Using any Early Withdrawal Penalties as Income Tax Deductions:
http://taxes.about.com/od/deductionscredits/qt/earlywithdrawal.htm http://www.associatedcontent.com/article/1529544/using_early_withdrawal_penalties_as.html?cat=3
