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1) Sign up for Ally Bank at www.ally.com
2) Open up a 3 month CD
3) Wait for it to mature.
4) Renew the CD to 5 years at 1.59% APY, and receive a .25% loyalty bonus, for a total of 1.84% APY.

It's worth it to pay the penalty to withdraw money from a CD prematurely.
Ally has a small, 60 day interest penalty, so that means if you cancel after:
1 year you get a resulting APY of 1.54%
2 years you get a resulting APY of 1.69%

Edit: If you purchase or renew your CD after 12/07/2013, the penalty is going up:
3 years         90 days of interest
4 years         120 days of interest
5 years or longer   150 days of interest
« Last edited by incendia on March 10, 2014, 09:49:22 AM »

Author Topic: How I'm getting almost triple the 1 year CD % rate for 1 year!  (Read 32945 times)

Offline SoCal Dude

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How I'm getting almost triple the 1 year CD % rate for 1 year!
« on: January 26, 2012, 12:52:17 AM »
My main financial institution is a credit union so your mileage will vary.
Currently, the CD (Certificate of Deposit) rate is: 6 months= .35%, 1 year= .60%, 2 years= .90%, 3 years= 1.2-% & 5 years = 2.1%.
Many folks think that when they put $ in a CD it's "locked up with severe penalties for early withdrawl."
Not necessarily.

I found out that my credit union takes away 6 months of interest for early withdrawal.
I found out if I put $ in a 5 year CD at 2.1% & take it all out at 1 year I'll still get 2.1% for 6 months which is just over 1% annually.
So, I'm getting more than the 2 year CD rate of .90% for having the $ in the account for 1 year!

Your circumstances will vary depending on the early withdrawl rules of your financial institution.
For me 5 years is a long time to lock up the $ but 1 year is just right.  Why settle for .35% for 1 year when I can get almost triple!
Best to all of you & check the rules at your bank/credit union, etc. :)

Offline Dan

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #1 on: January 26, 2012, 12:56:25 AM »
Better deal, Ally only has a 60 day interest penalty.
The 5 year CD there earns 1.79% APY, but if you first open a 3 month CD and wait for it to mature and renew the CD (you can change it from 3 month to any other length in the process) you get a .25% loyalty bonus, bringing the APY to 2.04%
« Last Edit: January 26, 2012, 01:00:13 AM by Dan »
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Offline Connieg

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #2 on: January 26, 2012, 10:19:27 AM »
Better deal, Ally only has a 60 day interest penalty.
The 5 year CD there earns 1.79% APY, but if you first open a 3 month CD and wait for it to mature and renew the CD (you can change it from 3 month to any other length in the process) you get a .25% loyalty bonus, bringing the APY to 2.04%

Link?

Offline mordylich

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #3 on: January 26, 2012, 02:32:19 PM »
Link?
where does it say anything about the .25% loyalty bonus?

Offline Dan

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #4 on: January 26, 2012, 02:34:39 PM »
where does it say anything about the .25% loyalty bonus?
It's unpublished.  If you chat with them they will tell you about it.
I just converted a 3 month into a 5 year myself with the bonus.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline mordylich

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #5 on: January 26, 2012, 02:40:51 PM »
It's unpublished.  If you chat with them they will tell you about it.
I just converted a 3 month into a 5 year myself with the bonus.
  fyi, as per the chat operator:  Currently the loyalty reward is only being offered for renewing CDs that mature on or before 03/31/2012.

Offline Dan

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #6 on: January 26, 2012, 02:46:04 PM »
  fyi, as per the chat operator:  Currently the loyalty reward is only being offered for renewing CDs that mature on or before 03/31/2012.
They always say that.  They have extended it towards the end of each quarter since they opened.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline mordylich

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #7 on: January 26, 2012, 02:50:52 PM »
They always say that.  They have extended it towards the end of each quarter since they opened.
  Good to know.  it also seems that when you renew at the end of the term, you can add in additional funds...so, think it would work to put in a low amount now for 3 months (due to the low interest) and then add in a significant amount more later for the higher rate on all of it?

Offline Dan

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #8 on: January 26, 2012, 02:52:51 PM »
  Good to know.  it also seems that when you renew at the end of the term, you can add in additional funds...so, think it would work to put in a low amount now for 3 months (due to the low interest) and then add in a significant amount more later for the higher rate on all of it?
That's exactly what I did.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline mordylich

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #9 on: January 26, 2012, 02:54:52 PM »
That's exactly what I did.
  And to think I thought the same thing as the Great Dan :)

Offline mordylich

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #10 on: January 26, 2012, 02:55:56 PM »
That's exactly what I did.
  so $100 now and $50k in 3 months will get me the .25% extra on the whole thing?  that's crazy.

Offline Dan

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #11 on: January 26, 2012, 02:57:54 PM »
  so $100 now and $50k in 3 months will get me the .25% extra on the whole thing?  that's crazy.
Correct.
Save your time, I don't answer PM. Post it in the forum and a dedicated DDF'er will get back to you as soon as possible.

Offline BAHayman

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #12 on: January 26, 2012, 03:01:01 PM »
Ally only has a 60 day interest penalty.
The 60 day penalty is on the amount withdrawn, right?

Offline mordylich

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #13 on: January 26, 2012, 03:04:01 PM »
Correct.
  do they give the loyalty bonus more than once?

Offline AsherO

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Re: How I'm getting almost triple the 1 year CD % rate for 1 year!
« Reply #14 on: January 26, 2012, 05:28:31 PM »
It's unpublished.  If you chat with them they will tell you about it.
I just converted a 3 month into a 5 year myself with the bonus.

I can't believe you'd do that (even with the meager penalty which means you can withdraw as soon as you find something more worthwhile), at these rates you aren't even beating the conservative inflation estimates (e.g. CPI) which IMHO are rigged (apparently Ron Paul agrees, not that I care).
« Last Edit: January 26, 2012, 05:33:46 PM by AsherO »
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