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Ally Bank News - Fee Changes and CD Renewal Bonus
POSTED
ON BY Ken Tumin
I just received a letter from Ally Bank which informs customers of changes that will go into effect on January 16, 2010. Most of the changes involve fee reductions. One change involves ATM fees. Ally Bank will refund all ATM fees instead of just $6 per month. Also, checks for your money market account will be free. Currently, only the first order of 50 checks is free.
On the downside, it added three clarifications to your Deposit Agreement which are a little worrisome. One states that "We reserve the right to suspend or close accounts for any reason, without prior notification."
I'm actually a little more worried about the fee reductions than the new deposit agreement changes. I prefer banks offer higher rates rather than perks like unlimited ATM fee refunds and free checks. I wonder if Ally Bank hopes these changes will allow them to compete with other banks that offer higher rates. It was reported in November that the FDIC is asking Ally Bank to keep its deposit rates under the nation's top 5 as measured by Bankrate. This is due to the capital assistance that GMAC is receiving from the government.
I've typed out the full list of account changes below.
CD Bonus for Renewals
If you have a CD maturing at Ally Bank, you may want to contact them and ask if they can offer a higher rate. You may be able to receive a loyalty bonus that could be 0.50% over their currently posted rates.
A reader emailed me that when he called to instruct Ally Bank to not renew his 12-month CD, they offered him this loyalty bonus with an additional 0.50% on the rate.
I haven't seen other banks offer this much of a renewal bonus. Since these are not posted rates, I bet the FDIC won't notice.
Rate Changes
Another nice CD feature that Ally Bank has recently added is the Ten Day Best Rate Guarantee. Here's how Ally describes this guarantee:
This feature is especially important now that Ally Bank is no longer limiting their rate changes for Fridays. Ally Bank used to only change rates on Friday. When they changed rates on the Wednesday before Thanksgiving, I thought this was just due to the holiday. However, they cut rates last Tuesday on their money market and savings account. So it looks like the rates may now be changed on any day.
No-Penalty CD Issue
The no-penalty CD used to be a great deal, but the rate has fallen. One issue that readers have reported about this no-penalty CD is that it's not easy to close. One reader commented on November 2nd:
I did confirm with an Ally CSR that a special department takes care of the closures. However, the CSR claimed to be able to send requests to that department. Here's what the CSR stated in a chat session:
And here's what the CSR said about the time it'll take to receive the funds:
So it appears things may have improved since the reader left his comments. Ally Bank has made improvements to closing the no-penalty CD. Previously, the ACH transfer to receive the funds was not an option. If you have recently closed this no-penalty CD, please leave a comment about how it went.
Excerpts of Ally Bank's Letter
On the downside, it added three clarifications to your Deposit Agreement which are a little worrisome. One states that "We reserve the right to suspend or close accounts for any reason, without prior notification."
I'm actually a little more worried about the fee reductions than the new deposit agreement changes. I prefer banks offer higher rates rather than perks like unlimited ATM fee refunds and free checks. I wonder if Ally Bank hopes these changes will allow them to compete with other banks that offer higher rates. It was reported in November that the FDIC is asking Ally Bank to keep its deposit rates under the nation's top 5 as measured by Bankrate. This is due to the capital assistance that GMAC is receiving from the government.
I've typed out the full list of account changes below.
CD Bonus for Renewals
If you have a CD maturing at Ally Bank, you may want to contact them and ask if they can offer a higher rate. You may be able to receive a loyalty bonus that could be 0.50% over their currently posted rates.
A reader emailed me that when he called to instruct Ally Bank to not renew his 12-month CD, they offered him this loyalty bonus with an additional 0.50% on the rate.
I haven't seen other banks offer this much of a renewal bonus. Since these are not posted rates, I bet the FDIC won't notice.
Rate Changes
Another nice CD feature that Ally Bank has recently added is the Ten Day Best Rate Guarantee. Here's how Ally describes this guarantee:
When you fund your CD within ten days of opening or renewing your Ally account, you automatically get the best rate we offer during that time period.
