Ally’s New Online Banking Helps with CD Management and Wire Transfers

Ally Bank announced yesterday new online banking features that help customers manage their CDs and request wire transfers. In addition, Ally added several online bill pay features, extended the length of time to view statements and tax forms online to seven years and made improvements in the online account application process. An overview of the enhancements is listed in Ally Bank’s press release.

Online CD Management

I gave Ally’s online CD management a test today. After you log into your account, select "Manage CDs" in the main menu to get to the CD management page. You’ll see three main options: renewal, interest disbursement and early withdrawal.

The renewal options allow you to select what happens to your CD when it matures. What I like best about this option is that you can select to have the CD closed at maturity with either a check sent to you or the CD funds transferred to another account. I consider this an important feature since it’s easy to forget the maturity date of a CD. If you miss the grace period, you then can’t get access to the CD without an early withdrawal penalty.

One downside with the renewal option is that it doesn’t allow customers to change renewal options until one year before maturity. It does allow you to set up an alert to notify you by email when renewal options become available online.

Unlike the renewal option, interest disbursement option is always available to CD customers. You’re given the choice of interest being paid monthly, quarterly, semi-annually or annually (at the end of the year). You can choose to have interest paid back into the CD, transferred to one of your accounts or sent by check.

The early withdrawal option wasn’t mentioned in the press release. As the name suggests, the option allows you to close any of your CDs early (with an early withdrawal penalty). For a selected CD, it lists the amount of early withdrawal penalty. I checked the amount with the two CDs that I have, and the amounts were correct. My CDs were opened before Ally increased the early withdrawal penalties, and the old penalties are still in effect for my CDs. For CDs opened or renewed after the change, the new penalties will be in effect. The early withdrawal option allows you to choose to have a check mailed to you or to have the funds transferred to one of your accounts. Note, Ally does not allow partial early closure which means you can’t request an early withdrawal of only some of the principal.

Online Wire Transfer Requests

Another new online banking feature that many savers may use is requesting wire transfers. You no longer have to access a fax machine to initiate a wire transfer. To access this option, select "Transfer Funds" in the main menu. That will take you to the Transfer Funds page. Wire transfers is the last option on this page. When you select "Wire Transfers", the page describes two ways to wire money from your Ally account. The old way of printing out and faxing the wire transfer form is still available. The new online way can be done by selecting the link "wire transfer request". This brings up the wire transfer form. When you select the source account, it will allow you to enter the amount, the date of the transfer and the destination information. Note, Ally doesn’t allow international wire transfers. Also, there’s a $20 fee for outgoing wire transfers.

My Take

I’m happy to see these changes at Ally Bank. According to the press release "Ally Bank is one of the first banks to provide extensive CD self-service functionality and visibility into renewal instructions." I haven’t seen many internet banks that have this service. The one exception is Capital One 360 (formerly ING Direct) which has long had the online CD management capability. In my opinion, online CD management has several advantages over managing a CD by contacting a CSR. For example, I have seen a case at a different internet bank when a CSR wrongly assumed a request to close a CD at maturity was a request to close the CD immediately with an early withdrawal penalty. Being able to visually review CD management options and selections online will reduce mistakes and unpleasant surprises.