Yes, Ally was GMAC in the past. But I don’t hold it against them. They are an FDIC insured bank, extremely low risk.
I keep much of my emergency funds in savings (1.25%) and short-term CDs (1.5%) with Ally for the consistently higher interest rates. And I have multiple accounts with different registration details to maximize the FDIC insurance.
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I use a combo of Series I treasuries, short term muni funds ( VMLUX and VMPYX ), and CDs -- 3 years at 1.9-2%.
I try to mitigate the risks of inflation, interest rate hikes, and default. Pick your poison.Leave a comment:
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YES They got a giant bailout. From CB. Hello! We were all alive and invested 10 years ago?Leave a comment:
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You do know that ALLY was GM finance in 2009. They renamed themselves to mitigate the STENCH. Thanks for playingLeave a comment:
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I am hoping to invest short term cash reserves for the highest low risk return. I have placed some funds at online Ally Bank, which currently pays 1.5% for an 11 month CD, no penalty for early withdrawal. I have some funds in tax free (free of both state and federal) municipal bonds, but this investment, while it has been earning around 3% tax free, carries some interest rate risk should I ever need to cash out.
Ally’s FAQ says the CD interest is credited when the CD is matured or at the yearly anniversary. For the 11 month CD, there is no penalty for early withdrawl, but do you get the prorated interest in such case or do you forfeit any interest accrued? I am looking for a good place to park some short term reserves which I may need in the next 3-12 months. Where can you look up such tax free municipal bonds?
Thanks
HI
Re: Ally 11 month no penalty CD at 1.5%
You can pull your funds out any time starting 7 days after you buy the CD. If you allow the CD to mature, you get your interest credited at 11 months when it matures. If you pull your funds out early, the process takes 2 business days for you to get your money, but you will get your interest credited for whatever time period you held the CD upon closing the CD.
An Ally Bank customer posted about having a positive experience closing the 11 month CD early:
https://www.depositaccounts.com/blog/2011/12/my-experience-with-ally-banks-no-penalty-cd.html
Re: tax free municipal bonds
I like shorter maturity bond funds currently. Shorter bond maturities reduce the interest rate risk in the current environment where there is a good chance that interest rates will slowly be rising. This is important if you cash out early, as the underlying share value for a long term bond fund will go down when interest rates rise. The short duration bond fund shares do not fall significantly in value when rates rise, but depending on the duration of the bonds, they may fall a bit.
Vanguard has low fee bond funds of many types. I have invested in an intermediate term bond fund
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0071
and I also have some that are tax free. You can choose a bond fund free of federal taxes if you live in a no tax state, or a state specific fund which is free of federal, state and local taxes. Vanguard is conservative in their bond investments. They have no exposure to Puerto Rico bonds, for example. Here is an example of an intermediate duration bond fund free of federal taxes.
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0042
Personally, I have invested in a fund that is specific to my state.Leave a comment:
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I am hoping to invest short term cash reserves for the highest low risk return. I have placed some funds at online Ally Bank, which currently pays 1.5% for an 11 month CD, no penalty for early withdrawal. I have some funds in tax free (free of both state and federal) municipal bonds, but this investment, while it has been earning around 3% tax free, carries some interest rate risk should I ever need to cash out.
Ally's FAQ says the CD interest is credited when the CD is matured or at the yearly anniversary. For the 11 month CD, there is no penalty for early withdrawl, but do you get the prorated interest in such case or do you forfeit any interest accrued? I am looking for a good place to park some short term reserves which I may need in the next 3-12 months. Where can you look up such tax free municipal bonds?
Thanks
HILeave a comment:
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I have placed some funds at online Ally Bank, which currently pays 1.5% for an 11 month CD, no penalty for early withdrawal.
Thanks for the tip!
I just moved most of my Ally cash from savings to the No-Penalty CD. It took all of two minutes. Improved my interest rate from 1.2% to 1.5% (note: minimum of $25,000 to get the 1.5% APY)Leave a comment:
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If the Crixus scenario happens and the world as we know it comes to an end I think our medical skills would be more valuable than gold. The roving hordes will all need lacerations sewn up and babies delivered.
I am also interested in the best place for short term reserves. I currently keep about 50% in a vanguard mmf and 50% in a short term bond fund.Leave a comment:
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Buy tons of physical gold bars and doubloons. Bury them all over the place in small parcels over a 30 mile area, and then make a detailed map. Take a long hard look at the map, and then eat the map. When the apocalypse comes, just remember your caches, dig them up and blammo! You'll be king of the new world!
An even better plan would be to buy a strategically located small farm and house, practice your animal husbandry (rabbits, goats, and chickens) and tend appropriate crops so you're ready for the big day. Invest in freeze dried meals, canning jars, food prep and storage, blacksmithing, guns, ammo, knives and fishing equipment. Remember to stay in peak physical shape for the ensuing battles with roving hordes.
Or.... just keep it in the Ally account for now.
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Ally has yuuuge exposure to subprime auto. FDIC will be meaningless in the next crisis.
Cut out the middle man.
https://www.treasurydirect.gov/RS/UN-AccountCreate.do
considering the risk Ally is taking with your deposits, why only 1.5%? When you can get that risk free. With no management fee.
Interest rate risk tho
The YC is flat. 6 mo is the sweet spot. The real risk is a Bretton Woods type get together in which sovereign debt is reconciled…currency devalued.
What worries me is what I’m going to do if the Fed goes into the negative zone. Do I go all in on gold then?
I'm pretty sure I know what you mean, and I think i's safe to say that we've definitely entered the danger zone!
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Ally has yuuuge exposure to subprime auto. FDIC will be meaningless in the next crisis.
Cut out the middle man.
https://www.treasurydirect.gov/RS/UN-AccountCreate.do
considering the risk Ally is taking with your deposits, why only 1.5%? When you can get that risk free. With no management fee.
As you may be aware, if we are in a situation in which FDIC is meaningless, your gold miner stock certificates will only have value as kindling….
I think you are forgetting about Masse's reverse English liquidity pyramid :PLeave a comment:
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Ally has yuuuge exposure to subprime auto. FDIC will be meaningless in the next crisis.
Cut out the middle man.
https://www.treasurydirect.gov/RS/UN-AccountCreate.do
considering the risk Ally is taking with your deposits, why only 1.5%? When you can get that risk free. With no management fee.
As you may be aware, if we are in a situation in which FDIC is meaningless, your gold miner stock certificates will only have value as kindling....Leave a comment:
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Ally has yuuuge exposure to subprime auto. FDIC will be meaningless in the next crisis.
Cut out the middle man.
https://www.treasurydirect.gov/RS/UN-AccountCreate.do
considering the risk Ally is taking with your deposits, why only 1.5%? When you can get that risk free. With no management fee.
Interest rate risk thoLeave a comment:
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I had a lot of cash parked in my Chase Bank savings account, but they pay almost no interest. It sounds like Ally Bank is being used by others to park cash. Has anyone found any better tax free options?
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