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How Ally Checking Account Customers Can Maximize Interest


For the two Ally Bank accounts that offer checks, interest rates have a history of being low, and the rates have fallen even more. Last Friday, Ally Bank lowered the rates on its Interest Checking Account and Money Market Account. There was no rate change on the Online Savings Account.

4.20%--Ally BankMoney Market Account
4.20%--Ally BankSavings Account
0.25*%$15k-Ally BankSpending Account
OTHER TIERS: 0.10% Up to $15k
Rates as of April 19, 2024.

I’m disappointed in these rate cuts for two reasons. First, these rates were already low, and now these rates have fallen to new lows. Second, it appears Ally Bank did not send an email to customers about these rate cuts as it did when it cut its Online Savings Account APY from 1.90% to 1.80% on October 11th. If you received a notification about these cuts, please let me know in the comments. Ally is not required to notify customers on rate changes, but it’s something to be expected from a bank with a “Do It Right” brand campaign.

The top tier rate of the Interest Checking Account fell from 0.60% to 0.50%. The bottom tier rate remains the same (0.10% for balances under $15k).This is the first time Ally Bank has cut the rate of the Interest Checking Account since 2014. Also, this top tier rate of 0.50% is the lowest rate ever on the Interest Checking Account since it was introduced in 2010.

The Money Market Account rate fell from 1.00% to 0.75%. This is the first rate cut since 2013, and this current rate of 0.75% is the lowest rate ever on the Ally Money Market Account since 2009 when DA began tracking this account. For most of the period when the Fed kept rates near zero, the Money Market rate was 0.85%.

UPDATE 5:25pm 11/12/19: Ally just sent emails to customers notifying them of an Online Savings Account rate cut that will be effective on 11/13/19. Here's an excerpt of that email:

Starting 11/13/2019, the Annual Percentage Yield (APY) on your Online Savings Account is changing from 1.80% APY to 1.70% APY. It will show online in your account details on 11/14/2019.

Maximizing Interest with Your Ally Checking Account

Benefits of Ally Interest Checking or Money Market Accounts

If you have an Ally Online Savings Account, it does make sense to also have an Ally Money Market Account and/or an Ally Interest Checking Account. Unlike the Online Savings Account, these accounts offer check writing which can be useful even if you have your primary checking account at another institution. The Money Market Account is limited to six checks per statement period (as required by federal regulation). The Interest Checking Account has no limit on the number of checks. Both accounts are free with no minimum balance requirement and no monthly service fee. Also, there's no charge when you order standard Ally Bank checks for either account.

Using Ally Interest Checking as Your Primary Checking Account

There are several reasons to consider using the Ally Interest Checking Account as your primary checking account. However, as I described above, the interest rate is low, even if you maintain a $15k balance. Thus, to maximize interest on your cash, it makes sense to keep most of your cash in the Online Savings Account instead of the Interest Checking Account. The problem with this strategy is that you may experience overdrafts on your checking account if you’re not careful. Ally charges a $25 overdraft fee. If it’s your check that bounced, the person depositing your check won’t be happy when they get hit with a Return Deposited fee. Ally charges $7.50 for each return check. Many banks charge more than this.

Ally's Overdraft Transfer Service

Ally Bank offers a useful service to help you prevent overdrafts on your Ally Interest Checking Account. It’s their free Overdraft Transfer Service. When you enable this service, Ally automatically transfers available funds from an account you choose in $100 increments when your checking account comes up short. The only potential gotcha is that if there are too many overdraft transfers, you could be charged a $10 excessive transaction fee for each transfer over the limit (6 per statement period).

Multiple Online Savings Accounts

To reduce the chance of an excessive transaction fee, you can open another Online Savings Account that’s dedicated as an overdraft transfer account for your checking. That has two benefits. First, you can continue to use your primary savings account without concern about your checking account. Each savings account has its own limit of six withdrawals per statement period. The other benefit is that you can keep most of your savings in your primary savings account. Only keep enough in the overdraft savings account to ensure all checking account debits will be covered. If there is a fraudulent debit from the checking account that triggers the overdraft transfer service, it won’t touch your primary savings account. Of course, if you report the fraudulent debit to Ally within 60 days from when your statement is made available, you won’t be liable for the debit.

