Ally Bank CD Accounts Review and Overview - Explained with Benefits & Details

Intro hey how's going everybody Welcome to finance with a in this video I'm going to be getting into one of the best options out there for saving your money securely and growing it over time with specifically CD accounts certificate of deposit accounts with Alli bank I'm going to explore everything from their rates terms and the different type of CDs they offer so you can figure out if one of these options is right for you so what is exactly a CD account a CD certificate of deposit is essentially a savings account with a fixed interest rate and a fixed withdrawal date known as a maturity day unlike regular savings accounts CDs often offer higher interest rates because your money stays locked in for a set period if you want to know more about CD accounts specifically overall and explanation of certificate deposits and pros and cons check out my video of CD accounts explained with pros and cons I go in great detail about certificate of deposit accounts I'll leave a link to that video down in the description if you want to check that out in a quick introduction to Ali bank About Ally Bank if you're not familiar with them Alli is an online bank that's known for its competitive interest rates and customer-friendly policy they don't have physical branches which allows them to offer better rates than many traditional Banks especially on CDs and Ally is currently the 23rd largest bank in the United States based on total assets so if you're thinking about locking in your savings at a great rate with a well capitalized secure bank Ali could be a solid option for you it's really simple really quick to open up online like I said I've opened up CDs before with Ally it doesn't take long at all and things move around pretty quickly you know a few days or so you got it set up with the money in there you're just sent back and start enjoying the interest and here Ally CD Account Features are some of the features that are offered with every Alli bank CD account you have the digital banking tools so you can log in check on your account with the Ali mobile app that's available on the Apple and Google Play App Stores and also on your laptop or computer very online orientated bank so you're going to have access to your CD and checking it out online with your mobile phone or laptop or computer also very important all of these CD accounts are FDIC insured your deposits are insured by the FDIC up to the maximum allowed by law and FDIC is a federal agency that ensures your deposits in member banks against loss if the bank holding the deposits were to fail which will protect your Allied Bank deposits up to $50,000 per depositor for each qualifying account ownership category so yeah more information on that on their website also there is no monthly maintenance fees with any of these City accounts so don't expect any kind of sneaky monthly maintenance fees they say from Alli Bank just for having your account open nothing like that no monthly maintenance fees and also as I've told you about the Ally Bank is a name that's very well known very well known Bank very well capitalized so it's one of those banks that you've likely heard of or if you haven't heard of them somebody you know is likely heard of them or maybe even had done business with them me personally I have had a savings account and a CD account with allly before don't have any really big complaints or any complaints I can think of at all with Alli bank so I was uh very pleased with my CD accounts and the savings accounts and I like their app it's kind of minimalist but not too minimalist where you're like Hey where's this feature and that feature it's just to the point with a lot of things but it offers good information where you can check on your account basically and do transfers and and with these CD accounts there's no minimum deposit required to open the account and a state you'll always get the best rate that they offer for their CD term with Ally and they offer a 10day Best Rate guarantee so when you fund your CD within 10 days of your open date you'll get the best rate they offer for your term and balance tier if their rate goes up within that time the Alli 10day best rate guarantee also applies at renewal so once you start your account and fund it if somehow the you know CD the CD rate that you lock in is going to be fixed however CDs as a whole before you lock in them are like variable so you know the apy I talked to you about on this video could change next week tomorrow next month and so forth but when you you know actually open up your account and deposit your money into the account and everything you're locking in that apy that fixed rate for however term length the CD is however with Ally if that rate goes up within that first 10 days they're going to bump you up to that higher apy which is nice and also what they say when you renew your CD they currently have a 05% loyalty reward when you R your CD to any CD with them so if you just keep your money in allly just basically roll it over to another CD when your CD matures and they're going to give you a point 05% boost and they say that check back 30 days before your CD matures to see what that reward is at that time here are some of the other features that Alli C has some of them I've already stated but they're in a couple different sections of the website but there are a few that I wanted to highlight here and tell you about on the screen and first up here all of the interest is compounded daily for all of the CDs the interest is compounded daily and credited back to the CD monthly so that is very nice you'll see the interest gather is one of those things you just like to see and you're likely to see that