Posted by William Charles on December 19, 2017
Savings Accounts

Published on December 19th, 2017 | by William Charles


[Rate Increase] Ally Bank CD With No Early Withdrawal Penalty – Offering Up To 1.6% APY

Update: 01.03.18 rate has decreased to a maximum of 1.6% now

Reposting 12/19/17 since rate has increased again, up to 1.75% now.

Reposting 12/14/17 since top rate increased to 1.60% APY from 1.5%. They also offer a ten day guarantee so if the rate increases within 10 days of funding account they will automatically increase the APY after that ten day period.

Offer at a glance

  • Interest Rate: Up to 1.6% APY
  • Minimum Balance: None
  • Maximum Balance: None
  • Availability: Nationwide
  • Insured: FDIC

The Offer

Direct link to offer

  • Ally Bank offers 11 month certificated deposits with the following rates:
    • 1.15% for opening deposits less than $5,00
    • 1.35% for opening deposits $5,000-$25,000
    • 1.75% for opening deposits $25,000+


The Fine Print

  • As long as the account isn’t closed within the first six days you keep the interest earned with no penalties

Our Verdict

Interest rates on savings accounts are on the increase, the best high yield savings accounts are currently offering 1.30% so this CD is slightly better at 1.5% for deposits of $25,000. My recommendation is to focus on the rewards accounts that offer up to 5% APY instead. Also as noted in the comments you must withdraw the full amount from the CD, no partial withdrawals.

Hat tip to @FiSnowball

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Sorry, to clarify, this CD will accrue interest every month, and regardless of how early I withdraw it, I’ll still receive all the interest it had gained so far, no penalties, right?

I already have more than this in Ally and don’t want to put more money into high interest savings accounts that have DD/min spend requirements, so sounds like I might as well put my Ally savings into this.

Not sure why these so-called “high inteest’ saving accounts are of any interest (excuse the pun) when it’s fairly easy to set up 2-3% checking accounts?

Could you please elaborate on the easy to set up 2-3% options? On a big sum?? Like 100K.

it takes a simple search on doc or google to see what hes talking about. FYI.

I’m following pretty closely Doc’s posts and like many of you I’ve taken advantage of many of the account openings with a nice interest and so I have
35K parked at the New Buffalo Savings,
5 of the nespend account options with 1K each,
2 of the new Insight accounts with 5K each (3rd card on the way), plus one old Insight account with 5K.
The rest is in a 1% account, which is what I would like to move somewhere move profitable. Please give suggestions that don’t require too much monthly work. Thx!

You can get a 3rd??

Remember that’s ALL your money, you cannot partially withdraw from an Ally CD.

Just open multiple CDs if you are so concerned…

Good idea!

I was wondering what made this different than a savings account other than the interest rate. Thanks.

My guess is that regular saving account allows you to withdraw funds up to 6 times in a calendar month. This one, with some of the comments above indicate if you withdraw, you would have to withdraw the whole amount. That can be played out differently for some ppl like myself. I would not join on this one basically, even though it has no penalty.

Not to mention Ally savings account is already at 1.05% so that eliminates need for the 2 lower balance tiers.

Ally savings is 1.25%.

6 months later, yes…. 😉 The Ally savings rate and Ally CD rate have changed a couple times over this span.

Wow sorry I clicked the new post, I forget the comments carry over from old post.
Didn’t check the date.

There’s an option of choosing how interests will be distributed when opening the CD, and I think I should choose monthly instead of mature date if I may early withdraw my CD?

You can, withdraw in any case. No penalty. But all of them at once.
Also, if you select monthly check of the interest, that portion of course cannot earn you interest. If you leave it then it will. That’s the only difference.

Are you sure you will earn compound interest if you have the CD interest deposited back into the CD? I was under the impression that the APY will only apply to the initial deposit. I changed my CD settings to deposit the interest into my normal Ally Savings account that way I could earn interest on that.

Yeah, even if you select the option to pay interest at maturity, you still get all of the interest accrued up to the point of CD closure if you decide to close early.

I know this for certain because I just did it to upgrade from their 1.25% no-penalty CD from December to the new 1.35% one.

Long and informative chat with them.
Soft pull, plus chex system.
Initial deposit can be: wire the funds, transfer the funds or mail in your check to be deposited.
If you plan to link your other account online after opening, then select option that you will send a check, just so you can finish the application. Then after opening, link your accounts, and after the standard verification, you could pull the money to be transferred to Ally.

