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Ally Bank CD vs Savings account?

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  • Ally Bank CD vs Savings account?

    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?

  • #2
    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

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    • #3
      Great. Thanks for the link.

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      • #4
        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.

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        • #5
          Goldman Sachs Bank (gsbank.com) offers higher savings rate than Ally

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          • #6




            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.

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            • #7
              I have my "Emergency / Saving to Build" fund in the 11-month No-Penalty CD at Ally for 1.5% interest.

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