The Overdraft Transfer Strategy

By using the Ally’s Overdraft Transfer Service and by keeping most of your money in your Ally Online Savings Account, you will be able to earn much more interest on your money, especially after the recent rate cut. The Online Savings Account’s interest rate is currently more than 3x the top tier rate of the Interest Checking Account. If you don’t keep $15k in the checking, the Online Savings Account interest rate is currently 18x higher.

The other option if you frequently write checks is to write checks from your Ally Money Market Account. However, the Online Savings Account rate is also much higher than the Money Market rate (currently 2.4x higher). Ally doesn’t offer Overdraft Transfer Service for the Money Market Account. So you may be able to earn more interest by just using the Interest Checking Account with this Overdraft Transfer strategy.

Related Pages: savings accounts, money market accounts, checking accounts, nationwide deals, Internet banks
  |     |   Comment #1
No matter what strategy you sudgested to use to maximize the savings, it is a losing proposition. How about paying most of your bills with CC and pay the CC with just one transfer a month into the checking and immediately pay the CC. I think this is the better alternative.
deplorable 1
  |     |   Comment #2
This is exactly why I use the Ally demand note account as a checking account instead.
1. Higher interest
2. No 6 withdrawal per month limit to worry about
3. No overdraft protection needed as you will want to at least maintain the $15.000 tier anyway.
Then as Mikka suggests pay all your bills with a 2-5% cash back card and schedule that payment to come out of the demand note account on the payment due date from the credit card's website.
This is how to maximize interest while having the flexibility to pay bills.
  |     |   Comment #3
It doesn't look like this is generally available:
"Demands Notes are available to all employees and retirees of Ally Financial, as well as their immediate family members (spouse, children, parents, siblings and grandparents of the employee or retiree). Eligibility also extends to associated Ally Financial dealers and their employees."
deplorable 1
  |     |   Comment #7
Sorry they must have changed their terms. I have had this account for so long since it was GMAC demand notes. It was available publicly at one time. Strange because GM right notes is available to the general public but you can't pay bills with that account. Hopefully they will add that option soon. 2.5% on a bill pay account would be great.
Yeah I know not FDIC insured but it's not like I'm keeping $250,000 in there this is just bill pay cash plus a bit extra to maintain a tier level.
  |     |   Comment #23
I don't believe that GM Right Notes are available to the general public. Last week I reviewed the website and, seeing nothing to indicate restrictions, I proceeded to fill out an application. To my surprise one of the early questions related to GM affiliation and a drop down menu was presented with a number of choices, the most general of which was "GM Customer"...Of course, I don't know what they are going to do verify that selection. However, I called the information number and indicated I had encountered this drop down menu and the asked, 'isn't your note program open to the general public?'. The response was "no, it isn't, you have to have an affiliation with GM.'
Reader 1
  |     |   Comment #4
From Ally's website:

"Demand Notes are unsecured debt obligations of Ally Financial offered in the U.S. by prospectus only."

"Demand Notes:

- Are not FDIC insured
- Are not bank guaranteed
- Are not deposits
- May lose value"


"Demand Notes are available to all employees and retirees of Ally Financial, as well as their immediate family members (spouse, children, parents, siblings and grandparents of the employee or retiree). They are also available to auto dealers with a retail or wholesale financing relationship with Ally Financial and their employees. Corporate entities who complete a Demand Notes Investment Form will need to provide information on its Beneficial Owners."
Predatory Depositor
  |     |   Comment #19
Most of my recurring bills, such as utilities, don't allow payment by credit card. So that's not an option.
Predatory Depositor
  |     |   Comment #5
I have both Ally interest checking and online savings accounts.

