CD Rates Summary November 19, 2019
Federal Reserve, the Economy and CD Rate Forecast - Nov 19, 2019
Banking 101: Why You Need an Emergency Fund and How to Build It
Banking 101: Understanding the Different Types of Savings Accounts
More Rate Cuts at Ally Bank
POSTED ON BY Ken Tumin
This is the second Friday in a row that Ally Bank made significant rate cuts, and it makes you wonder if the pressure from the FDIC is having an effect. On the positive side, the no-penalty 9-month CD rate remains at 2.30% APY and the online savings account rate remains at 2.05% APY.
The largest rate cut was on the 3-month CD. That rate fell from 1.60% to 1.40%. With a 3-month CD rate this low, I don't know why anyone would open this rather than the online savings account. The 12-month CD rate also had a sizable rate cut. It fell from 2.49% to 2.35% APY.
Last week, the savings account rate fell, and the money market account rate held. It's the other way around this week, but the money market rate drop was minor with a cut of 5 basis points. It's now 1.85% APY.
The table below shows how the deposit rates have fallen over the last two weeks.
For more information on Ally Bank and the savings accounts and CDs, please refer to this post. Ally Bank deposit accounts are FDIC insured (FDIC Certificate # 57803).
Top Certificate of Deposit Rates
The largest rate cut was on the 3-month CD. That rate fell from 1.60% to 1.40%. With a 3-month CD rate this low, I don't know why anyone would open this rather than the online savings account. The 12-month CD rate also had a sizable rate cut. It fell from 2.49% to 2.35% APY.
Last week, the savings account rate fell, and the money market account rate held. It's the other way around this week, but the money market rate drop was minor with a cut of 5 basis points. It's now 1.85% APY.
The table below shows how the deposit rates have fallen over the last two weeks.
Account 5/29 Rates 6/5 Rates 6/12 Rates 2-Week Chg
Term APY APY APY BPS
Savings 2.25% 2.05% 2.05% -20
MMA 1.90% 1.90% 1.85% -05
No-Penalty CD
9-month 2.50% 2.30% 2.30% -20
Classic CDs
3-month 1.70% 1.60% 1.40% -30
6-month 2.10% 2.00% 1.90% -20
9-month 2.60% 1.90% 1.85% -75
12-month 2.80% 2.49% 2.35% -45
18-month 2.60% 2.40% 2.30% -30
24-month 2.75% 2.55% 2.50% -25
36-month 3.10% 3.00% 3.00% -10
48-month 3.25% 3.00% 3.00% -25
60-month 3.50% 3.50% 3.45% -05
For more information on Ally Bank and the savings accounts and CDs, please refer to this post. Ally Bank deposit accounts are FDIC insured (FDIC Certificate # 57803).
Top Certificate of Deposit Rates
As always, thank you banking guy for all.
Or is it an accounting trick where they don't want the money in a savings account vs. a CD b/c they can do more behind the scenes leveraging on top of CD deposits?
The no-penalty CD withdrawal takes a few days longer to get your money out, but it seems like a decent deal compared to letting the money sit in a savings account for a while.
I suppose the main risk is that there will be a "bank holiday" and you hear about it four days in advance (which isn't long enough to get your money).
"Go ahead and jump."
I understand your frustration about the falling rates and moving your money around as rates keep falling. It does seem like a futile attempt to earn a bit more money on your funds. I had a rather large amount of money (close to 1/2 million) in the Vanguard Tax Exempt MM Fund last year when it was paying over 5%!!! Wow, was I making a lot of money on my account. Then rates plummeted and the fund is now under 0.5% APY. I know that the difference between 0.5% and 2.8% is not that great. But I still get close to a 5 figure interest payout by moving my money. Even though the Vanguard account interest is tax exempt, I am able to get the higher rate account interest payout as tax exempt as well, so why would I be lazy to move my money to get that free money? If I didn't do that, I am either too lazy or too stupid to move my funds. I have a habit of procrastinating a lot, but if I did that for my funds, I am only shortchanging myself. I would only leave my money in Vanguard if I had some kind of "loyalty" feelings about leaving my money with them. They are a good company in keeping operating expenses low, but I don't have that great of a personal bond with the mutual fund company.
You are welcome. People come from many different viewpoints and have different ways of reacting to something that people state. I used to chat almost 24/7 back when I first got online in a chat room and came across people of varying ages, personalities, and attitudes which ranged from the extreme coarseness to the extreme politeness.
Just remember and old saying that was quoted by Nuveen investments many years ago- it is not what you earn, but what you keep that matters. Sometimes a higher rate is more attractive, but it all boils down to your net profit.