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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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Ally Bank's CD Loyalty Rewards Program Changes for 2014

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Ally Bank will be changing its CD Loyalty Rewards Program. Effective January 18, 2014, the loyalty reward will be 0.15% instead of 0.25%. The program has been extended to 3/31/2014. I have confirmed this with Ally. Thanks to DA member cumulus for posting on this news in the forum.

For the last several years Ally Bank has been offering a loyalty rewards program to its CD customers when the CDs mature. This is intended to encourage customers to renew their CDs at Ally rather than moving the money to another bank. The current reward is a 0.25% rate bump. This means that Ally will add 0.25% to the posted interest rate of the CD. When the CD matures, Ally Bank allows customers to renew the CD into a different term. For example, you can change a 3-month CD into a 5-year CD. Also, Ally allows you to add money to the renewed CD.

In March I described my experience with Ally’s CD loyalty rewards program.

One important thing to note about this loyalty rewards program is that there's no guarantee that it will be offered to you. Ally has consistently extended the program, but there's no guarantee that it will continue. Ally can always choose not to offer it.

Ally Bank’s 5-year CDs

This loyalty rewards change and the recent change in the early withdrawal penalty will make Ally’s CDs less attractive. As I reported in October, Ally increased its early withdrawal penalties. These took effect on December 7th. The EWP for the 5-year CD is now 150 days of interest. This is still below average for EWPs on 5-year CDs, but it’s no longer the hot deal of only 60 days of interest. For example, if you opened an Ally 5-year CD today with a 1.60% APY and closed it early one year from now, the effective yield after the penalty would be 0.93%. When the EWP was only 60 days, the effective yield would have been 1.33%. You can see more examples of effective yields of CDs when closed early by using our CD Early Withdrawal Penalty calculator.

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.75*%$25k-Ally BankHigh Yield 5 Year CD
Accounts mentioned in this post. Rates as of May 25, 2016.

Ally Bank’s standard CD rates are currently well below its competitors. For example, EverBank is currently offering a 2.12% APY 5-year CD. That’s 52 bps higher than Ally Bank’s 1.60% APY. EverBank’s CD rate is even low when compared to PenFed’s 3.04% APY. Perhaps with these loyalty reward changes and the larger EWP, Ally will be more generous with its rates in the future.


Related Pages: Ally Bank, Salt Lake City, CD rates

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Comments
Robert
Robert (anonymous)   |     |   Comment #1
I'm not happey with Ally.  First the increase in EWP, now the rates effectively going down because of a smaller loyalty bonus.
Anonymous
Anonymous   |     |   Comment #2
I agree with the previous post (#1).  I pulled all of my liquid money out of Ally and switched to Barclays.  Have been very happy there.  I still have a 5 year CD with Ally, but do not plan to renew with them.
Anonymous
Anonymous   |     |   Comment #3
You're absolutely right.  I have over 100K in 4 five yr. cd's maturing in June 2015.  I expect the rate to be copetitively worse and the loyalty rewards to be so low as to be basically nonexistent.  I am looking for a better place for these funds now before they raise the early withdrawal penalty again.

I was hoping to invest in this company when they they became public.  At the rate that they are going, they will be worth diddlysquat with their IPO. 
Anonymous
Anonymous   |     |   Comment #4
Ally is trying to buy back the shares that the gov't owns, legal problems and now is having competition from GM Financial.  They aren't tax exempt like Penfed .
Shane
Shane (anonymous)   |     |   Comment #5
Ally is great - and the loyalty bonus was and remains unique to them.  I give them credit for coming up with it and keeping it for so long.
Robert
Robert (anonymous)   |     |   Comment #6
Starting July 1, 2014; the loyalty bonus is reduced to 0.05%.  I confirmed this via chat with an Ally associate.  They said this applies to all renewing CD's after July 1, 2014.  They said they review the loyalty percentage quarterly and they feel 0.05% is still competitive.  That may be true, but their base rates aren't as great as they used to be.
Robert
Robert (anonymous)   |     |   Comment #7
I've been tracking the Ally CD renewal loyalty bonus. I have a CD maturing October 1.  Ally's CD maturity letter offered 0.05% APY. It's my understanding that they reevaluate this bonus every three months (last time being July-September). So it's my understanding from the Oct 1 maturity letter that the October-December loyalty bonus will be 0.05% APY.  The bonus used to be 0.15% (Jan-June of 2014, I recollect) and 0.25% for several years before that.  Several years ago, the renewal was 0.50% APY
jb
jb (anonymous)   |     |   Comment #8
The Ally customer loyalty is .05%.