Ally Bank 11-Month No Penalty CD Review: 1.85% APY for $25k+
Rates updated 7/2/18. Ally Bank raised the rate on their 11-month No Penalty CD and as well as other savings products. If you have older No-Penalty CDs, you may want to take advantage of this higher rate. Here are the new interest rates for the No Penalty CD under their tiered structure (as of 7/2/18):
1.85% APY at $25,000 minimum opening deposit
1.80% APY at $5,000 minimum deposit
1.30% APY at no minimum deposit.
The 11-month No Penalty CD is unique in that while the 1.85% APY rate is locked in at deposit, you can still withdraw your principal and interest without penalty at any time (well, you do have to wait at least 6 days from the deposit date). In other words, your interest rate can never go down, but you can still jump ship if rates rise or if there is a better promo elsewhere.
If you recently opened one of these, remember that Ally Bank offers a “Ten Day Best Rate Guarantee”:
When you fund your CD within 10 days of your open date, you’ll get the best rate we offer for your term and balance tier if our rate goes up within that time. The Ally Ten Day Best Rate Guarantee also applies at renewal.
If you have an existing No Penalty CD past the 10-day rate guarantee, this means you may consider closing it and then opening up a new one at a higher rate. You will have to withdraw everything at once – there are not partial withdrawals. If you have an Ally savings or checking account, you can close the old CD, see the deposit in your savings/checking, and open up a new CD all in minutes online. (Note that savings accounts are limited to 6 withdrawals per month, so use your checking if possible.) You will be extending the term out another 11 months, but since you can always close it at any time it isn’t much of a concern.
Here’s a screenshot of my withdrawal showing no penalty and instant availability when withdrawn directly into an Ally account:
Ally 12-month CD is now at 2.30% APY with a $25k+ deposit (2.20% APY with $5k), and the 2-Year “Raise Your Rate” CD is at 2.50% APY with no minimum deposit. Both of these do have early withdrawal penalties..
CIT Bank 11-Month No Penalty CD is a similar product, currently at 1.85% APY but with a lower $1,000 minimum deposit. These two banks both offer 11-month No-Penalty CDs, and I’ve opened (and closed early) CDs from both places..
I use Ally Bank Online Savings, Interest Checking, and No Penalty CD accounts as my “hub” bank accounts, and then I open additional bank CDs as temporary “spokes” when external rates are significantly higher.