Table Of Content
If you’re looking to get the best return on your savings with the minimal amount of risk, you may have already come across Ally Savings.
However, Ally also has a variety of CDs with terms ranging from three months to five years and various options to choose the best product for your requirements and circumstances.
So, here we’ll delve into the choice of Ally CD rates to help you to determine if they are a good option for you.
Ally CDs
APY Range
Minimum Deposit
Terms
Our Rating
Ally Bank CDs
APY Range
Minimum Deposit
Terms
Our Rating
How Ally CDs Work?
Ally currently has three types of CDs, but none of the CDs have a minimum deposit requirement.
The Ally High Yield CDs have terms of three months to five years, with the rates weighted towards terms of 12 months or longer. However, if you need to withdraw your funds before the CD matures a penalty will apply.
The penalty varies from 60 days of interest if the term is 24 months or less to 150 days if your CD term is four years or longer. After maturity, there is a 10 day grace period to withdraw your funds, but Ally does have a promotion offering a Loyalty Reward if you renew your CD up to 30 days before the maturity date.
CD Term | Early Withdrawal Penalty |
|---|---|
3 Months | 60 days of interest
|
6 Months | 60 days of interest
|
9 Months | 60 days of interest
|
12 Months | 60 days of interest
|
11 Months – No Penalty | / |
36 Months | 90 days of interest |
60 Months | 150 days of interest
|
The final Ally CD product is a no-penalty CD. The current rate for this CD is better than the shorter-term Ally High Yield CDs, but you’re not tied to the CD maturity, and it makes it one of the best no penalty CDs available.
If you need access to the funds before the end of the 11 month term, there is no early withdrawal penalty. The only restriction is that you cannot make a withdrawal until six days after you opened the account.
All of the Ally CDs have no maintenance fees, no minimums and you can benefit from a loyalty bonus if you renew your CD. The current loyalty bonus offers are available when your CD is 30 days or less from maturity.
Ally Bank CDs Rates: Higher APYs For Longer Terms
Ally also has a “Raise Your Rate” CD with a choice of a two-year or four-year term. The starting rate for both terms is the same, which is less than the average rate on the High Yield CD.
The CD rates for 12 months are among the highest in the market, and long-term CDs, such as 5-year CDs present competitive rates.
However, the attractive feature of this CD is that if the Ally rate goes up, you can raise your rate once for a two-year term and twice for a four-year term product.
If you need access to the funds before the CD matures, there is 60 60-day of interest penalty for the two-year term CD and a 120-day interest penalty for the four-year term.
CD Term | APY |
|---|---|
3 Months | 3.00% |
6 Months | 4.40% |
9 Months | 4.45% |
12 Months | 4.50% |
11 Months – No Penalty | 4.00%
|
36 Months | 4.00% |
60 Months | 3.90% |
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How Much Can You Earn If You Deposit $100,000 Today?
Here are the expected earnings (before taxes), assuming a deposit of $100,000 into Ally CD, in the event that interest is compounded daily and there is no early withdrawal penalty:
CD Term | APY | Interest Earned |
|---|---|---|
3 Months | 3.00% | $742 |
6 Months | 4.40% | $2,193 |
9 Months | 4.45% | $3,346 |
12 Months | 4.50% | $4,538 |
11 Months – No Penalty | 4.00%
| $3,682 |
36 Months | 4.00% | $12,564 |
60 Months | 3.90% | $21,206 |
Ally CD vs Savings Rates
Ally is perhaps best known for its impressive savings account, but how do the rates stack up against Ally CDs?
As of May 2024, the Ally savings rates are competitive with the Ally CD rates. Currently, Ally Savings offers the same rate as the “Raise Your Rate” CD and a higher rate than the three-month high-yield CD. However, for the No Penalty CD and the longer-term High Yield CDs offer higher rates.
To determine whether Ally CDs or Ally Savings are a better option for you, you need to be aware of the product differences:
- With the exception of the no penalty CD, if you need to cash out early, you will incur an early withdrawal penalty.
- Ally Savings allows you to access your funds at any time, but you are limited to six withdrawals in any calendar month, since it is a high yield savings account.
- Another important difference is that you can add funds to Ally savings at any time. This means that if you want to continue building your savings fund, you can access the impressive rate with Ally Savings.
Ally Savings also has “buckets”, so you can plan for different savings goals.
Ally CD Rates vs Ally Money Market Account Rates
The Ally Money Market account currently offers the same rate as an Ally Savings account, which means that it compares favorably with the “Raise your Rate” and three month high yield CD, but it is less than the longer term high yield CDs and No Penalty CD.
