Ally Bank No Penalty CD

[sophie]

It's a CD...no, it's a savings account...or is it a floor wax!

https://www.ally.com/bank/no-penalty-cd/

Cliff Notes version: For a minimum balance of $25,000, you can now open a new savings-ish account with Ally yielding 1.50%. It is technically an 11 month CD with autorollover and with no early withdrawal fees. Your money is locked into the account for 6 days.

It looks like the only difference between that and a regular savings account with Ally is that you can't tie it to the checking account for overdraft transfers. For comparison, the one year T bill is 1.22%.

Looks interesting, but I wonder why they didn't just introduce tiered interest rates into their savings accounts. Why the added complexity? This has also left me wondering if I shouldn't just go the T bill route, which has only a slightly lower interest rate after tax.

EDIT: I found some info that in order to withdraw money you have to close the CD and wait two days for the money to transfer out. No partial withdrawals. So it's more like selling a CD or T bill than a savings account....

[farjean2]

These low interest rates have been going on for so long now that I'm beginning to question my memories about the past. Seems to me that when I opened my Fidelity online checking account when they first offered it, they were offering around 5% on a checking account balance of something like 5-10k? Or maybe even no required minimum balance at all if memory serves me right.

Can anybody help me about whether I'm dealing with false memories of the good old days or not?

[ochotona]

In 1983 I got a 12-month CD offering about 13% APR, at an S&L in the Sherman Oaks (California) Galleria where they filmed "Terminator 2". Imperial Savings and Loan. Long since gone, of course. Oh, the good old days.

[eufo]

In 1983 I got a 12-month CD offering about 13% APR, at an S&L in the Sherman Oaks (California) Galleria where they filmed "Terminator 2". Imperial Savings and Loan. Long since gone, of course. Oh, the good old days.

Hasta la vista, baby!

Wow, 13%! *heavy sigh*

[buddtholomew]

In 1983 I got a 12-month CD offering about 13% APR, at an S&L in the Sherman Oaks (California) Galleria where they filmed "Terminator 2". Imperial Savings and Loan. Long since gone, of course. Oh, the good old days.

shut up
Grew up in the San Fernando Valley on Louise (south side of Ventura Blvd) and attended UCLA.
Sherman Oaks Galleria was the shiznit back in the day.

[ochotona]

All banks pass this year's stress tests, BUT...

Among a couple of close calls, Morgan Stanley's (NYSE:MS) supplementary leverage ratio fell to as low as 3.8% under the severely adverse scenario - not too far from the 3% minimum. Ally Financial's (NYSE:ALLY) CET 1 ratio fell to as low as 6.5% vs. the 4.5% minimum.


https://seekingalpha.com/news/3275165-b ... ress-tests

Ally used to be GMAC, and is heavily auto loan dependent... need I say more. I watch it like a hawk, but I have lots of money there, but all under the FDIC limit.

[Cortopassi]

These low interest rates have been going on for so long now that I'm beginning to question my memories about the past. Seems to me that when I opened my Fidelity online checking account when they first offered it, they were offering around 5% on a checking account balance of something like 5-10k? Or maybe even no required minimum balance at all if memory serves me right.

Can anybody help me about whether I'm dealing with false memories of the good old days or not?

Absolutely back in the ~2000 years. I would do the 0% for 12 months cash advance on a new/existing credit card, take the cash and put it in a money market. Did it 3 times. Easy, free $1000 every time for a 20k advance.

[ochotona]

Ally just raised it's online savings rate to 1.15%.

[jhogue]

1 year Treasury: 1.27% 6/30/2017 Fidelity min. $1,000
1 year CD: 1.40% 6/30/2017 synchrony min. $2,000
Current I-bond rate: 1.96% 5/01/2017 Treasury Direct min. $ 25
Previous I-bond rate: 2.76% 5/01/2017 Treasury Direct min. $ 25

Happy 4th of July to everyone!

[ppnewbie]

It's a CD...no, it's a savings account...or is it a floor wax!

https://www.ally.com/bank/no-penalty-cd/

Cliff Notes version: For a minimum balance of $25,000, you can now open a new savings-ish account with Ally yielding 1.50%. It is technically an 11 month CD with autorollover and with no early withdrawal fees. Your money is locked into the account for 6 days.

