Ally Bank raised the rate on their 11-month No Penalty CD. Here are the new interest rates under their tiered structure:
- 1.50% APY at $25,000 minimum opening deposit
- 1.25% APY at $5,000 minimum deposit
- 1.00% APY at no minimum deposit.
The 11-month No Penalty CD is unique in that while the 1.50% 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.
1.50% APY for $25k+ is higher than any other liquid savings account rate, while there are a handful of banks that beat the 1.25% rate for $5k balances. However, the rates on savings accounts can change at any time. Here the the top banks right now:
- DollarSavingsDirect at 1.30% APY
- BankPurely at 1.30% APY
What’s notable about these banks is that they are both “clones” of existing banks (Emigrant Direct and iGoBanking, respectively) which have lower interest rates. So they have a history of enticing new customers with high rates, and then lowering the rates on existing customers while hoping that they are too lazy or forgetful to move away. If you move funds over, be vigilant and ready to move out.
1.50% APY is also right at the top for most 12-month CDs that do come with early withdrawal penalties, although some have lower minimum deposit requirements in the $5k range.
This can be a great companion acount with the Ally Bank Online Savings and Interest Checking accounts, which are my primary bank accounts. I’ll have to decide quickly how much to move over into this 11-month CD as the rate may not last.
Rates as of 6/20/17.