Ally Bank Ten Day CD Rate Guarantee

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10 DaysOne of the most annoying things in personal finance is opening a bank account and then seeing the interest rate drop. This happened very often in the falling interest rate environment of the last year and a half. I remember opening an online savings account only to see the rate fall the next day! It’s not bait and switch, it’s not sneaky, and banks don’t do it on purpose because nothing stops you from leaving. Interest rates aren’t guaranteed. It’s just how it is.

There is only one thing more annoying than falling interest rates, it’s rising interest rates after you’ve opened a new certificate of deposit! With CDs, if you close one before it matures, you will pay a penalty of three to six months’ interest. Again, it’s not bait and switch, it’s just the nature of fluctuating interest rates.

10 Day Rate Guarantee

That’s why it’s kind of nice of Ally Bank to offer a ten day rate guarantee on all new and renewing certificates of deposit, especially given today’s CD rates. If the rate goes up within ten days of you opening or renewing a CD, you get the new rate automatically. You don’t have to do anything, your rate is automatically increased.

When should you open a CD? As long as I’ve been looking at Ally Bank CD rates, they usually change their rates on Fridays. If you want the maximum window then you want to open your CD on a Wednesday or Thursday. This gives you two potential rate changes in your ten day window.

What else can you do? You can open up a bump-up CD, which lets you increase the rate once per CD, or a triple option CD, where one of the options is the bump up provision. The rates are usually lower than the same maturity CD at the same bank, because you have more options, but it can alleviate your fears of being locked into a lower interest CD.

In the end, remember that interest rates generally don’t move around a significant amount. Lately we’ve only see changes of 0.05% or 0.10% in either direction. Over the course of a year, an extra 0.05% APY on a CD with $1,000 is only fifty cents!

(Photo: puntodevista)

{ 9 comments, please add your thoughts now! }

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9 Responses to “Ally Bank Ten Day CD Rate Guarantee”

  1. zapeta says:

    My days of rate chasing are done too. That being said, its nice of Ally to look out for their customers by locking them in at a higher rate if it goes up especially since they don’t have to.

  2. eric says:

    Yup not much of a rate chaser (at least in this environment!) but having more flexible CD options is a good thing.

  3. Jim says:

    Rate chasing just isn’t worth the effort, especially when you remember taxes. A quarter of that fifty cents goes to the tax man. 🙂

  4. Anthony says:

    So far, I’m loving Ally. The CD rates are among the best, and the online savings rates are also among the best.

    They’ve always offered great customer service and now they are just getting better…

    I’m building a CD ladder with Ally, and I’m happy to do so with them.

  5. Can’t quarrel with anything any of you said, and don’t want to. But it strikes me this is pretty nifty marketing on Ally’s part too; they’ve got you in the door no matter what the banks down the street offer.

  6. Don’t make rash decisions, be safe. Observe the safety rules of FDIC insurance.

  7. Daniel says:

    I have my main savings with Ally and about a dozen CDs now, all laddered through them. I enjoy their slightly-above-average rates, the online chat option for customer service, and most importantly, I like their purple/magenta-black-white color scheme.

  8. That’s great that Ally seems to be looking out for their customers. Too bad it’s only 10 days! 😉

  9. daemondust says:

    This is a great marketing ploy for them. Even if they keep this rate and people keep putting their money back into it, it’s only costing them 50 cents a person (assuming a $1000 investment, of course) for all this free advertising.

    But, I can’t help but think this might be a last ditch effort to get an immediate influx of cash. Maybe they have an audit coming up and don’t quite have enough cash in reserves to cover their deposit accounts?

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