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Ally Bank CD loyalty bonus
07-22-2015, 03:43 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Southern California
Posts: 3,999
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Ally Bank CD loyalty bonus
I had a five year CD at Ally Bank which matured this week. Since their new rates are not as competitive as other banks, I called them to instruct them not to renew my CD. The woman on the phone informed me that I'm entitled to a "loyalty bonus" if I agree to renew my CD. Their current rate on a 5 year CD is only 2%, and other banks are offering 2.31%, so no reason to renew there, but I asked the woman what the loyalty bonus would be if I stayed.
She responded, it would be .005%. As in, instead of 2%, I would get 2.005%. So if I had $100K invested at 2%, I would get $2,000 per year. At 2.005%, I would get $2,005 if I'm doing the math correctly?
I responded, is that a joke? I didn't know banks even worked with decimals so small! She didn't know how to respond to my rhetorical questions, so she just said "no" and politely finished up the call.
I don't know why this bugged me so much, but what is the point in referring to .005% as a loyalty bonus? I just found it downright insulting. Am I being out of line here?
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07-22-2015, 04:14 PM
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#2
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Moderator
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,345
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Not out of line, I would have laughed at it too.
__________________
When I was a kid I wanted to be older. This is not what I expected.
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07-22-2015, 04:15 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Oct 2013
Posts: 1,187
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That is quite rediculous. BTW, may I ask where are you getting 2.31% on a 5 yr CD?
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07-22-2015, 04:28 PM
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#4
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Full time employment: Posting here.
Join Date: Jan 2010
Posts: 540
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Quote:
Originally Posted by freedomatlast
That is quite rediculous. BTW, may I ask where are you getting 2.31% on a 5 yr CD?
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If you go to bankrate.com you can search for best 5 yr CD rates. It is showing that:
- E-Loan and Everbank have 2.31%
- Synchrony Bank and Capital One 360 have 2.25%
I am not sure of any other 2.31% - anyone else know any others?
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07-22-2015, 06:00 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Mar 2013
Location: Southern California
Posts: 3,999
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Quote:
Originally Posted by Earl E Retyre
If you go to bankrate.com you can search for best 5 yr CD rates. It is showing that:
- E-Loan and Everbank have 2.31%
- Synchrony Bank and Capital One 360 have 2.25%
I am not sure of any other 2.31% - anyone else know any others?
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Correct - that is where I look when I'm in the market for CDs. I've been going with Barclays, because their 5 year CD only has a 6 month early withdrawal penalty. So if interest rates ever go up, it's relatively painless to exit out and reinvest at the higher rates.
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07-22-2015, 06:08 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Some CDs at Ally are "raise your rate" products that allow present CD customers to call and get the new higher rate if Ally offers a higher rate on te same term int he future. So, I was pretty sure their CD rates would stay low some of their products (mostly 2 and 4 year CDs.)
Quote:
Originally Posted by Ready
The woman on the phone informed me that I'm entitled to a "loyalty bonus" if I agree to renew my CD. . . . She responded, it would be .005%. As in, instead of 2%, I would get 2.005%.
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Dang, maybe ask her if you could instead have one of the toasters that banks used to give their customers.
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07-22-2015, 06:17 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Jun 2004
Location: W Wash
Posts: 1,644
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I think the "bonus" premium is good on most if not all their CD products. Personally, the 2 year with raise your rate option is all the further duration I am interested in.
Nwsteve
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07-22-2015, 07:06 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Jun 2007
Posts: 2,657
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My bank had a tiered savings rate for a while. If I put enough in to get the next tier the rate went up from 0.01% to 0.02% annually. That's from one hundredth of a percent to 2 hundredths of a percent. The tellers must have had a sales contest so I got a pitch to put more money in there and I was so surprised at the ridiculous bonus that I laughed. Sorry, teller, just trying to do your job.
I went to a drugstore once that had candy bars, normally 3 for a dollar, on sale for only 33 cents each. They had lots of BIG signs for the BIG candy sale. I asked if there were other items on sale. Nope, just these. But they did say sales were up quite a bit.
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07-23-2015, 05:33 AM
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#9
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Thinks s/he gets paid by the post
Join Date: Jan 2014
Posts: 1,181
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I was offered a 0.05% Ally Bank bonus, similar to this person and this person. That would have been an extra $50 per year on $100k. I ultimately went with a secondary market brokered CD with 4 years remaining on the term.
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07-23-2015, 06:07 AM
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#10
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Posts: 3,087
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The three month Treasury was sold at 99.996208, which means you earn 37.92 cents on $10,000 for three months, wow, don't spend it all in one place.