It looks like the only difference between that and a regular savings account with Ally is that you can't tie it to the checking account for overdraft transfers. For comparison, the one year T bill is 1.22%.

Looks interesting, but I wonder why they didn't just introduce tiered interest rates into their savings accounts. Why the added complexity? This has also left me wondering if I shouldn't just go the T bill route, which has only a slightly lower interest rate after tax.

EDIT: I found some info that in order to withdraw money you have to close the CD and wait two days for the money to transfer out. No partial withdrawals. So it's more like selling a CD or T bill than a savings account....

Anyone looked at www.marcus.com - It's Goldman Sach's new attempt to provide banking services for the rest of us. Savings account is 2.25%, CD's are 2.7%. There is definitely major counter party risk with an online account and Goldman playing with your money. But if your comfortable with that, it's a pretty impressive offer. Personally, I have not made up my mind if I am willing to take the risk.

[jhogue]

A 1 year T-bill at Fidelity brokerage was 2.34% today. A 6 month T bill was 2.39%. Minimum purchase of $1,000. T-bills are also free of state and local taxes. CDs are not.

[ppnewbie]

Goldman Sachs - marcus.com 2.25% savings ($1,000 minimum), 2.35% penalty free CD, 2.7% 1 year CD.

[jhogue]

One thing is certain: Goldman Sachs will be "playing with your money."

That is who they are. That is what they do.

[jhogue]

See Craig Rowland's comments in Cash FAQ:

"Q: Why a Treasury Money Market Fund and not something else with better yield?

A: Because you are not looking to take risk with your cash. Treasury Money Market Funds that are properly run are one of the most liquid investments you can own. There are no FDIC limits to worry about, no bank credit worthiness to worry about, and you will always be paid barring some extremely catastrophic event in the country. Chasing yield with your cash means you are taking on more risk and those risks can show up when you least expect (or want) them to. "

[ochotona]

Ally CD rates are declining now...

[dualstow]

Ally CD rates are declining now...

It won’t last, but Vanguard’s treasury money market (fund #11) is still paying over 2.3%.

[ochotona]

Ally "buckets" sound useful

https://www.ally.com/go/bank/savingstoo ... L400001540

[dualstow]

Ally "buckets" sound useful

https://www.ally.com/go/bank/savingstoo ... L400001540

Cool. Seems like a fun way to allocate the right amount for bills and emergencies and see what’s left.

[ochotona]

Ally online savings down to 1.60% now...

[dualstow]

Ally online savings down to 1.60% now...

One point higher than VUSXX/ Vanguard treasury money mkt

[dualstow]

Original post in the thread, 2017

It's a CD...no, it's a savings account...or is it a floor wax!

https://www.ally.com/bank/no-penalty-cd/

Cliff Notes version: For a minimum balance of $25,000, you can now open a new savings-ish account with Ally yielding 1.50%. It is technically an 11 month CD with autorollover and with no early withdrawal fees. Your money is locked into the account for 6 days.
...

(2nd post is ochotona's memory of a 13% CD which made me weep)

If you're willing to lock up your money for a year, you can get a 2% CD rate (source: bankrate dot com).
Is anyone doing that?
I haven't. I have treasuries, some of it laddered. but I'm curious.

[sophie]

Nah. I got out of Ally and now use Fidelity for online banking instead. My "savings account" is FDLXX, and my "checking" is actually the same account's core fund which is either SPAXX or FZFXX depending on what mood I'm in. A much simpler way to accomplish the same thing.

[dualstow]

I do wonder if anyone's chasing that 2% while it lasts, though. I know someone -- not a pp'er -- who is buying 5-year-CDs in anticipation of years of low rates.

[drumminj]

I do wonder if anyone's chasing that 2% while it lasts, though.

I did lock in some 3% 5-year CDs around a year ago with "deep cash" with this in mind. Even broke some CDs and re-purchased at higher rate when things hit 3%.

We've discussed relative risks of CDs vs treasuries elsewhere so hope to avoid getting back into that here, but given the way things have gone it's worked out in my favor.

[sophie]

You could buy a CD through Fidelity to lock in those rates. Not a bad thought! I'm thinking I'd rather keep my cash liquid though, for "dry powder". That's because so much of mine is locked up in savings bonds.