Deal Summary: Online Savings Account, 1.05% APY, No minimum balance
This morning, Ally Bank increased the rate of its Online Savings Account by 5 bps. The new rate is now 1.05% APY. This also applies to the IRA Online Savings Account. The 1.05% APY applies to all balances. The account has no monthly maintenance fees and no minimum balance requirement.
|1.05*%||-||-||Ally Bank||IRA Online Savings Account (Traditional, Roth, SEP)|
|1.05*%||-||-||Ally Bank||Online Savings Account|
Last month’s Fed rate hike appears to be having some effect. On Monday, Ally increased its 5-year CD rate to a level not seen since 2011, and today Ally raises its savings account rate to its highest level since 2011. The last time Ally increased the rate of its savings account was September 2015 when the APY inched up from 0.99% to 1.00%. Its lowest rate was 0.84% during two periods in 2012 and 2013. The rate slowly increased in 2014 when it finally reached 0.99% in December 2014. The last time Ally's savings account was at 1.05% was in March of 2011.
Ally Bank’s money market account rate remains at 0.85% APY for all balances. The advantage of the money market account over the savings account is that it offers limited check writing and debit card access. For several years, Ally’s money market account used to have the same rates as the savings account. That ended in January 2014 when the savings account rate started to rise above 0.85% while the money market rate held steady.
Ally’s savings account doesn’t have a history of being a rate leader for internet banks, but it has remained competitive for many years. Plus, it has features that other internet banks don’t have. One nice feature is Ally’s online transfer capabilities. It’s easy to link multiple external accounts for transfers. Ally allows large transfers to and from external accounts, and the transfers take place in one business day.
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. These feature makes it easy to maintain FDIC insurance on deposits in excess of $1 million. I described how this can be done in this blog post.
Thanks to DA reader buckeye61 who posted on the higher rate in the DA Forum.
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 an 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
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 Online Savings Account Compares
When compared to 211 nationally-available savings accounts from banks and credit unions tracked by DepositAccounts.com, only 5 banks offer higher rates for deposits under $10k. Four internet banks (CIT, Synchrony, GS and AloStar) and Alliant Credit Union also offer 1.05% APY on their savings accounts. The table below shows how Ally’s savings account compares with two of the top nationally-available savings accounts:
|Interest Rate||Minimum balance||Internet Bank|
|1.15% APY||none||Popular Direct|
|1.05% APY||none||Ally Bank|
The above rates are accurate as of 4/21/2017.