interest on your account you know each month credited to your CD and that's nice to see you know a total amount of interest earned things like that within the app however technically by default allies want to credit your interest either at maturity for the CDs with terms of 12 months or less or annually at the end of each calendar year for CDs with terms longer than 12 months so technically when they pay it out it's going to be acing it's going to be acre and compounding and all of that but technically they're going to pay it out at one of those moments however for non irra CDs which pertain to all the CDs I'm talking about on this video allly states that depending on the length of your CD term you can choose to have your acred interest paid to you by check or transferred to another account monthly quarterly every 6 months for CDs with terms of 12 months or longer or at the end of the year for CDs with terms longer than 12 months you change the interest payment frequency and dispersement method for your nonr CD by logging in at ally.com or on the mobile app or you can call us there's a couple different ways you can handle the interest that you're getting from Ally for your CD account me personally I just leave it in the account leave it compounding on the CD because I don't need it for anything but some people may have a certain amount of CD in Ally and they want to use the interest it's kind of like payments to help them you know with bills or something else or you know who knows what so there is that option that you can modify within the app online or by calling them to have your interest paid out to you now if you do that keep in mind that the interest won't be compounding because you know with compounding interest and I'll talk a little bit about that more later in the video with the calculations and everything with compounding interest you know it's going to earn interest on your principal amount and the interest itself but if you take that interest out then you're not going to get that interest compounding on other interest it's just going to be compounding on the principle which you know is still nice and you still can estimate that amount and everything but just letting you know that so yeah there is a couple of different options when it comes to the interest that's going to be credited and paid to your CD and we'll do a couple of calculation examples later on in the video also Alli has 247 customer service which is nice because not all banks and financial institutions have customer service hours of that long basically all day every day you know usually it's like 8 to 5 9 to 5 9 to 6 Clos on this day or that day Ally 24/7 customer service and that's a neat feature you'll see on their website basically an estimated wait time for if you would call them at any moment I've already told you about the 10day best rate guarantee so we won't go over that again and also you know online and mobile security guarantee they have this with Alli because it's very online focused bank and that they state that they will guarantee that you will not be liable for any unauthorized online or mobile banking transaction as long as you report the unauthorized transaction by calling them at that number right there within 60 days from when your statement is made available so if you see something fishy something sketchy in your account definitely give Ally a call and try to get that taken care of and also one feature they have I haven't told you about yet is that you can open the CD in in the name of a trust and if you're unfamiliar what the trust is or you want to know some more information about it they have more information about trust on their website if you want to know more about them you know how to get it started how to get it working with your CD or with your bank accounts at Alli more information definitely on the website right there and frequently ask questions and also I've already told you about this but yeah Ally is a member FDIC and Ally does have automatic renewal at maturity of your CD so if you just want to let it just roll over and not really do anything they'll do that for you however you may want to move it to a different term you may want to move it to a different account or transfer it out that's definitely easy to do I've had a CD with Alli before and no penalty CD with them and I you know moved the money out transferred out before the term length was up you know no penalty and moved it to a different bank account and I had no problems or issues with that at all so let's get into specifically what kind of CD accounts that Ally offers these are the three types of CDs that Ally offers high yield CDs which are differentiated by their term length from 3 months to 5 years they offer a raise your rate CD and a no penalty CD first let's start here with Ally Bank High Yield CD the high yield CD their apy changes depending on which term CD you choose at 3 months they offer 3% apy at 6 months 4.90% apy which is their highest yielding CD right here the 6mon CD at 4.90% apy and then they have a 9mon at 4.80% apy a 12 month at 450% apy 18 Monon at 4.25% apy threee at 3.75% apy and a five year also at 3.75% apy same features I've told you about with all the other CDs they have that they have those same features with the no monthly maintenance fees member FDIC and all of that so let's look at some information about specifically these high yield CDs and you can kind of see right here a calculation of how much money you would earn in interest if you had a certain CD with Alli bank so let's go to that six-month CD that is at 4.90% let's say you had $25,000 in that your estimated interest in earnings is going to be around $65 18 so that's just 6 months of your money sitting in that account