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Ally Bank Cuts Rates - Linked to the GMAC Bailout?


After Tuesday's WSJ article reported on GMAC being in talks with the government for another injection of capital, there were fears that we would soon see the effects to Ally Bank deposit rates. The article also mentioned that as part of the agreement, GMAC would have to keep deposit rates at Ally Bank below certain levels (see post). I don't know if this issue had any direct effect, but Ally Bank rates did fall today.

The biggest drop was the online savings account rate which fell from 1.70% APY to 1.55% APY. The money market account rate fell - 1.65% APY to 1.55% APY. It's interesting to see these two rates the same. My guess is that we'll likely see a rate cut on the money market next week to something like 1.45%. It has recently been common among internet banks to offer both a money market account with limited check writing and a savings account without checks. Without the cost of checks, banks can typically offer a little higher rate on the savings account. Below is the full list of the old and new rates as of 10/30/09. Refer to Ally Bank for the latest rates.

Account 10/29 10/30 Change
Savings 1.70% 1.55% -15
MMA 1.65% 1.55% -10
No-Penalty CD
9-month 1.60% 1.55% -5
Classic CDs
3-month 1.15% 1.10% -5
6-month 1.50% 1.45% -5
9-month 1.55% 1.45% -10
12-month 2.00% 1.95% -5
18-month 2.00% 1.95% -5
24-month 2.25% 2.20% -5
36-month 2.70% 2.60% -10
48-month 2.85% 2.80% -5
60-month 3.35% 3.25% -10

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).

This New York Times article has more on this possible third rescue of GMAC. I'm afraid this news isn't helping GMAC and Ally Bank's reputation. This SmartMoney commentary has some harsh opinions. I think it's a little unfair since Ally Bank is doing more than just offering high rates to attract deposits. Ally Bank has no monthly fees, and it has many great online banking features. For example, they have one of the best ACH transfer services with fast transfers, short holds, and easy linking of new accounts.
Related Pages: Ally Bank

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  |     |   Comment #1
I guessed this was going to occur and pulled all my funds out of my Ally savings account on Wednesday. I'm going to leave a small amount in the money market account since I still have CD accounts that are yet to mature. The interest from each CD is transferred into the money market account each month. Cest la vie.
  |     |   Comment #2
Perhaps we will see less of the taxpayer funded Ally ads that proliferate every outlet from the internet to television. We the taxpayers are just throwing more money down one of these "too big to fail" rat holes once again with this latest infusion of funds into GMAC.
  |     |   Comment #3
Where did you move from ally to?
  |     |   Comment #4
"Anonymous said...
Where did you move from ally to?

1:22 PM, October 30, 2009"

I moved to a sound financialy, local credit union with a tiered interest rate checking account paying 1.82% APY on my funds and with loads of features.
  |     |   Comment #5
I think it is time I shut my account down at Ally. There are too many other online banks that are more stable and not always lowering the rates. See ya, Ally!
  |     |   Comment #6
I think that we should keep ally online saving, since it has no maintainment fees and provides unlimited external links. In addition, it transfer money very quickly.
Maybe just put 10 dollars or so in it. :)

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