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Ally Bank Increases Rates - FDIC Restrictions Having an Effect?
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POSTED
ON BY Ken Tumin
I'm happy to report that Ally Bank raised a couple of its rates today. Its online savings account rate increased from 1.55% APY to 1.64% APY, and its 12-month CD rate increased from 1.95% APY to 1.99% APY. The changes are small, and they don't make up for many past rate cuts. Nevertheless, it's nice to see a rate hike for a change.
I didn't expect rate hikes from Ally Bank after reports came out last month that GMAC (the parent of Ally Bank) is a nearing completion of an agreement with the U.S. government for receiving another round of taxpayer money. The agreement would also include restrictions on interest rates that Ally Bank could offer (see post). Also, according to this WSJ article from last week, "The FDIC asked GMAC officials to keep the rates on deposits low enough so the bank wasn't one of the nation's top five rate payers, as measured by Bankrate.com".
I took a look at Bankrate.com this morning, and even with these new rates, Ally Bank isn't in the top five. For savings accounts, they're now # 8. For 12-month CDs, they're now # 10 (make sure to click on APY in Bankrate's table to sort by APY). Perhaps that's why Ally Bank didn't increase the 12-month CD rate to 2% APY.
For those who recently opened the Ally Bank 12-month CD, you'll be happy to know this rate increase should apply to you also. One new CD feature that Ally Bank recently added is their Ten Day Rate Guarantee. Here's how Ally Bank describes this:
So if you had opened the 12-month CD in the last 10 days, you should be able to get the 1.99% APY. When I contacted an Ally Bank CSR, I was told that their system will automatically give you the higher rate.
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).
Other Competitive Savings Account and CD Rates
I didn't expect rate hikes from Ally Bank after reports came out last month that GMAC (the parent of Ally Bank) is a nearing completion of an agreement with the U.S. government for receiving another round of taxpayer money. The agreement would also include restrictions on interest rates that Ally Bank could offer (see post). Also, according to this WSJ article from last week, "The FDIC asked GMAC officials to keep the rates on deposits low enough so the bank wasn't one of the nation's top five rate payers, as measured by Bankrate.com".
I took a look at Bankrate.com this morning, and even with these new rates, Ally Bank isn't in the top five. For savings accounts, they're now # 8. For 12-month CDs, they're now # 10 (make sure to click on APY in Bankrate's table to sort by APY). Perhaps that's why Ally Bank didn't increase the 12-month CD rate to 2% APY.
For those who recently opened the Ally Bank 12-month CD, you'll be happy to know this rate increase should apply to you also. One new CD feature that Ally Bank recently added is their Ten Day Rate Guarantee. Here's how Ally Bank describes this:
When you fund your CD within ten days of opening your Ally account, you automatically get the best rate we offer during that time period.
So if you had opened the 12-month CD in the last 10 days, you should be able to get the 1.99% APY. When I contacted an Ally Bank CSR, I was told that their system will automatically give you the higher rate.
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).
Other Competitive Savings Account and CD Rates