working for you no matter what the stock market is doing going up crazy going down crazy recession hitting this that whatever your money sitting there in that bank account earning 4.90% for you for that 6 months and it's going to stay fixed at that 4.90% rate even if two months after you open the account Ally drops this 6mon CD down to 3% or 4% or something like that your CD is still going to be earning at 4.90% and that's going to be your earnings right there after that 6 months so the thing with the CD is that you know how much you're going to earn after that certain term Le so that's a nice thing is people want to know if they want to meet a certain goal maybe they want to say Okay I want to save up a certain amount for a vacation for a new tractor for a down payment for to add to a down payment or for a gaming console or a new phone anything like that you know whatever maybe just saving it just to save it they can pretty much you know pick out a term CD put in a lump sum of money and pretty much know how much they're going to get in interest just extra money coming in basically passive income at the end of that term so that is one of the strengths of a CD you can see the comparison right here two other CDs allies just kind of tooting their own horn you know saying hey we offer the highest percentage yield on these CDs right here compared to some these other big Banks but they're not the highest every other month or so I do a video on the top CDs ranked by apy and allly typically is it in that top five because there are other CD accounts out there that have higher Ys however some of them are definitely less known and some people feel uncomfortable putting their money in a bank that's not as known you know and all the banks I talk about are FDIC and sure and I give a little background information on all of them as well but yeah still some people may want to be more you know they feel more comfortable banking with a certain Bank whether it be Capital One or Ally or Bank of America or Sofi or markets by Goldman Sachs discover American Express or so forth you know a bigger well more well established well-known bank and that's fine too cuz some of them have high yeld some of them don't compared to some of the more online focused Banks Capital One Alli Bank you're going to get a better annual percentage yet with them so some people you know they may want to have that old established Bank you know the Wells Fargo the Bank of America things like that JP Morgan Chase but they may want to have you know kind of on the side or kind of like part of their Financial portfolio and online focus bank to get that higher yield and that's what I do kind of a combination of that have local access to ATMs free and local banking services with a you know local brick and mortar type of bank but also have online accounts with online focused Banks to get that higher yield ease of transactions and things like that let's put in another few more calculations on here just to get a detail let's say that 10,000 cuz you see that a lot you online save $10,000 $10,000 once you save $10,000 this happens and this happens I've seen those videos on YouTube which it is a nice amount to have saved just put away you know in the high old savings or in a CD account and let's say you were to do that for their 12 months so allies 12- month CD is at 450% $10,000 in it of estimated earnings in it about $450 so that's what you'll know after that 12 months that's what you would get that 450% $10,000 let's switch that to their six month their highest yielding CD at 4.90% after 6 months around $242 7 you want to go shorter than that you want a 3 months only 3% as you see even Bank of America has a higher apy on them with a 3 month that's interesting 3 months 3% $747 if you really want to go even longer you want to just put that $10,000 away from 5 years Alli currently offers 3.75% 5 years $10,000 after that 5 years estimated earning is going to be around $2,021 so yeah just a few calculation examples and they have this tool on their website we could just do some few calculations and there's another website I'll show you where you can kind of see the interest every month that I like to use the calculator site apy calculator so I have the same amount right here $10,000 at 450% apy for 12 months you see that total interest same as the Ally calculator $450 after that 12 months but on this website with this calculator it's going to break down the interest monthly as well so you can see how much interest you're acing monthly and you see it go up because guess what it's doing it's compounding you're not only making interest on that $10,000 you're making interest on that $10,000 plus the interest that was previously deposited and added to that $10,000 so right here after the first month you're not earning 4 50% on $10,000 you're earning 450% on $1,367 so instead of $36.75 of Interest you're going to earn $368 of Interest so yeah just little amounts but it creeps up you see towards the end of that month you're already up to $38 and of course the more money you have in an account the more interest is going to earn so and so forth and so forth so you see the interest compounding and increasing so that's why I like this website as well to look at you know projections and calculations and things but yeah those are some calculations on a certain amount in a high CD with allly you use their website use other websites do it on calculator yourself but good thing about a CD you'll know pretty much estimated earnings that you would get in the interest depending on the term length and the apy and one thing to notate about the high CDs with that lot is that there is an early withdrawal penalty so withdrawals before the maturity date are subject to