Ally Bank Increases 11-Month No Penalty CD Rates

POSTED ON BY

Deal Summary: 11-Month No Penalty CD: 1.60% APY, $25k minimum (increase of 10 bps).

Availability: Nationwide

For the second time this week, Ally Bank raised the rates on some of its CDs. Today it increased the rates of its 11-month No Penalty CD and its 18-month CD. The 11-month No Penalty CD rate hike is the most noteworthy. All three rate tiers went up. Below is the summary of the new rates and how these rates have changed:

11-Month No Penalty CD

  • 1.60% APY, $25k min (was 1.50%)
  • 1.35% APY, $5k min (was 1.25%)
  • 1.15% APY, no min (was 1.00%)

18-Month CD

  • 1.75% APY, $25k min (was 1.70%)
  • 1.60% APY, $5k min (no change)
  • 1.50% APY, no min (no change)

The above rates are effective as of 12/8/17.

The 18-Month CD is also available as IRAs (Traditional, Roth or SEP), earning the same APYs with the same minimum deposit requirements. However, the 11-month No Penalty CD is not available as an IRA.

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.75*%$25k-Ally BankHigh Yield 18-Month CD
OTHER TIERS: 1.50% Up to $5k | 1.60% $5k - $25k
1.60*%$25k-Ally BankNo Penalty 11-Month CD
OTHER TIERS: 1.15% Up to $5k | 1.35% $5k - $25k
Accounts mentioned in this post. Rates as of December 12, 2017.

The last time Ally increased the No Penalty CD rates was in June when the top APY first reached 1.50%. When that occurred, I discussed the possibility that this may be a way Ally Bank intends to compete with other internet banks that offer higher savings account rates. If you have a large balance in Ally’s savings account (which currently earns 1.25% APY on all balances), do you move your money to a higher-rate savings account at another bank or do you open one or more of these No Penalty CDs? It might be hard for many to justify opening an account at a new bank when you can get a much higher rate with this No Penalty CD.

Another thing to consider with Ally Bank’s No Penalty CD is that there’s no reason to choose a shorter-term CD that has a lower rate. For example, there’s no reason to choose a 1.50% 6-month CD (at another bank) instead of Ally Bank’s 11-month No Penalty CD for a $25k+ deposit. With the no-penalty feature, you can make the No Penalty CD have a 6-month term by just closing it after six months.

There is one reason why you may want an Ally 3-month CD (which currently has rates that range from 0.30% to 0.39%). DA reader Cumulus describes a useful CD strategy that uses 3-month CDs in this forum post.

Here are some issues and features of the No Penalty CD to consider before applying. These are the same ones that I mentioned in June.

  • The No Penalty feature allows you to withdraw all your money, including interest earned, without any penalties, any time after the first 6 days following the date you fund your account. The 6 day exception is due to Federal Regulation D.
  • You can only withdraw your full balance early - you cannot make a partial early withdrawal.
  • Be careful if you open multiple CDs with funds from your savings account. As DA reader slovokia warned in the Forum, “each withdrawal from your savings account used to fund an Ally CD counts as a transaction against your 6 transaction limit.” If you plan to opening many CDs, you should consider funding the CDs from your Ally Interest Checking account which does not have this withdrawal limitation. If you exceed six electronic withdrawals per statement period in your savings account, Ally charges a $10 fee per transaction over the six transaction limit.
  • Ally Bank does not offer an IRA version of this No Penalty CD. All other of its CDs do have IRA versions.
  • Using Ally Bank’s online CD management system, you can close a CD without help from a CSR. According to an Ally Bank CSR, “when you make the request online via the Manage CDs link, the account is normally closed and the funds transferred internally immediately.” You can still make the request by phone or secure chat, but that will take “up to 1-2 business days.”
  • Another potential concern of any CD is that you’ll lock into a rate right before the CD rate goes up. To relieve these fears, Ally Bank has long had its “Ten Day Best Rate Guarantee.” This guarantee says that if you fund a new CD within 10 days of opening the account, you’ll get the best rate Ally offers for your term and balance tier if Ally’s rate goes up during that time.
  • You have 60 days to fund a CD before it closes automatically. Be aware that the rate guarantee only last ten days. If the CD rate drops after 10 days, and you still don’t have the CD funded, you’ll get the new lower rate instead of the rate that was in effect when the CD was opened.