The key difference between these products is that your funds are tied into a CD term unless you have a no penalty CD. While you can withdraw from a CD, you will incur a penalty.
However, with the Ally Money Market account, you can access your funds at any time. In fact, you are issued with a debit card and checks for an Ally Money Market account, which makes it even easier to access your money as and when you need it.
As with Ally CDs, there are no monthly maintenance fees or charges to worry about. So, if you have concerns about tying up your money, you may prefer an Ally Money Market account, but if you don’t have these concerns, the longer term Ally high yield CDs do offer a significantly higher rate of return.
About Ally Bank
Ally Bank may seem like the new kid on the banking block, but it has actually been operating for over 10 years as it was established in 2009. Ally is a full-service online bank that offers not only savings, CD, and Money Market accounts but also loans, mortgages, checking accounts, investments, and retirement services.
Ally has developed an excellent reputation for offering services with low fees, 24/7 customer support, and highly competitive rates. With its addition of checking accounts, Ally is now a viable alternative to traditional banks, as you can cover all of your day-to-day financial needs solely using Ally.
Here's our Ally bank review for 2024.
FAQs
Does Ally Offer No Penalty CD Rates?
Yes, Ally does offer a no penalty CD. This has an 11 month term and a competitive rate, but if you need access to your funds early, you can with no penalty. The only restriction is that you cannot make a withdrawal in the first six days after funding your CD.
Does Ally offer promotions on CDs?
Ally does have loyalty promotions, if you renew your CD up to 30 days before your CD matures.
Do Ally CDs come with a grace period?
Yes, there is a 10 day grace period after your CD matures. During this time, you can withdraw funds or make changes to your CD without any penalties. After 10 days, unless otherwise instructed, the CD will auto renew.
How is Ally CDs interest calculated?
Interest on Ally CDs is calculated and compounded daily.
How does the Ally early withdrawal penalty work?
Unless you have a no penalty CD, there is an early withdrawal penalty if you need your funds before the CD matures. This is calculated as a number of days of interest.
For high yield CDs, this varies from 60 days to 150 days depending on your CD term. For the Raise your ate CD, the penalty is 60 days or 120 days respectively for two year and four year term CDs.
Compare Ally CDs
Discover CDs vs Ally CDs
Discover and Ally offer online only savings accounts with several benefits, tools and sometimes even promotions. Here's our full comparison: Discover CDs vs Ally CDs
Synchrony CDs vs Ally CDs
Synchrony Bank and Ally CDs offer competitive rates, including no penalty CDs. Which one is the winner? Check out our full comparison: Synchrony CDs vs Ally CDs
Citibank CDs vs Ally CDs
Citi Bank and Ally offer competitive CD rates, including no penalty CDs. Which one is the winner? Check out our full comparison: Citibank CDs vs Ally CDs
How We Rate Certificates of Deposits: Our Methodology
The Smart Investor team has thoroughly examined certificate of deposit (CD) offerings from various banks, considering multiple factors to provide a comprehensive evaluation. Here's how we rated them across four key categories:
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CD Rates (50%): We meticulously analyzed the interest rates offered by each bank on their certificate of deposit (CD) products. Higher ratings were awarded to banks offering competitive rates that provide maximum returns for customers' investments. Factors such as the yield curve, current market conditions, and consistency of rates were considered to assess the attractiveness of each bank's CD rates.
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CD Features (30%): This category evaluated the features associated with each bank's certificate of deposit offerings. Factors considered include the variety of terms available, early withdrawal penalties, minimum deposit requirements, and any additional features or benefits. Higher ratings were given to banks offering a diverse range of CD terms, reasonable early withdrawal fees, and flexible options to meet customers' investment needs.
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Customer Experience (10%): A positive customer experience is paramount, even when investing in CDs. We assessed each bank's performance in this area, considering factors such as the ease of opening a CD account, the responsiveness of customer service, and overall user satisfaction. Higher ratings were assigned to banks with efficient account opening processes, helpful customer support, and a track record of satisfying customers.
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Bank Reputation (10%): The reputation of a bank is a critical consideration when investing in CDs. We evaluated each bank's reputation based on factors such as financial stability, regulatory compliance, and public perception. Higher ratings were given to banks with a solid reputation for reliability and trustworthiness, ensuring customers' investments are safe and secure.
By considering these categories and assigning appropriate weights to each, our review aims to provide valuable insights to help individuals make informed decisions when investing in certificate of deposits.
