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Federal Reserve, the Economy and CD Rate Forecast - July 7, 2020Noteworthy Features of Ally’s Pandemic Relief Package
Ally Financial, the parent of Ally Bank, issued this press release yesterday announcing a relief package that’s intended to help people to deal with the coronavirus pandemic. The relief package is intended to support customers, auto dealers, communities and employees. Ally Bank customers may find the following support useful:
To aid customers in accessing their money as they need it, all fees related to expedited checks and debit cards, overdrafts, and excessive transactions on savings accounts will be waived for the next 120 days (as always, there are no monthly maintenance fees or balance minimums).
For savers, the waiver for the excessive transaction fee is noteworthy. Ally Bank normally charges $10 for each withdrawal (excluding some withdrawal types) from the Online Savings Account or Money Market Account that exceeds 6 per statement cycle. If you’re using your Ally Bank Online Savings Account to fund multiple CDs (either at Ally or at other institutions), you could easily reach this limit.
Ally Bank describes the details of this excessive withdrawal fee on its website. Below is an excerpt from Ally Bank’s Money Market Account page:
Federal law limits certain types of telephone, check and electronic transfers and withdrawals from money market accounts to 6 per statement cycle. These limited transactions include things like Point of Sale transactions, Online and Mobile Banking transfers, our Overdraft Transfer service, and transfers from your Money Market Account to another of your Ally bank accounts. If you go over this limit, we charge $10 for each of these transactions after the initial 6. If you exceed this limit on more than an occasional basis, we are required to close your Money Market Account. Some transactions are unlimited. You can make as many deposits as you'd like. You can make unlimited ATM withdrawals or call us anytime to request a check made out to you.
UPDATE 3/20/20: Due to concerns in the comments over the question of whether Ally could still close your account if you exceed the excess transaction limit during this period, I requested input from Ally. Below is the reply I received:
Because of COVID-19, we’re waiving the normal ‘excessive transaction’ fee if a customer has more than six withdrawals or transfers in a statement cycle. We know this is a difficult time for customers, and we’re committed to doing everything we can to help while maintaining compliance with federal regulations. For customers that transact frequently from their online savings or money market accounts, we recommend transitioning to a checking account, which offers unlimited transactions.
The other two fee waivers may be less useful for savers, but they could be useful to Ally Bank customers who are having financial difficulty. One is the fee waiver for overdrafts. Ally Bank charges an overdraft fee of $25. According to Ally Bank’s Straight Talk Product Guide, the fee is charged when you don’t have enough money in your checking account to cover a transaction. There is a maximum of one fee per day, and Ally won’t charge an additional fee even if you have a negative account balance over an extended period.
Ally Bank does offer a free overdraft transfer service which can be helpful to those who may accidentally overdraft. When you enable this service, Ally automatically transfers available funds from an Ally Online Savings 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 the excessive transaction fee for each transfer over the limit. With this temporary fee waiver, this fee will be one less thing to worry about. As I described in this blog post about how to use this overdraft transfers to maximize interest, the excessive transaction fee is an issue that complicates overdraft transfers and may force you to keep more money in the checking account which will earn little interest. With the temporary fee waiver, you’ll be able to keep more money in the Online Savings Account where it will earn more interest.
Ally Bank Cash Bonus Reminder
Don’t forget Ally Bank’s Cash Back Promotion. To qualify for the bonus, you have to sign up by 3/20/20 (which is this Friday). This promotion can be easy money, especially if you were already planning to move money into Ally Bank. Please see my review of this Ally cash back promotion for the details.
I assume the same also still applies to their online savings account as it normally does.
So they waive the fee for making more than 6 withdrawals. But they can still close your account. How much help is that?
"Suspended fees at Ally Bank. For the next 120 days, we're waiving fees for overdrafts, excessive transactions for savings and money market accounts, and expedited shipping of checks and debit cards. As always, there are no monthly maintenance fees or balance minimums to bank with us. If you have questions, contact us at 1-877-247-2559. We're here 24/7."
(emphasis added)
If Ally customers have questions as to whether Ally would close an account for exceeding a certain number of transactions, I suggest they follow the instructions in Ally's e-mail.
Predatory Depositor's query is "How much help is that?"
Following Ally's instructions in its e-mail might be of some help in answering that query. (That could depend on Ally's informing its representatives about this.) But I believe that an Ally customer who is concerned about this issue should read and follow the instructions in the e-mail before speculating about it here.
I cannot help but wonder if this has something to do with Ally having a much larger than normal percent of its assets in car loans. People default on car payments first, and perhaps the bank doesn't have the funds to continue normal banking operations. If I can figure out a way to get my money out of Ally before it goes belly up, I am going to do it, but they've blocked every exit door.
https://www.mybanktracker.com/checking/faq/zelle-pay-limits-274406
You did not say 10 transfers sailed through, you said A transfer. Your original statement struck me as false, perhaps with clarification it was just incomplete.
With no other users reporting any difficulty, it still seems more likely to me that there are unique circumstances surrounding you that have lead to your accounts locking rather than the liquidity that you seem convinced of.
I will be finding out for myself early next week when my monthly transfer from Ally to PSECU for my add-ons is scheduled to take place. I do have a backup setup where I can fund PSECU from one of my RCAs, but I sure hope that isn't necessary.
If/when you get an Ally rep on the phone, you might ask about whether the "discrepant" activity is related to those earlier high-dollar Zelle successes. I could imagine an auditor coming along and wondering just how those went through, and perhaps suspecting you of something rather than a system error on their side.
Zelle, good luck!
The government is planning to spend hundreds of billions on bonus welfare checks, guaranteeing greedy airline executive bonuses, and guaranteeing money market funds that they swore they would not do again after 2008.
The first banks and credit unions to fail will be insured and covered immediately, to prevent a run on banks.
The constant bailouts are not good long term, but people buy FDIC and NCUA insured products for a fair reason.
Why would anyone take vague warnings seriously?
If they genuinely won't let you transfer money out and won't explain.
Never heard of Zelle, and doesn't worry me about liquidity at all.
If you think about it, not too many people buying cars this month.