Double Check Your Ally Bank CD Interest
Update 2/21/2012: The WSJ has reported on this issue. According to the article "Ally is in the process of crediting the proper interest payments to customer accounts and is "communicating with" customers".
If you have Ally Bank CDs, you might want to double check the interest that Ally credited to your account for 2011. A reader informed me that Ally had not paid interest in 2011 to one of his 5-year CDs. After several calls and over a month, Ally finally fixed the problem with his CD and credited the proper interest. Below is an excerpt of his first email to me about this issue:
They have not paid interest in 2011 to one of my 5-year CD accounts. I contacted them more than 3 weeks ago regarding the issue, and it has not yet been resolved. They could not give me an exact answer about the reason for this, and I don't see any results after contacting them several times.
I had tried to help by emailing my Ally contact to spur action, but it's not clear if that had helped. The reader just notified me that Ally finally fixed the issue:
Finally Ally credited my CD with last year's interest, which posted yesterday, and apparently it will be counted towards 2011 interest payments in the amended 1099-INT form that they will send me by the end of February.
I talked to someone in the executive resolution center. I was told that a lot of customers are having this issue due to "some" system error. Surprisingly, instead of finding the source of the error and solving it for all the accounts involved, they are dealing with this on a case by case basis, correcting the interest on the accounts for which they receive customer complaints. This is very worrisome, as I don't know what would have happened if I didn't catch the error. They "hope" that the error will be solved during the year so that this does not happen again, but of course, they could not assure this. They did offer to close the CD and open a new one replicating the terms hoping that the issue will not arise in the new CD.
To be honest, I am very disappointed with Ally. Who knows what other system issues they might have. I will take a closer look at all my accounts regularly from now on.
Ally customers who are not careful to review their accounts may miss this error, and it appears Ally may not fix the error unless there's a complaint. I doubled checked the interest credited on my Ally CDs, and all of the CDs were properly credited. This is probably a good practice for any of your bank accounts. It doesn't hurt to double check how the bank or credit union credits the interest. I'm surprised a bank could make such a mistake, but I suppose with any software, there's always the possibility of a bug.
Hat tip to the reader for sharing his experiences and getting the word out on this issue. If you had a good or bad experience at your bank or credit union, please consider sharing your experience using our bank review service.
The only CD interest I have on my 2011 Ally 1099-INT is from an Ally CD that matured. The other Ally CD doesn't have any interest, and it had no interest income on the 2011 1099-INT.
Also, I remember opening a CD last year and for about a week the interest decreased a basis pt a day. Each day I checked it the interest rate displayed with my CD was following this decrease. I finally called and they could barely explain themselves, however it did revert to the correct rate after 10 days. The CSR said it had something to do with the 10 day rate guarantee. Still strange to see it bounce around.
"Turns out some CDs post interest on the anniversary date vs end of year. Depending on the term and date it was opened."
Last year they had to re-send 1099 for over paid interest. Very confusing and messed up "2010" IRS filing. It not a new problem
I caught their error, more through luck than anything else, and telephoned again. Second time they were successful in making the change properly to all but one of my accounts (all my CD accounts are similar with like term). How they got all but one right is beyond me. I would chalk it up to carelessness . . . to perhaps a keying error and failure to check work . . . that's what it looked like. I had to telephone them a third time after discovering their second error. Then I telephoned them a fourth time to be certain it had been put right. It had. Finally!
Anyway, when it comes to Ally Bank my best advice is to: Watch 'em like a hawk!! Precision, accuracy, and attention to detail are not strong suits at Ally Bank. I'm there only because of the 60-day penalty. If that went away I'd be gone fast enough to make your head spin.
Eventually, you may be able to work your way up to 'executive' problem resolution level to get anything at all done.
When I close my long term CDs in the future, I will NEVER be back to ALLy regardless of their interest rates.
Not compounding the interest?
So much for the ad campaign extolling their honesty.
“The louder he talked of his honour, the faster we counted the spoons.” --Emerson
12/01/2010 for From Date and
02/10/2012 for To Date.
If you enter a date like 2/02/2012 or 02/2/2012 or 02/02/12 their lame software says "not a valid date."
Must be mm/dd/yyyy
If your From Date is more than 18 months ago, you get "You have attempted to query for details older than the 18 month limit. "
FWIW, mine are OK.
#14, Not to worry. Interest on all Ally CDs are compounded daily. That's what matters. Whether posted monthly, yearly or at maturity the APY (and total earnings) will be the same. I also use a speadsheet to verify their monthly calculations and the numbers are accurate to the penny. As for 1099 INT reporting, accrued interest is normally posted (and credited for IRS purposes) on 12/31 for any term greater than 18 months, otherwise on the anniversary or at maturity. That's how it was explained several years ago when questioning why 12 and 18 month CDs didn't report interest EOY. I haven't opened anything less than 36 months lately to confirm this is current practice.
It appears Ally Bank has been corrupt from day one. Just read the reviews on this website.
It's time we all took the situation seriously ... began making all contact with Ally by "Certified Mail" (you can get a free receipt from the USPS website documenting that the mail was received) ... and began filing complaints with government agencies. We shouldn't have to contact Ally more than once to straighten out one of their famous "computer errors" ... a copy of the second written request should also go to a string of government agencies.
Ken has an article on how to file a complaint against your bank:
But for maximum impact, I would also send a copy of the complaint to the White House, my senators and congressman, and to the chairmen and members of the Senate and House banking committees ... and maybe the FDIC, who will have to clean up the mess if Ally (GMAC) defaults ... again.
Ally "Bank", if that's what it is, clearly has "stuff goin' on". And it's not good stuff. Real banks don't operate like this; at least well-run ones don't.
Check on account details for accrued interest rather than posted interest. It states, "Interest Accrued is the daily interest accumulated from the date of your last interest payment up to today. We pay the interest that has accumulated either monthly, quarterly or annually depending on the payment schedule you selected when you opened your CD"
When is interest posted, and how do I receive it?
Interest is typically posted on the maturity date. It can, however, also be posted monthly, quarterly, semi-annually, or annually. You can request to receive it in one of three ways:
· By official check
· By internal transfer to another Ally Bank account
· By external transfer to a registered non-Ally bank account
Nobody is being ripped off.