Availability

Headquartered in Midvale, Utah, Ally Bank is currently the 19th largest bank in the country, with assets in excess of $130 billion and over 2.6 million customer accounts. Ally offers its services and product line to individuals 18 years or older, who have a valid Social Security number and a U.S. mailing address.

Applying for an Ally account can be done using Ally Bank’s online application or by calling Ally (877-247-2559). You can fund your new account in a few different ways:

  • Transfer from an Ally or non-Ally account
  • Check (by mail or Ally eCheck Deposit)
  • Wire transfer

Bank Overview

Ally Bank (FDIC Certificate # 57803) has an overall health grade of "A+" at DepositAccounts.com, with a Texas Ratio of 2.08% (excellent) based on September 30, 2017 data. In the past year, Ally has increased its non-brokered deposits by $12.69 billion, an excellent annual growth rate of 19.8%. Please refer to our financial overview of Ally Bank for more details.

How the 11-Month No Penalty CD Compares

Ally Bank now has competition on its No Penalty CD. CIT Bank recently started to offer an 11-month no-penalty CD. Bethpage Federal Credit Union was also offering a similar no-penalty 11-month CD as a promotion, but Bethpage recently ended this promotion.

The other alternative to these no-penalty CDs is a savings or money market account. The highest rate is 1.65% APY at Colorado Federal Savings Bank, but this requires a $50k minimum balance. The next highest is 1.55% APY at Incredible Bank with a $25k minimum balance. The savings accounts provide more deposit and withdrawal flexibility, but the rate isn’t guaranteed to last.

The table below compares Ally’s 11-month No Penalty CD with CIT Bank’s 11-month no-penalty CD and with the two top savings accounts.

Interest RateAccount (Minimum balance)Bank
1.65% APYPremier Savings Account ($50k min)Colorado Federal Savings Bank
1.60% APY11-Month No Penalty CD ($25k min)Ally Bank
1.55% APY11-Month No-Penalty CD ($1k min)CIT Bank
1.55% APYIncredible Savings Account ($25k min)Incredible Bank

The above rates are accurate as of 12/8/2017.

To review the top CD rates, both nationwide and state specific, please refer to our CD rates table.

Related Pages: Salt Lake City CD rates, 1-year CD rates, nationwide deals, Internet banks

Comments
stantheman
stantheman   |     |   Comment #1
So I called Ally over the phone and asked if they could close my 11 month 1.5% CD and convert it to a 1.6% CD and extend to the new term. I was told I have to close the old one and go through the process and open another. They didn't want to do this over the phone so I have to close, send the funds to my Dollar Direct savings (I don't have an Ally savings account.) and reopen a new 11 month CD. The rep didn't seem to interested to help me like I was bothering her. I was using this to store some of my emergency savings. Maybe I won't bother with Ally. Poor customer service. Oh.. and the Secure Chat was not available.
Cracker
Cracker   |     |   Comment #5
Why not open a savings account with them? There's no fee or minimum balance requirement. I just closed and reopened one online. I closed my CD and had the funds transferred to my savings account. Then I reopened it (and added additional money) and funded it directly from the savings account where the closed CD money went. Everything was done immediately. No waiting period as long as you don't need to transfer the money to or from an external account.
Sperry8
Sperry8   |     |   Comment #33
I am searching online and do not see a way to close. Where is it? It is not under "manage account"
EDIT: I finally found it. It's not under "close CD" but rather under "early withdrawal". then, under penalty it shows as $0.  Weird to have it this way but it works.
Point Twist
Point Twist   |     |   Comment #6
I would instead open up the free checking at Ally, transfer the money there, and then open the new CDs. This avoids excess withdrawals from the savings account and the delay transferring outside of Ally.