What if I already have Ally savings account , do they still do soft pull and chex system?

Don’t know about that. Chat w them!

I have a savings acct with Ally, but they did the soft pull anyway.

Did you fund with the money from your savings account? If yes, did they withdraw the money from your savings account immediately once you opened the CD account or did it take 1 extra business day to move the money ? Thanks.

I funded with my savings account and it funded the CD immediately.

I just received my Chex report. I’ve opened Ally checking, savings and 12 CDs at a couple different times this year and can verify it’s just a single Chex inquiry when the first account was opened with no subsequent inquiries.

Reward accounts are pretty much useless because they have caps.

GS bank has a savings account at 1.20% APY. Slightly less interest but no $25,000 minimum

It’s up to 1.5% now

I put 25,000 into the 1.35% CD last week, it’s accrued like 5 dollars since. I was gonna make another 25,000 CD anyway, will definitely do so now.

Q: If I close the 1.35% CD now (It didn’t adjust to the new 1.5% APY, in case you were curious), that’d go into my savings account along with the accrued interest, right? I don’t wanna close and lose out on that interest (yes, I know I have to wait at least 6 days before closing)

I would contact Ally to see if you’re still covered by the 10 day rate guarantee. Per Ally: “The Ally Ten Day Best Rate Guarantee for CDs gives you the best rate we offer for your CD term during the ten
days starting with your CD open date, provided you fund your CD within that time.
If you do not make your deposit within the Ten Day Best Rate Guarantee time period, your rate will be the rate
on the day you fund and at the time the funds are deposited to your account(s).”

You’re right, I should be. I’ll check the rates tomorrow and give them a holler if it doesn’t change.

Update: I chatted with Ally and they confirmed that after 10 days with my 1.35% CD are up, on the 11th day, it will reflect the new rate (1.5%).

Since it’s no penalty, it’s totally worth it for how simple and brainless this is. Especially if you’ve already got money elsewhere.

No need to check. I just did and after ten days they are going to give me the new rate plus make it retroactive for the first ten days.
Good deal.

They are going to change you from the 1.35 to the 1.5? I chatted with them and they told me I’d have to open a new CD.

MemoryBank seems like a better option. It’s also 1.5% and since it’s a regular checking account, you can do partial withdrawals as you please.

Thanks for the suggestion. To me the Ally seems better as Memory Bank needs some monthly work and that rate is just for the first year. Here are more details if anyone else needs to compare:

You’ll earn 1% APY base earnings and a bonus of .5% for the first year. After the first year, the interest rate will revert to the standard 1% APY rate. You need to do the qualifying activities, even for the 1% rate.

To be eligible for the bonus rate, you need to do the following three qualifying activities:

Receive at least 1 electronic deposit such as payroll, transfers from other financial institutions, or even Popmoney each month
Use your debit card for at least 5 in-person or online purchases each month
Get your statements online

Since interest rates are going up, I’m sure in a year or less something better will come along. You can automate the deposit requirement and you can do a quick 5 Amazon reloads per month. A few minutes a month seems better than potentially closing the CD and opening another if you need part of your money.

Exactly as you said, since interest rates are going up, and when something better comes along in a year or earlier, one can just move the funds from Ally to the better option.

And you can do the same from MemoryBank. You were listing MemoryBank’s rate for 1 year as a con but it doesn’t seem to really matter.

And for MemoryBank, you can move partial amounts to any good high interest accounts that pop up.

Closed the 1.25% CD I opened months ago and opened these. Was super easy online and only took a few minutes.

You should add a comment about the 10 day guarantee to the post so folks who got one when you posted initially at 1.35% know that if they funded it within those 10 days then they get the guaranteed highest rate ie it gets bumped to 1.50 on the 11th day. I just confirmed mine would be adjusted up then.

if I open multiple CDs with Ally with several days apart, will they still do chex system to each of the CDs?

I was wondering this also. I just called and every time you create a new CD they will do the Chex. However, if you just rollover a CD they won’t.

I just received my Chex report. I’ve opened Ally checking, savings and 12 CDs (no rollovers) at a couple different times this year and can verify it’s just a single Chex inquiry when the first account was opened with no subsequent inquiries.

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