I can confirm that I DID also receive a notice about the rate change from 1.90% to 1.80% from Ally last month. The change was effective on 10/10/2019 and I received the email on 10/9/2019.

I can also confirm that I DID NOT receive an email about any rate changes made last Friday. So if it was to follow the same convention as last time I would have been notified before the change was effective.

However, some FIs notify about rate changes AFTER the changes are in place. I think I recall some sending emails as much as a week or two later. So it's possible notification might still come.

However, I agree with your general sentiment. An FI gets points for notifying of rate changes promptly. It has a bearing on my decision as to which FIs I want to do business with.

And it's particularly of concern when an FI previously sent notification but then fails to do so. Makes it seem sneaky. I am concerned about Ally and their desire to remain rate competitive. My guess is that they are flush with cash and don't need to attract funds at this time. A few years ago they bombarded media with ads. I have not noticed much of that in recent times. Probably got a massive number of depositors and spent a fortune on media and are still working all that off.

Eventually I suspect with the lack of promotion and low rates, they may have to raise rates again to stem the loss of customers. Just a theory. We'll see. But in the meantime, they have disappointing rates.
Predatory Depositor
  |     |   Comment #28
PS Ally now cut their savings rate to 1.70%.

So far I received no email about any rate cuts since mid-October even though there have been a few.
Predatory Depositor
  |     |   Comment #6
It should also be mentioned that you are only able to link one online savings account to a checking account. So you cannot increase the number of overdrafts covered on a checking account by adding more linked savings accounts.

However, I have never looked into whether you can have more than one checking account linked to more than one savings account in order to increase the number of overdrafts you can have covered each month without incurring excess withdrawal fees in the savings account. So there's a potential lead for all you predators out there. ;)
The Spender
  |     |   Comment #8
In my old retired age, I need things to be as simple as possible. (Don't worry, you'll be there too someday). I'm not concerned with earning interest in a checking account. I only keep a very small balance there. Hardly ever write a check. I pay all utilities and insurance by phone with my 2% rewards card.
  |     |   Comment #10
We have multiple Ally accounts, but no notice regarding any of our checking accounts.
Just received this email moments ago from Ally:

From: "Ally Bank"
Date: Tue, November 12, 2019 14:02
Subject: Why your savings rate is changing

An update about your Online Savings Account.
{Name}, as you may have heard, the Federal Reserve cut the fed funds
rate for the third time since July. Unfortunately, like many other
online banks, these rate cuts will impact the rate on your Online
Savings Account.

Starting 11/13/2019, the Annual Percentage Yield (APY) on your
Online Savings Account is changing from 1.80% APY to 1.70% APY. It
will show online in your account details on 11/14/2019.

What this means in dollars and cents.

This 0.10% APY decrease means you’ll earn at least $5 less in
interest a year for every $5,000 in your account. Interest earnings
are always nice to have, but your savings strategy shouldn’t rely
on that alone.

Here are 3 ways to set yourself up for savings success:
1. Schedule recurring transfers

Add to your savings on a regular basis by setting up automatic
transfers from your checking account.

2. Set up direct deposit

Deposit a portion of your paycheck directly into your Online
Savings Account each pay period. You’ll be surprised at how little
you miss that money.

3. Put some of your savings in a CD

Even if your savings rate drops further, your CD rate won’t change
until it matures.

Compare CDs

Learn more savings strategies

Good news is on its way.

We’re close to launching new tools that will help you save more
than our best rate ever could. Stay tuned.

You're receiving this account servicing email as a valued Ally Bank

Please do not reply to this email.

Concerned you've received a suspicious email that appears to be
from Ally Bank? Call us at
1-877-247-2559 and we'll investigate.