Might wait until Monday, not sure how the credit works closing and opening the CD. Would hate to lost interest over a weekend for such a small increase in rate.
Cracker
Cracker   |     |   Comment #8
If you do everything to internal accounts, it's all immediate when using their online account management tools. I was able to close a CD, transfer it to savings, and reopen it, all online and with immediate availability of funds. Easy Peasy.
Point Twist
Point Twist   |     |   Comment #9
Yes, of course.

The savings account charges $10 per excess transaction over 6 in 30 days. The checking account avoids that restriction. Opening up multiple No Penalty CDs from the savings account does not make sense.
TheBombingRange
TheBombingRange   |     |   Comment #10
You can open new CDs online? Do you mean the long application? I've been told to call Ally to open new accounts, it's way faster than waiting for the online application to be approved apparently. Is this new CD account open for you yet?
Point Twist
Point Twist   |     |   Comment #11
If you have an existing account, opening a CD and funding it from savings or checking should be instant. You might want to online chat with them to ask questions.
Cracker
Cracker   |     |   Comment #12
You can both open and close accounts online. If you're a preexisting customer with a login and user ID, it's super easy. All you need to do is select "Open account", then click what you want and how much for the opening deposit. Then select the method of funding. My account is open and funded with under 5 minutes of work.
Cracker
Cracker   |     |   Comment #13
Oops, that's redundant. Should say user ID and password.
JimDavis
JimDavis   |     |   Comment #32
Just to clarify, they open the CD with a start date of Saturday, not the the following business day?
stantheman
stantheman   |     |   Comment #2
And three days to the funds from my Ally CD to my Dollar Direct Account.
SYC
SYC   |     |   Comment #4
You can do this on-line yourself if you have an Online Savings account with Ally. You can open one on-line with Ally in an instant if you don't have one. Close the existing No Penalty CD and transfer the funds into the Online Savings account. Next transfer the funds from your Online Savings account to the new No Penalty CD.
Bill
Bill   |     |   Comment #14
stantheman - You may want to call Ally again and talk to another CSR. This morning a CSR closed two of my 1.5 accounts and made transfers to two new 1.6 accounts....all done by a single phone call that took about 10 minutes.
Stantheman
Stantheman   |     |   Comment #15
The Chat did not work and the rep was not helpful. Not going to bother with Ally. Took a while to get through too.
TheBombingRange
TheBombingRange   |     |   Comment #3
Definitely don't do any of that... I have dealt with some CSRs like that who don't like closing no penalty accounts. I've closed it over the phone before, they always want to know why, I say I need access to the money. You are 100% allowed to close the CD at any time, over the phone or online, between 6 days and 11 months. Then you can use the same CSR or just call back to get another one to have them open a new No Penalty CD with the funds you just offloaded into an Ally Checking or Savings account. The CD has nothing to do with "new money" so **** that. Also, they won't convert CDs to a higher rate, so the only thing to do is close and reopen it. Open an Ally Savings or Checking account, it's easy and allows you to do transfers like this in a cinch. You can leave it empty if you want, no minimum balance or fees.

On a similar note, I just closed my CD using the online interface, where it immediately deposited into my savings account. I then took the balance I needed and added it to my maturing 3 month CD (thank you cumulus). When I did this, it said an APY of 1.15% on the confirmation page, then 1.00% on the actual CD page after I added to the balance. They say the rate will update when the grace period ends. If not, I'll be sure to call them to take care of it.
cumulus
cumulus   |     |   Comment #27
You should not have to call them for this. I have done it before and the interest is updated inclusive of the loyalty reward (.05%), with the transaction history reflecting the new APY (1.65% in this case) as of the CD opening date.

