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Ally no-penalty 11 month CD now at 1.5%
Old 06-24-2017, 10:13 PM   #1
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Ally no-penalty 11 month CD now at 1.5%

I was just checking the ally.com site and it looks like their 11 month "no-penalty" CD is now paying 1.5% for deposits over $25,000.

And it looks like the only restriction to avoid an early withdrawal penalty is you have to wait at 6 days after you fund the CD before you can take your money (plus any interest earned) out.

Seems like a no brainer and a good alternative for money just sitting in a savings account (even the $1.05% high yield ally savings account).

Am I missing something?
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Old 06-25-2017, 04:08 AM   #2
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Yep!
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Old 06-25-2017, 04:47 AM   #3
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Yep!
"Yep!" a no brainer or "Yep!" OP is missing something?
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Old 06-25-2017, 04:59 AM   #4
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I looked it over on Ally and see no issues. Looks like a good deal.
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Old 06-25-2017, 05:42 AM   #5
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Ok, thanks for pointing that out! I certainly have some savings cash I can move into that.
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Old 06-25-2017, 07:33 AM   #6
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Thanks Johnny for the tip - I am on the phone now converting a bunch of Ally No Penalty CDs I have at a lower prior rate (1.25%).
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Old 06-25-2017, 08:15 AM   #7
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Thank you, JohnnyB! I just converted the entire balance of my 1.05% online savings account to the 1.5% 11 month, no penalty CD.
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Old 06-25-2017, 08:19 AM   #8
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"Yep!" a no brainer or "Yep!" OP is missing something?
It was yep to the first three paragraphs.

Missed the last sentence.
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Old 06-25-2017, 08:20 AM   #9
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Yeah, I've got some sitting there I can buy CDs with.
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Old 06-25-2017, 08:23 AM   #10
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I noticed that yesterday as well. I have some cash I just put into an Ally 1.05% savings account that will be moving to the CD, as well as my late father's estate money that has to sit for a year before it can be disbursed to the heirs.

Who would have ever believed a few decades ago that 1.5% would be considered an incredibly high rate?
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Old 06-25-2017, 08:26 AM   #11
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An important note for Ally Bank CDs:

I've decided to only buy their no penalty CD. Why? Because their other CDs require permission front Ally Bank to withdraw funds early. They may have clear penalties established, but permission is also required. Their No Penalty CD is the only one without this constraint.

https://thefinancebuff.com/ally-bank...from-a-cd.html

They are not the only bank, but it is uncommon.
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Old 06-25-2017, 08:31 AM   #12
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I guess the only downside is that you can't treat it like a savings account. If you want to withdraw, you have to take out the full balance. If you're putting in more than $25k, you may want to open multiple.
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Old 06-25-2017, 09:30 AM   #13
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Originally Posted by audreyh1 View Post
An important note for Ally Bank CDs:

I've decided to only buy their no penalty CD. Why? Because their other CDs require permission front Ally Bank to withdraw funds early. They may have clear penalties established, but permission is also required. Their No Penalty CD is the only one without this constraint.

https://thefinancebuff.com/ally-bank...from-a-cd.html

They are not the only bank, but it is uncommon.
audrey........do you know that the "If we consent...." clause does not apply also to the no penalty CD? It is not clear to me reading the Deposit Agreement & Disclosures that the no penalty CD is any different. Surely they would get a lot of negative reaction if they did impose the "We must consent" clause and they obviously do not intend to if they don't have to but in some rare emergency situation, I could see them doing that .

Perhaps it is wise to have some liquid assets elsewhere just in case.
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Old 06-25-2017, 09:30 AM   #14
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Thanks. Another benefit of this site.

Several years ago I took advantage of another tip - 3% Penfed 5 year CD's.

A few more tips like these and I won't be able to spend my kid's inheritance in one place.
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Old 06-25-2017, 10:53 AM   #15
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audrey........do you know that the "If we consent...." clause does not apply also to the no penalty CD? It is not clear to me reading the Deposit Agreement & Disclosures that the no penalty CD is any different. Surely they would get a lot of negative reaction if they did impose the "We must consent" clause and they obviously do not intend to if they don't have to but in some rare emergency situation, I could see them doing that .

Perhaps it is wise to have some liquid assets elsewhere just in case.
Yes. If you look at the agreement on the No Penalty CD, the clause explicitly excepts that particular CD.

OK - here is the language from recent no penalty CD (from the Ally Bank Deposit Agreement Effective January 7, 2017):
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Certificate of Deposit (CD) — This account allows you to make your account-opening deposit by check, ACH transfer, transfer from another Ally deposit account or wire transfer. By opening a CD, you have contracted to keep the deposited funds on deposit until the maturity date of the CD. A partial withdrawal of principal before maturity is not permitted on any CD. While an actual certificate is not issued, you will receive a funding letter with all the pertinent information about the CD. Except for the Ally No Penalty CD, a withdrawal of the entire principal before maturity will be permitted only with Ally’s consent and an interest penalty that is described in More About Certificates of Deposit and IRA CDs, Section I.B.6, will apply.
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Old 06-25-2017, 11:25 AM   #16
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Yes. If you look at the agreement on the No Penalty CD, the clause explicitly excepts that particular CD.

OK - here is the language from recent no penalty CD (from the Ally Bank Deposit Agreement Effective January 7, 2017):
Thanks....missed that part was looking at 1.B.6. I guess that's as close as it's gonna get. The language is a bit nebulous tho........they could have said:
For the no penalty CD, no Ally consent is needed to terminate the CD early.
Instead they say for other than no-penalty CDs, you need Ally consent and EWP will apply. This suggests that the no-penalty CD is treated differently....but that could mean either no EWP or no consent needed or both. Guess I'm being cynical ...........have no doubt they mean well but wonder what they will do in a crunch.
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Old 06-25-2017, 11:29 AM   #17
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Thanks....missed that part was looking at 1.B.6. I guess that's as close as it's gonna get. The language is a bit nebulous tho........they could have said:
For the no penalty CD, no Ally consent is needed to terminate the CD early.
Instead they say for other than no-penalty CDs, you need Ally consent and EWP will apply. This suggests that the no-penalty CD is treated differently....but that could mean either no EWP or no consent needed or both. Guess I'm being cynical ...........have no doubt they mean well but wonder what they will do in a crunch.
I thought it was pretty clear that the No Penalty CD did not require Ally Bank approval for early withdrawal.
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Old 06-25-2017, 11:53 AM   #18
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Often meaning is in the eyes/brain of the beholder,not in the weasel words of the discloser.
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Old 06-25-2017, 12:00 PM   #19
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Often meaning is in the eyes/brain of the beholder,not in the weasel words of the discloser.
I really don't think they could get away with that. They do have to be somewhat customer responsive after all.
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Old 06-25-2017, 12:04 PM   #20
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Thanks! A nice 0.41% bump in interest for many of the dollars we have idling and waiting for the next hard money loan.
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