Deal Summary: 1-year CD, 1.30% APY (increase of 25 bps); Also, rate increases on 5-year CD, 2-year Raise Your Rate CD and 4-year Raise Your Rate CD.
Ally Bank increased the rate of its 1-year CD by 25 basis points. The new rate is now 1.30% APY for all balances. In addition, Ally increased the rates by 10 basis points of its two Raise Your Rate (RYR) CDs. The 2-year RYR CD has a 1.40% APY, and the 4-year RYR CD has a 1.50% APY. The 1-year CD and the two RYR CDs currently have no rate tiers. There is no minimum deposit to qualify for the top rates.
The 5-year CD used to require a $25k minimum to qualify for a 2.00% APY. Smaller balances earned lower rates. That has been removed, and now there is no minimum balance to qualify for the 2.00% APY. Note, Ally started rate tiers in 2015, and the rate tiers still apply to some CDs.
|2.00*%||-||-||Ally Bank||High Yield 5 Year CD|
|1.50*%||-||-||Ally Bank||Raise Your Rate 4-Year CD|
|1.40*%||-||-||Ally Bank||Raise Your Rate 2-Year CD|
|1.30*%||-||-||Ally Bank||High Yield 12-Month CD|
The above CDs are also available as IRAs (Traditional, Roth or SEP), earning the same APYs with the same minimum deposit requirements.
These new rates aren’t exceptional, but they’re competitive with other major internet banks. It’s interesting to note that Capital One increased its 1-year 360 CD rate to 1.30% APY earlier this month. The latest Fed rate hikes and bank competition appear to be having an effect, at least on internet bank CD rates. Hope we’ll soon see upward movement on savings account rates.
One advantage Ally’s 1-year CD has over Capital One’s 360 1-year CD is a lower early withdrawal penalty (EWP). Ally’s 1-year CD EWP is 60 days of interest. Capital One’s EWP is three months of interest. Even though other internet banks are offering higher 1-year CD rates, the lower EWP can make Ally’s CD a better deal. Here’s a comparison of 1-year CDs at Ally, Capital One and PurePoint Financial using our Early Withdrawal Penalty Calculator.
Higher Raise Your Rate (RYR) CD Rates
In addition to the the 1-year and 5-year CD rate increases, Ally increased the rates of its two RYR CDs. This is the first time the RYR CD rates have gone up since 2015. For those who have Ally’s RYR CDs, this might be a good time to use the bump-up option. The 2-year RYR CD has one bump-up option and the 4-year has two.
A Few Noteworthy Ally Account Features
As mentioned above, Ally’s CDs have mild early withdrawal penalties as compared to CDs at other banks and credit unions. Ally has the following description of its EWPs on its website for CDs purchased or renewed after 12/07/13:
- 24 months or less: 60 days of interest
- 25 months – 36 months: 90 days of interest
- 37 months – 48 months: 120 days of interest
- 49 months or longer: 150 days of interest
One downside with Ally’s CDs is that they don’t allow partial early withdrawals. If you need some of your CD principal before maturity, your only option is to close the CD and withdrawal the entire amount.
One positive feature of Ally’s CDs is their “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.
Another nice aspect of Ally’s CDs is their online CD management software. When you log into your account, you can change things like how interest is disbursed. Ally allows you to have the interest paid monthly, quarterly, semi-annually or annually. You can also change how interest is paid. You can choose for the interest to be credited back to the CD, paid out to your account or paid as a check. The software can also be used to change renewal options and to request an early withdrawal. The software lets you see the current balance and the post-penalty balance before you make the decision to close the CD early. You have the choice to have the funds from the closed CD transferred online to your account or sent as a check.
Another nice aspect of all of Ally’s accounts is the ability to designate beneficiaries. You can choose up to 10 beneficiaries for each of your non-IRA accounts, and you can choose the designation of either “In Trust For” or “Payable On Death”. Beneficiary designations can be done online in the application or with the account management software after the account has been opened.
Ally also allows customers to open an account in the name of a Trust.
Headquartered in Midvale, Utah, Ally Bank is currently the 23rd largest bank in the country, with assets in excess of $114 billion and over 2.2 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 the 13-month select CD 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
Ally Bank (FDIC Certificate # 57803) has an overall health grade of "A+" at DepositAccounts.com, with a Texas ratio of 1.76% (excellent) based on December 31, 2016 data. In the past year, Ally has increased its deposits by $11.15 billion, an excellent annual growth rate of 20.04%. Please refer to our financial overview of Ally Bank for more details.
How the 1-Year CD Compares
When compared to 101 similar length-of-term CDs offered by internet banks tracked by DepositAccounts.com, 12 banks offer a higher rate than Ally’s 12-month CD rate. The table below shows how Ally’s 12-month CD compares to a few of the top 1-year CDs from internet banks:
|Interest Rate||CD Length of Term||Early Withdrawal Penalty||Internet Bank|
|1.45% APY||1-year CD ($10k min)||181 days||PurePoint Financial|
|1.35% APY||1-year CD ($2k min)||90 days||Synchrony Bank|
|1.30% APY||1-year CD (no min)||60 days||Ally Bank|
|1.30% APY||1-year 360 CD (no min)||3 months||Capital One Bank|
The above rates are accurate as of 3/24/2017.