Rates updated as of 11/15/18. Ally Bank raised the rate on their 11-month No Penalty CD. These have been an interesting new product in this rising rate environment. 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 11/15/18):

  • 2.20% APY at $25,000 minimum opening deposit
  • 2.05% APY at $5,000 minimum deposit
  • 1.75% APY at no minimum deposit.

The 11-month No Penalty CD is unique in that while the rate is locked in at deposit, you can still withdraw your principal and interest without penalty at any time (well, you must 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.

For comparison, the Ally Online Savings account is currently at 2.00% APY for all balances. The interest rate on the savings account can go up or down, although in this current rising rate environment that seems unlikely. The Ally 12-month CD is at 2.65% APY, which is fixed but if you withdraw early there is a penalty of 60 days of interest.

In addition, Marcus Bank has a 13-month No Penalty CD at 2.15% APY with a $500 minimum deposit. CIT Bank has a 11-Month No Penalty CD at 2.05% APY with a $1,000 minimum deposit. If you have lower balances, one of these may be a better fit.

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 no partial withdrawals allowed on this type of CD. 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Here’s a screenshot of my withdrawal showing no penalty and instant availability when withdrawn directly into an Ally account: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_np_withd

You can use my Ultimate Rate-Chaser Calculator to get an idea of how much additional interest you’d earn if you switched over.

Ally is my primary “hub” bank, despite not being at the tippy-top of all rates. I like Ally because their rates are generally competitive across both savings and CD products and they offer an easy-to-use website, Live Chat customer service, easy bank account linking, and 1-day bank transfers in many cases. I then proceed to open additional bank CDs as temporary “spokes” when external rates are significantly higher.

Bottom line. The Ally No Penalty CD is unique in that you are always able to move out to a higher rate, but you’ll never get a lower one. This means you can even break the No Penalty CD simply to get another No Penalty CD if/when the rate rises again.

“The editorial content here is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are the author’s alone.”

Ally Bank 11-Month No Penalty CD Review: 2.20% APY for $25k+ from My Money Blog.


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