Seems like it's built into their software :)
Point Twist
Point Twist   |     |   Comment #7
No Penalty CDs opened within the past 10 days should automatically reflect the increased rate by midnight tonight, per customer service.
Stantheman
Stantheman   |     |   Comment #16
They did not say the at my CD would increase automatically. The rep was not helpgul and her attitude was like I was bothering her. I also don't want another savimgs account. Closed the CD. Would rather deal with a company that has good customer service.
Ginzy
Ginzy   |     |   Comment #17
Closed out my 1.5% and opened the new 1.6% all over the phone with a very helpful CSR. Requested a check for the current interest, principal amount over to the new 11 month no penalty CD. New account number and everything in minutes. I was told it would be funded by the end of the day. They were terrific!
Stantheman
Stantheman   |     |   Comment #19
The money is going to my Dollardirect savings for 1.5% so no big deal. One less account to track. I'd don't want to waste my time for .10% more than my savings accoumt. I may look at investing this else where with the possibility of rates increasing with a possible rate hike. Does Ally savings accounts take 3 days to process an external transfer? Dollar does it overnight.
barry_NY
barry_NY   |     |   Comment #18
Do they automatically bump up the rate on new accounts (under 10 days) or do you have to ask them? The rate hasn't changed yet. Maybe it takes them a day.
barry_NY
barry_NY   |     |   Comment #20
Sorry, didn't see the comment above posted between my first reading and my question.
payitforward
payitforward   |     |   Comment #21
Done over the telephone!! I just closed out my 11-mo. no penalty CD that was earning 1.5% and reopened the new 11-month no penalty CD now earning 1.6%. I'm not sure why the other poster(s) experienced problems. I did have to wait approx. 10 mins. for a representative.
payitforward
payitforward   |     |   Comment #22
Much thanks to Ken for the money-making updates. 
Saver
Saver   |     |   Comment #26
Yes...Thank you Ken! Just closed and reopened online in minutes. Much appreciated!
Bob
Bob   |     |   Comment #23
I currently have an Ally savings account and no penalty CDs. If I want to open a new CD, does anyone know if they do a credit pull for existing customers? Trying to figure out if I need to unfreeze credit.
Cracker
Cracker   |     |   Comment #24
No, you won't need to. I have a freeze as well and it wasn't a problem. They could possibly do a soft pull, but that shouldn't affect your credit score or cause issues with a freeze. Soft pulls are allowed even with a freeze for the reports of existing customers. Freezes only apply to hard pulls.
Bob
Bob   |     |   Comment #25
Thanks so much! Appreciate your reply.
RJM
RJM   |     |   Comment #28
Crap. I have multiple of their 1.5% CDs. And closing them early means the interest will be earned this year rather than next. I always like to defer things but not at the expense of the rate difference.
This is probably going to take me 20 minutes to close them all & reopen them.
I am currently over the FDIC limit because of my aversion to opening accounts at lots of other places.

I have a feeling that closing accounts costs you a days worth of interest too. Although I don't know if that is absolutely true or not.
Bill
Bill   |     |   Comment #29
You can always revert to the 'mattress method'....might make things much simpler for you. ;-)
TheBombingRange
TheBombingRange   |     |   Comment #30
It doesn't cost a day worth of interest because interest for today posted at 12 AM today. If you close the accounts the interest for tomorrow will post at 12 AM tomorrow. What I'm suprised about is that when I added to the balance of my 3 month CD that was renewing, the interest rate went to 1.00% for some reason. That interest rate, plus the 0.05% renewal bonus, seems like it won't change until 2 more days, the end of the 10 day grace period. I thought the rate would at least update to 1.60% overnight. I guess for the next renewing CD I open, I have to add to it and change it to a No-Penalty the day before it renews, so I don't lose any interest.
RJM
RJM   |     |   Comment #34
Im on chat with a rep. She is closing them all at once and sending to my checking.
I will reopen fewer accounts I guess.

I get a dashboard error all too often with ally.