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07-23-2015, 06:30 AM
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#11
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 2,522
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I'm going to throw this out there as a possibility seeing that Ally's offer on the face of it seems so ridiculous. The mathematical expression of two percent is .02, or in other words a $10,000 CD earning two percent annually earns $10,000 x.02 = $200.00. So increasing that percentage rate according Ally's offer would be the current .02 + .005 for a total of .025, which we can all agree equals two and a half percent and in actuality beats the competing 2.31%. Did anyone ask the bank that question? I mean I could be wrong but it would explain why the loyalty bonus would actually make sense and entice current customers to remain loyal. Could the customer service rep have misrepresented the offer?
__________________
"Luck favors the prepared mind"
Pasteur
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07-23-2015, 06:40 AM
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#12
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 2,522
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Quote:
Originally Posted by SCGamecock
I was offered a 0.05% Ally Bank bonus, similar to this person and this person. That would have been an extra $50 per year on $100k. I ultimately went with a secondary market brokered CD with 4 years remaining on the term.
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.05 times $100,000 is actually $5,000. If you mean you were offered .005%, like the OP, then that equals $500.00, not $50.00.
__________________
"Luck favors the prepared mind"
Pasteur
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07-23-2015, 06:41 AM
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#13
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Thinks s/he gets paid by the post
Join Date: Jun 2014
Posts: 1,069
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Quote:
Originally Posted by Golden sunsets
I'm going to throw this out there as a possibility seeing that Ally's offer on the face of it seems so ridiculous. The mathematical expression of two percent is .02, or in other words a $10,000 CD earning two percent annually earns $10,000 x.02 = $200.00. So increasing that percentage rate according Ally's offer would be the current .02 + .005 for a total of .025, which we can all agree equals two and a half percent and in actuality beats the competing 2.31%. Did anyone ask the bank that question? I mean I could be wrong but it would explain why the loyalty bonus would actually make sense and entice current customers to remain loyal. Could the customer service rep have misrepresented the offer?
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I remember a old phone call online of a guy talking with a company trying to get them to understand the difference between .02 dollars and .02 cents. Multiple escalations and they just didn't get it.
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07-23-2015, 06:42 AM
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#14
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Thinks s/he gets paid by the post
Join Date: Aug 2011
Posts: 3,606
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Remember most people (non-ER.org members) can't do "higher math" in their head. If they are told they are getting a bonus they may jump on it..
-gauss
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07-23-2015, 06:48 AM
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#15
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 2,522
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Quote:
Originally Posted by gauss
Remember most people (non-ER.org members) can't do "higher math" in their head. If they are told they are getting a bonus they may jump on it.. -gauss
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I understand but is .005 x $100,000, not $500.00 rather than $50.00?
__________________
"Luck favors the prepared mind"
Pasteur
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07-23-2015, 07:01 AM
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#16
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 2,522
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Ready is right. (Sorry to imply otherwise ready). I checked the Ally webpage for its loyalty bonus program. Their bonus is .05 which when converted to its proper mathematical expression equals .005. There are articles on Ally's loyalty program and its changes. Pre 2014 their bonus used to be .25, or a quarter of a percent, a relatively meaningful bonus in this low interest world. In 2014 that bonus was changed to .15. In 2015 that bonus was lowered again to .05. As gauss suggested they may be hoping that old customers won't compute the actual dollars and assume that the old loyalty program is still competitive. Or not. Internet articles express the point that Ally's previous generous program has been gutted.
__________________
"Luck favors the prepared mind"
Pasteur
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07-23-2015, 07:54 AM
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#17
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Full time employment: Posting here.
Join Date: Apr 2015
Posts: 903
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Quote:
Originally Posted by Golden sunsets
Ready is right. (Sorry to imply otherwise ready). I checked the Ally webpage for its loyalty bonus program. Their bonus is .05 which when converted to its proper mathematical expression equals .005.
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Umm, 0.05% = 0.0005, not 0.005.
0.005 is 0.5%.
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07-23-2015, 08:12 AM
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#18
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Thinks s/he gets paid by the post
Join Date: Jun 2013
Posts: 1,561
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".005% as a loyalty bonus? I just found it downright insulting"
I would also
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07-23-2015, 08:57 AM
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#19
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Thinks s/he gets paid by the post
Join Date: Aug 2011
Posts: 3,606
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Thanks for following up Golden.
Agreed that 0.5% bonus would have been worth something more than the insult which is .005%
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07-23-2015, 09:33 AM
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#20
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,265
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Many big corporations seem to offer their best bonuses to new customers and not the loyal old customers. Recently, I have seen cable and satellite offers for new customers that are far better than the deals offered to existing customers. My credit card company will give tens of thousands of points to new customers while waving a year's fee, but nothing extra to me as a long time customer.
Does anybody at the top ever ask "What is the lesson we are teaching our customers?"
__________________
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The worst decisions are usually made in times of anger and impatience.
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