This feature is especially important now that Ally Bank is no longer limiting their rate changes for Fridays. Ally Bank used to only change rates on Friday. When they changed rates on the Wednesday before Thanksgiving, I thought this was just due to the holiday. However, they cut rates last Tuesday on their money market and savings account. So it looks like the rates may now be changed on any day.
No-Penalty CD Issue
The no-penalty CD used to be a great deal, but the rate has fallen. One issue that readers have reported about this no-penalty CD is that it's not easy to close. One reader commented on November 2nd:
Warning: Their process for closing a CD is slow and error-prone.
The highly-touted 24x365 phone center can't do the closure themselves - the agent requests the closure from another department (only open 9-5 on business days) that takes a couple of business days to actually initiate the outbound ACH transfer. (ACH transfers usually take two days to complete after they have been initiated - that is not the issue here.)
I did confirm with an Ally CSR that a special department takes care of the closures. However, the CSR claimed to be able to send requests to that department. Here's what the CSR stated in a chat session:
Only our Bank Operations Department actually carries out the request, however any advocate can submit the request to them for you.
And here's what the CSR said about the time it'll take to receive the funds:
The standard turn around time for an ACH transfer is 3-5 business days. The account will close and the funds will be sent out to your external bank immediately, but it could take 3-5 business days for the money to be fully available in your external bank.
So it appears things may have improved since the reader left his comments. Ally Bank has made improvements to closing the no-penalty CD. Previously, the ACH transfer to receive the funds was not an option. If you have recently closed this no-penalty CD, please leave a comment about how it went.
Excerpts of Ally Bank's Letter
The changes which are summarized below will be effective January 16, 2010:
1. We have reduced or eliminated the following charges:
a. You will no longer have to pay any ATM fees on your Ally account. Currently, we refund up to $6 in ATM charges per statement, but after January 16, we will refund all ATM fees.
b. When we advance money to you to cover your checks, debits and other transactions when your balance is not sufficient, the cost will be $9 maximum per day regardless of the number of times you overdraw your account each day. Plus, if your account is overdrawn by less than $15, you will not be charged.
c. If you use Ally standard personal checks, the order will be free. However, we do ask that you only order 200 checks at a time.
d. Official Check issuance fees are decreasing from $10 to $0.
e. Statement copies are now free and are available online.
f. The charge for outgoing international wires is decreasing from $45 to $20.
2. We have also added some clarifications to your Deposit Agreement:
a. For your protection and security, when making ACH transfers between your Ally account and accounts held at other financial institutions, you must be an owner of both accounts.
b. We reserve the right to suspend or close accounts for any reason, without prior notification.
c. Unfortunately, we cannot accept cash or foreign currency deposits, including foreign currency checks or wires.
FDIC sent letter to all of the banks in USA in which they outlined the bank policies concerning the customers. So, the banks are complying to that letter.
Concerning the fee charged, they are all within the guidance of FDIC requirements and price frame for all banks.
FDIC is working on a new fee schedule for services rendered and will send it to the banks in the beginning of 2010.
It looks like all banks will have to obey the new fee schedule from FDIC and make uniform price list, with few exceptions for the mega banks of course.
Ally rates have always been competitive, if not always in the top 3, so I'm hoping they can get out from under the FDIC yoke ASAP and get back to being more competitive.
This can be used for all or part of the matured CD.
For any new maturity terms, including the 9 month
no penalty.
I do not know if any new money from an Ally
account, can be added to this.
The frustrating part of the closure was the way in which their process is so error-prone...
Rather than fill out a form, the agent sends an email using a template. In my case, the agent's email gave instructions on what to do with the money upon maturity - instead of requesting an immediate closure. The agent knew that I wanted immediate closure - even asked me politely why I was taking the money out.
I called every day to check status. Every day an agent would say that the money would be sent the next day. Eventually one agent looked closely at the email and discovered the first agent's error.
A couple of days later, the unreachable special department finally initiated the ACH transfer.
I called Dec 10th, mine expires 12/27. They sent me a letter dated 11/27 reminding me. I had no intention of keeping the CD at their 1.89% rate or whatever. But with the .50% bonus, Im thinking about adding more to it as a poster above mentioned.
The rep said I can always change my mind up to 10 days after the new one starts.