Ally Bank CD vs Savings account?

[DoubleMDs]

Has anyone used an Ally bank "no penalty" CD? They are 11 month terms but with no penalty if you withdraw the money early. The current rate is 1.5% vs 1.15% for their online savings account. The main benefit I see in the savings account is you can make multiple transactions whenever you want. But if you don't need the money for a year or two (for example we are saving for a home down payment in 1-3 yrs, separate from our established emergency fund), the CD seems reasonable.

Obviously it's not going to be a huge amount of money difference either way over a short term, but just curious if anyone has used them and thoughts/comments either way?

[wally world]

We just opened up some of the Ally bank "no penalty" CDs. The minimum amount for the 1.5% rate is 25k (1.25% for <25k and >5k, 1% for <5k). This is our EF & the money had been sitting in an Ally online savings account. I just moved over some of the money (in 25k increments in order to get the higher rate figuring that if the $ was needed, I would just break the appropriate number of CDs prematurely rather than having to break one large CD). It was painless and quick. Keep in mind that you can only make 6 no fee transactions per month with the savings account (and each CD funding individually counts as one transaction... so 4 CD openings = 4 of that months transactions).

 

Here's a thread on the Ally CD's from bogleheads with additional details (in case you hadn't seen it):

https://www.bogleheads.org/forum/viewtopic.php?t=221553

 

Hope this helps!

Best,

WW

[DoubleMDs]

Great. Thanks for the link.

[VagabondMD]

I am comfortable with the FDIC guarantee of Ally and similar too-big-to-fail banks, up to $250k.

I have also recently added a chunk of the 11 month CD and have been a depositor at Ally since their inception.

[lost]

Goldman Sachs Bank (gsbank.com) offers higher savings rate than Ally

[ACN]

lost wrote:

Goldman Sachs Bank (gsbank.com) offers higher savings rate than Ally

Click to expand...

Its 1.29 vs 1.25.  I still prefer Ally as I can open a no-penalty CD easily between accounts.

[PhysicianOnFIRE]

I have my "Emergency / Saving to Build" fund in the 11-month No-Penalty CD at Ally for 1.5% interest.