Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Ally Bank CD loyalty bonus
Old 07-22-2015, 03:43 PM   #1
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 3,995
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?
Ready is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-22-2015, 04:14 PM   #2
Moderator
Walt34's Avatar
 
Join Date: Dec 2007
Location: Eastern WV Panhandle
Posts: 25,299
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.
Walt34 is offline   Reply With Quote
Old 07-22-2015, 04:15 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Oct 2013
Posts: 1,180
That is quite rediculous. BTW, may I ask where are you getting 2.31% on a 5 yr CD?
freedomatlast is online now   Reply With Quote
Old 07-22-2015, 04:28 PM   #4
Full time employment: Posting here.
Earl E Retyre's Avatar
 
Join Date: Jan 2010
Posts: 537
Quote:
Originally Posted by freedomatlast View Post
That is quite rediculous. BTW, may I ask where are you getting 2.31% on a 5 yr CD?
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?
Earl E Retyre is offline   Reply With Quote
Old 07-22-2015, 06:00 PM   #5
Thinks s/he gets paid by the post
Ready's Avatar
 
Join Date: Mar 2013
Location: Southern California
Posts: 3,995
Quote:
Originally Posted by Earl E Retyre View Post
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?
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.
Ready is offline   Reply With Quote
Old 07-22-2015, 06:08 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
samclem's Avatar
 
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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 View Post
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%.
Dang, maybe ask her if you could instead have one of the toasters that banks used to give their customers.
samclem is offline   Reply With Quote
Old 07-22-2015, 06:17 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jun 2004
Location: W Wash
Posts: 1,643
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
nwsteve is online now   Reply With Quote
Old 07-22-2015, 07:06 PM   #8
Thinks s/he gets paid by the post
growing_older's Avatar
 
Join Date: Jun 2007
Posts: 2,657
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.
growing_older is offline   Reply With Quote
Old 07-23-2015, 05:33 AM   #9
Thinks s/he gets paid by the post
 
Join Date: Jan 2014
Posts: 1,174
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.
MBSC is offline   Reply With Quote
Old 07-23-2015, 06:07 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Feb 2014
Posts: 3,054
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.
jim584672 is offline   Reply With Quote
Old 07-23-2015, 06:30 AM   #11
Thinks s/he gets paid by the post
Golden sunsets's Avatar
 
Join Date: Jun 2013
Posts: 2,518
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
Golden sunsets is offline   Reply With Quote
Old 07-23-2015, 06:40 AM   #12
Thinks s/he gets paid by the post
Golden sunsets's Avatar
 
Join Date: Jun 2013
Posts: 2,518
Quote:
Originally Posted by SCGamecock View Post
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.
.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
Golden sunsets is offline   Reply With Quote
Old 07-23-2015, 06:41 AM   #13
Thinks s/he gets paid by the post
 
Join Date: Jun 2014
Posts: 1,069
Quote:
Originally Posted by Golden sunsets View Post
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?

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.


Sent from my iPhone using Early Retirement Forum
dallas27 is offline   Reply With Quote
Old 07-23-2015, 06:42 AM   #14
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 3,594
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
gauss is offline   Reply With Quote
Old 07-23-2015, 06:48 AM   #15
Thinks s/he gets paid by the post
Golden sunsets's Avatar
 
Join Date: Jun 2013
Posts: 2,518
Quote:
Originally Posted by gauss View Post
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
I understand but is .005 x $100,000, not $500.00 rather than $50.00?
__________________
"Luck favors the prepared mind"
Pasteur
Golden sunsets is offline   Reply With Quote
Old 07-23-2015, 07:01 AM   #16
Thinks s/he gets paid by the post
Golden sunsets's Avatar
 
Join Date: Jun 2013
Posts: 2,518
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
Golden sunsets is offline   Reply With Quote
Old 07-23-2015, 07:54 AM   #17
Full time employment: Posting here.
 
Join Date: Apr 2015
Posts: 903
Quote:
Originally Posted by Golden sunsets View Post
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.
Umm, 0.05% = 0.0005, not 0.005.

0.005 is 0.5%.
hnzw_rui is offline   Reply With Quote
Old 07-23-2015, 08:12 AM   #18
Thinks s/he gets paid by the post
ownyourfuture's Avatar
 
Join Date: Jun 2013
Posts: 1,551
".005% as a loyalty bonus? I just found it downright insulting"

I would also
ownyourfuture is offline   Reply With Quote
Old 07-23-2015, 08:57 AM   #19
Thinks s/he gets paid by the post
gauss's Avatar
 
Join Date: Aug 2011
Posts: 3,594
Thanks for following up Golden.

Agreed that 0.5% bonus would have been worth something more than the insult which is .005%
gauss is offline   Reply With Quote
Old 07-23-2015, 09:33 AM   #20
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,169
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?"
__________________
Comparison is the thief of joy

The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Customer loyalty programs? imoldernu Other topics 22 01-28-2015 02:55 AM
Ally Bank - free H&R Block Deluxe tax prep offer (online version) caninelover FIRE and Money 6 03-02-2011 05:51 PM
Ally Bank? wrigley FIRE and Money 6 07-17-2009 08:28 PM
Ally Bank Ads Rustic23 Other topics 8 06-01-2009 12:56 PM
Bonus, I don't need no stiinkin' bonus, except... redduck Other topics 8 12-28-2007 09:57 AM

» Quick Links

 
All times are GMT -6. The time now is 07:17 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.