Comments on: Ally Bank Offers 2-Year Bump Up CDs

By: Sadie

Sadie — Mon, 01 Feb 2010 14:27:58 +0000

On the surface banks do wish to retain deposits to be assured deposits are not going anywhere; however, if that were really true, why do banks always apply a lower interest rate if one fails to follow-up within 10 days of CD maturity?

The only reason they agree to bump up rate is it is a “good sales pitch” to bring in new accounts and not necessarily to lock me in as a long time satisfied customer. Else why does the bank “scramble” with better rates whenever I opt to move a jumbo CD because better rate available elsewhere.

By: Chris

Chris — Sun, 31 Jan 2010 19:21:29 +0000

Banks need to know your deposits aren’t going anywhere. They don’t mind paying for them with bumps.

By: Sadie

Sadie — Fri, 29 Jan 2010 21:39:48 +0000

Does anyone truly believe a bank would make such an offer if the bank anticipated rates would rise? Though I own a bump-up CD I expect “no increases”!

By: jsbrendog

jsbrendog — Fri, 29 Jan 2010 17:53:04 +0000

this sounds like a great thing for the consumer. i wonder what the fine print says..there’s always a catch

By: Shirley

Shirley — Fri, 29 Jan 2010 15:58:18 +0000

basicmoneytips.com says: “CDs are conservative investments, but after the last few years who can argue with someone who wants to go that route.”

Since we are retired seniors, the conservative CD route is definitely for us. With six 12-month ING CDs that mature every other month, we can take advantage of an increase in rate pretty quickly.

By: Ken

Ken — Fri, 29 Jan 2010 15:10:58 +0000

Another nice CD change that Ally has done is to reduce the early withdrawal penalty. It used to be 180 days of interest for long-term CDs. It’s now only 60 days of interest which is way below average. A small early withdrawal penalty can reduce the cost if rates shoot up and you break the CD to get a better rate with a new CD.

By: NateUVM

NateUVM — Fri, 29 Jan 2010 14:32:55 +0000

Well, I think the thing is they are trying to ward off the possibility of inflation taking off. Which I suppose with all the extra money being pumped into the economy we are at a real risk of having. It sounds like they would rather play it safe with rates and that the last thing they want to do is raise rates too quickly and set off a period of steep inflation.

Then again, I have no idea what I am talking about when it comes to these macro-economic details. This is just what it comes off as to me.

Anyone else have any more insight here?

By: saladdin

saladdin — Fri, 29 Jan 2010 14:13:49 +0000

I think one thing the past few years has taught me is that economic theory and economic reality can be very different. I think it is sound theory that rates will go up but the reality is that they are going the opposite. I really don’t know what to think about it.

saladdin

By: NateUVM

NateUVM — Fri, 29 Jan 2010 14:08:20 +0000

Didn’t the Open Trade Committee just come out and say that the Federal Funds rate would remain at 0-0.25% for AT LEAST another year…?

By: Safeway_Sage

Safeway_Sage — Fri, 29 Jan 2010 13:53:38 +0000

With all the talking heads stating that interest rates are going to be going through the roof in the next year, this is a decent hedge against the nibbling away of principal by inflation.

S_S

By: Soccer9040

Soccer9040 — Fri, 29 Jan 2010 13:26:29 +0000

Sounds like an interesting concept. A few percentage points still wont move me away from ING. Its too easy!

By: basicmoneytips.com

basicmoneytips.com — Fri, 29 Jan 2010 12:22:17 +0000

As CDs go today, this seems like a good investment, if you are sticking to CDs. CDs are conservative investments, but after the last few years who can argue with someone who wants to go that route.

Remember they have raised the FDIC insurance to $250K and CDs will fall in that category if purchase from an FDIC insured institution. They reason I state this is sometimes you can find more favorable rates on jumbo CDs if you have that kind of cash.