Ally Bank boasts many different types of bank accounts, including savings accounts, checking accounts, a money market account and individual retirement accounts (IRAs). One of Ally's strongest offerings, though, is its wide variety of certificates of deposit (CDs). Having a number of CD choices allows you to save for specific goals, from your child's college tuition to an emergency or vacation fund. You can only access these CDs and all other Ally accounts through the bank's online and mobile platforms, as this is a completely branchless bank.
There are three types of proprietary CD accounts available through Ally. These are called the High Yield CD, the Raise Your Rate CD and the No Penalty CD. Each Ally CD compounds interest daily, which can allow your interest to grow marginally faster than an account that compounds monthly.
Prospective customers will also benefit from the "Ally Ten Day Best Rate Guarantee." With this, you’re guaranteed the most favorable rate for your term and balance tier if Ally's rate changes during the 10-day window after your account's open date. This also applies when you renew a CD.
No Ally CD accounts charge a monthly maintenance fee. You can face penalty fees for early withdrawals with the High Yield CDs and the Raise Your Rate CDs, however. If you want to make a withdrawal, you’ll have to wait for the account’s maturity date. Following that time, there’s a 10-day grace period during which you can withdraw your money without incurring charges. Should you desperately need to make an early withdrawal, you’ll lose much of the interest the account earned.
For terms up to 24 months, you’ll lose 60 days of interest if you withdraw your funds early. Three-year terms lose 90 days of interest, four-year terms lose 120 days of interest and terms of five or more years lose 150 days of interest. Of course, the exception here is the 11-month No Penalty CD, which won’t penalize you for early withdrawals.
To calculate how much interest you could earn with a CD, try using SmartAsset's CD calculator.
Ally High Yield CD Rates
When you open an Ally Bank High Yield CD, you’ll have access to seven term lengths. Your interest rate will depend on the account’s term length, with rates increasing as the terms do. There are no minimum opening deposit requirements for these CDs.
|Ally High Yield CD Rates|
|3-Month||All balances: 3.00% APY|
|6-Month||All balances: 3.50% APY|
|9-Month||All balances: 5.00% APY|
|12-Month||All balances: 4.85% APY|
|18-Month||All balances: 5.15% APY|
|3-Year||All balances: 4.25% APY|
|5-Year||All balances: 4.10% APY|
Ally Raise Your Rate CD Rates
The Ally Raise Your Rate CD comes in either a two- or four-year term. Both accounts have the same APY. There are no balance tiers here, so a higher deposit won’t earn you a better rate. This means that each account will have earned the same amount of interest on the same size deposit after two years.
However, as the name suggests, you are able to raise your account’s interest rate over the course of its term. When interest rates go up, Ally will let you know with a message at the top of your Account Details page and/or with custom alerts. All you need to do is request a rate increase through your account, online chat or by calling the bank.
Both of Ally's Raise Your Rate CDs do not have minimum opening deposit.
|Ally Raise Your Rate CD Rates|
|2-Year||All balances: 3.75%|
|4-Year||All balances: 3.75%|
Ally No Penalty CD Rates
The Ally No Penalty CD only comes in an 11-month term. This CD has no minimum balance requirement and offers more flexibility when it comes to accessing your funds because there is no penalty charge for withdrawing your money early. It allows you to withdraw your full balance and interest at any time after the first six days you have the account.
Ally's lone No Penalty CD offers deposit-based APY earns 4.55% on all balances.
|Ally No Penalty CD Rates|
|CD Term||No Minimum Deposit to Open|
Compare Ally Bank to Other Competitive Offers
Compare Ally Bank to Other Competitive Offers
How Much You Could Earn With an Ally Bank CD
With some of the best CD rates on the market, Ally Bank CDs earn well across the board. The High Yield CDs and No Penalty CDs earn according to balance tiers, which means you stand to earn at a higher rate with a higher deposit.
Longer CD terms typically carry higher interest rates. For example, the longest term, 60-month CD earns at an APY of 4.10%, while the shortest term of three months earns at 3.00% APY. However, there are other factors besides interest rates to consider. It’s important to open CDs according to your savings goals. If you have both short-term and long-term goals or need continuing income, it can help to ladder your CDs. This means opening up multiple CDs at a time, each with a different term length. That way, you can grow your money and then withdraw the funds at different times.
Ally Bank compounds interest daily, meaning the interest you earn then earns interest in turn. Essentially, the interest you earn today will earn interest tomorrow, that combined interest will earn more the next day and so on. Many other banks compound interest on their savings accounts monthly or quarterly, which slows your money’s growth from daily to every month or every three months.
The table below outlines what your earnings could look like according to specific accounts and interest rates. The amounts given would be your final balances, not how much extra interest you would earn. For accounts that earn on balance tiers, the lowest tier rate was used.
|Ally Bank CD Earnings|
|Initial Deposit||3-Month CD||12-Month CD||3-Year CD||4-Year Raise Your Rate CD|
How Ally CD Rates Compare to Other Banks
Ally Bank offers some of the highest rates when it comes to savings accounts, including CDs. As you can see in the table below, its rates aren’t necessarily at the very top, although they typically compete with some big names in the financial world, like Capital One and Marcus by Goldman Sachs.
What Ally can offer that many of its competitors don’t is the ability to earn according to balance tiers on certain accounts. The rates you see below for Capital One and Marcus apply to all balances, while Ally (in some cases) offers more favorable rates to those with larger amounts of money.
|Ally Bank CD Rates Comparison|
|CD Term||Ally Bank||Capital One||Marcus by Goldman Sachs|
Should You Get an Ally Bank CD?
All signs point to an Ally Bank CD being an excellent account option. You can earn at some of the best CD rates in the industry with interest compounded daily. This means you get to boost your savings a little bit more than with a competitor. Plus, this is true no matter which CD you choose to open.
Ally Bank CDs can help you save toward both short-term and long-term savings goals with a variety of term lengths. Its three account types also give you differing savings opportunities. If you want to stick to the typical CD structure, you can open a High Yield CD (or two or three, etc.). If you’re holding out hope for an interest rate raise, you can open a Raise Your Rate CD which gives you the opportunity to change your rates during your term. Or if you want to open a CD but you’re worried about early withdrawal penalties, you can choose a No Penalty CD so you can more freely make withdrawals.
Just remember that Ally Bank doesn’t have any physical branches you can visit to open or manage an account. You’ll have to be comfortable managing your money virtually to take advantage of Ally’s excellent rates.