We’re not able to show your accounts right now.
Try again later, or call us for help. We’re here 24/7.
Stantheman
Stantheman   |     |   Comment #31
Happy that Ally transferred the funds from the CD that I closed with them overnight. Didn't take the 3 days the rep said it would.
Volstagg
Volstagg   |     |   Comment #35
Closed out one no penalty CD online, tried to open a new one and was told they would get back to me in 3-5 days with a determination of if they would let me open the new account. What?? Had an Ally account for years, first time ever they wouldn't open a CD online immediately. What a pain.
mst3k
mst3k   |     |   Comment #37
They did the same for me. They said my phone number could not be confirmed to be billed to my address (it is a prepaid phone). I have been a customer for over 10 years.
hank
hank   |     |   Comment #36
I called them. They changed the old cd from 1.5 to 1.6 in 5 minutes or less
mst3k
mst3k   |     |   Comment #38
Can anyone confirm for me if No-penalty cds are actually accruing interest on days 1-6? For example, if you open a $50K cd at 1.5% and are making $2.05 per day, do you start day 7 with $50,012.30? If the answer is no - then moving to a 1.6% cd will take a bite of your interest. The difference between 1.5 and 1.6 would take almost 3 months to make up the difference *IF* you lose 6 full days of interest.
larkin
larkin   |     |   Comment #39
I opened on Friday. Got all accrued interest on the two that I closed. Today the new ones are showing accrued interest earned from Friday.
Tenth Day
Tenth Day   |     |   Comment #40
Ally applies the highest rate during the first 10 days of the CD.

The highest rate is applied retroactively to the first opening day.

If the rate increases after open, the increase is applied on the 10th day.

There is no reason to close a CD within the first 10 days and open a new one if rates have increased.
Ally Bank Ups Mid-Term and Long-Term CD Rates

Deal Summary: Noteworthy rate increases: 5-year CD, 2.35% APY ($25k+); 18-month CD 1.70% APY ($25k+)

Availability: Nationwide (internet bank)

This morning, Ally Bank increased the rates on its mid-term and long-term CDs. The 5-year CD rate increased 10 bps to 2.35% APY for deposits of at least $25k. The 5-year CD now has three rate tiers (2.25% APY, $0+, 2.30% APY, $5k+; 2.35% APY, $25k+). Also noteworthy, the 18-month CD rate increased 35 bps to 1.70% APY for deposits of at least $25k. The two Raise Your Rate (RYR) CDs and...

Continue Reading
Ally Bank Hikes Rates on Savings Account and 1-Year CD

Deal Summary: Online Savings Account, 1.25% APY, No minimum balance; 12-month CD, 1.65% APY ($25k+), 1.55% APY ($5k+), 1.50% APY ($0)

Availability: Nationwide (internet bank)

This morning, Ally Bank increased the rate of its Online Savings Account by 5 bps. The new rate is now 1.25% APY. This same rate change also took effect on the IRA Online Savings Account. The 1.25% APY applies to all balances. The savings account has no monthly maintenance fees and no minimum balance requirement.

In addition to the savings accounts, Ally’s 12-month CD...

Continue Reading
Another Savings Account Rate Hike at Ally - MM Rate Up, But Still Low

Deal Summary: Online Savings Account, 1.20% APY, No minimum balance

Availability: Nationwide (internet bank)

This morning, Ally Bank increased the rate of its Online Savings Account by 5 bps. The new rate is now 1.20% APY. This same rate change also took effect on the IRA Online Savings Account. The 1.20% APY applies to all balances. In addition to the savings accounts, Ally’s money market account also had a rate increase. That rate increased from 0.85% to 0.90% for all balances. All of these accounts have no monthly maintenance...

Continue Reading
Ally Bank Ups Savings Account Rate to Highest Level Since 2010

Deal Summary: Online Savings Account, 1.15% APY, No minimum balance

Availability: Nationwide (internet bank)

This morning, Ally Bank increased the rate of its Online Savings Account by 10 bps. The new rate is now 1.15% APY. This same rate change also took effect on the IRA Online Savings Account. The 1.15% APY applies to all balances. The account has no monthly maintenance fees and no minimum balance requirement.

It’s yet another example that the recent Fed rate hikes are having an effect. The last Ally savings account rate...

Continue Reading
Ally Bank Again Increases the Rate on Its 11-Month No Penalty CD

Deal Summary: 11-month No Penalty CD: 1.50% APY, $25k minimum (increase of 15 bps).

Availability: Nationwide

For the second time in the last week, Ally Bank raised the rates of its 11-month No Penalty CD. This is an especially pleasant surprise since last week’s rate hike was such a good deal. You’ll need a minimum deposit of at least $5k to benefit from this rate increase. The top-tiered rate increased 15 basis points to 1.50% APY while the mid-tiered rate increased 20 basis points to 1.25% APY....

Continue Reading

More Past Offers