Ally Bank Customer Care Department, P.O. Box 951, Horsham, PA 19044

(c)2009 – 2019 Ally Financial Inc. Ally and Ally Bank are
registered service marks.
  |     |   Comment #11
I do have 2 savings account at Ally. I didn't realize until I read this that this would allow double the amount of transfers from savings to checking from 6 to 12 per statement period. Do I have this correct?
Predatory Depositor
  |     |   Comment #13
Predatory Depositor
  |     |   Comment #17
Don't forget that other kinds of withdrawals from each savings account -- such as transfers to an external account, or automatic withdrawals from the account -- also reduce the number of remaining withdrawals from that account each month as well.
Predatory Depositor
  |     |   Comment #18
I think another important way to maximize your interest not mentioned is to have your autopays come out of your savings account instead of your checking account. That way you don't have to worry about constantly transferring money to checking and have it sit there at a lower interest rate. You don't even need overdraft protection for that. Your funds are always earning the higher rate until they are needed.

Need more than 6 automatic withdrawals per month? Just open another savings account until you have enough accounts to cover them all with no excess withdrawals.
  |     |   Comment #21
There is at least one better choice out there.

Like Ally Bank, Discover Bank also offers Online Savings Account (1.80% APY) and Money Market Account (1.65% APY for for balances under $100,000 and 1.70% for balances $100,000 and over) with ATM, debit and checks.

Besides earning at least 0.90% APY (as of 11/12/19) more from Discover's Money Market Account than Ally, Discover charges $0 fee for:

    - Insufficient funds

    - Excessive withdrawal fee ("If you go over these limitations on more than an occasional basis, your account may be closed. See Section 11 of the Deposit Account Agreement for more details.")

    - Deposited item returned

  |     |   Comment #39
Yes, Discover has become a much better option in many ways, but I would like to see them start offering next day ACH transfers and make some improvements to their CD accounts(Online account management and lower the excessive EWP's).
  |     |   Comment #27
I did get an email from Ally yesterday (Nov. 11) about the rate drop to 1.70% including an explanation (Federal Reserve 3 cuts in a row since July).
Predatory Depositor
  |     |   Comment #29
I think they're trying to sell that excuse to the wrong crowd on this site. Ally cut earlier and deeper than just about anybody else in the game. It's going to come back to bite them.
  |     |   Comment #30
It's not an excuse. It's the same reason all the FIs have been lowing their savings and CD rates. Of course, you already know that.
Go Navy
  |     |   Comment #32
PENFED still holds the record for cutting earlier and deeper than anybody else, IMO.
Call them "fast & furious" and you'll never get an email notice.
  |     |   Comment #31
In Ally’s defense me and my partner both received emails notifying us of the rate cut
The Spender
  |     |   Comment #33
Me and my 4 ex-wives never received any notice of a rate cut. No big deal, the sun will still rise tomorrow. :)

And at a measly 1.70%, why even save it! When rates get that low, spending is the name of the game. Have some fun.
  |     |   Comment #34
Sheesh - 4? Tipping my hat. Still working on my third...
  |     |   Comment #35
Yes I received emails about rate cuts from 1.90 to 1.80 and then another one from 1.80 to 1.70.
Ally suggested to offset the cuts 1. Schedule recurring transfers 2. Set up direct Deposit 3. Put some of your savings into a CD They explained you would only lose 5.00 a year on a 5K balance
Break the Addiction
  |     |   Comment #36
I respectfully suggest that some folks are very very dedicated to one particular bank or cu, even if rates decline down to a yield of 0.80%.

Probably 90 percent of people are very busy, don't hang out on DA every day, don't have the savings, and don't go chasing rates and moving money all over the country.

To each his own I guess, and not for us to judge. Count your blessings.
Laura Lez
  |     |   Comment #37
Thank you Patriot for your Powerful Testimony. Sobering perspective.
Don't laugh.....
  |     |   Comment #38
You better get some NPCDs at Purepoint. At least you're guaranteed 1.90% for the next 13 months.
What will you do with all that interest??? LOL!
Large Pepperoni Please
  |     |   Comment #40
And MySavingsDirect.com is 2%. Put 50k in there and you'll get about 80 bucks a month interest.
Now days that is big money! It will pay for my football Sunday pizzas and all my Starbucks runs. Can't complain.

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