penalties and partial withdrawals aren't allowed so you can't just pull out you know half of the amount that you put in the CD or 25% of it or anything like that it has to be the whole amount and if you do pull the whole amount out before the term length is over before the maturity day then there is an early withdrawal penalty are there exceptions and they State they'll wave the early withdrawal penalty if the depositor passes away or is judged legally incompetent so those are the only exceptions right there so if it doesn't fit in that situation then you would be hit with an early penalty fee and that penalty fee is going to depend on your term length of the CD so if it's less than 3 months you're going to get hit with a 30 days worth of Interest 3 months to 24 months 60 days you see it right here 25 months to to 36 months 90 days 37 months to 48 months 120 days 49 months or longer 150 days so basically the fee is going to be charging you the days of Interest the days loss of Interest that's going to be the early withdrawal penalty so the amount you'll see it once you you know go through with withdrawing your penalty how much you're going to get hit with that early penalty fee but it's going to depend on your term length of your CD and it's going to be basically the day loss of interest that is one of the main Cons with a high CD that's not a no penalty CD I'll tell you about those a little bit later in the video I'll talk about those accounts as well on my channel but yeah with a regular higho CD with Ali there is an early withdrawal penalty and one thing to notate after you add funds to your CD you can only pretty much do that once you can't continue adding funds to your high Y CD with allly once you open the account and fund your CD you can't add funds again until your CD matures so until that maturity day until it's pretty much the term is up with your CD that's the only time you can add more money to your CD so once you get ready to add a CD it's good to know how much money you're going to add to that CD you can't say okay going to add $5,000 this day and in a few weeks I'm going to add 10,000 next month I add 20 no you can't you can't do that once you open your CD you can only fund it once right there so you added your funds to your CD you sat back you earned that entrance for the 6 months the 9 months the year however long your term was and then the maturity date approaches the date of renewal or count closing e CD is approaching it's coming up what should you do very simple very easy process so you'll have a 10day grace period starting on your maturity day to do one or more of the following you can change the term so you can can keep your money in Alli Bank change the term to a different you know CD account you'll see the apy so you'll know you know still the same thing how much money you're going to get you you can do the calculation of knowing how much money you're going to get in at certain term length you choose a different term CD with Ali that's an option or you can make additional deposits or withdrawal funds so you can you know just keep the same term CD let it roll over automatically renew but add more money to it or you can withdraw funds from the CD and you know have certain amount there in the CD withdraw a certain amount from the CD let's say you want to withdraw you know half of it this or that or something like that or you can withdraw funds from the CD add money to it or withdraw from it or you can close the CD close it out completely not renew it anything like that move all the money from the CD to another bank account or to your saves account with Ali to your you know spending checking account with Ali or to an external bank account a totally different bank you know discover or Sofi Bank of America JP Morgan chases Wells Fargo wherever you can move all that money to a different bank account so if options right there when your CD matures you have options you don't have to renew it you don't have to close it you don't have to withdraw the funds you don't have to add to it you could choose whichever path you want to take with that money in that CD so yes that is the high Yol CD with Ally let's go over to the other CDs that Alli offers next up Ally Bank Raise Your Rate CD let's talk a little bit about the raise your rate CD so with the raise your rate CD which currently has two available terms 2 years at 3.60% apy and 4 years also at 3.60% apy with the rise your rate CD with Ali you start with that rate plus you have the opportunity to increase your rate once over the 2year term or twice over the four-year term if the rate goes up for your term and balance tier goes up on those CDs there's a few main things that stand out differ with the razor rate CD with Alli of course you see there's only a couple terms available only 2ear and a fouryear and the apy is lower than the high yield CDs with Ali because it has that little option of raising your rate so if the rate goes up with Ali let's say you open this account this month in September two years at 3.60% all right next month it goes up maybe 3.65% you're like eh no I won't do that I won raise that that's fine whatever and let's say in December it goes up to 450% 4% something like that something higher than 3.6% that's more noticeable then you have the option to raise your rate you can choose to increase your CD apy to that new rate that's higher than your previous amount now you can only do this once that's why I say if it goes up a little bit like 0.005% or 10% you may want to wait or maybe you don't maybe you say hey I'll take whatever is higher than what I have but just keep that in mind for a twoyear you can only do it once for a four year you can do it twice and now if you're wondering like how do I raise my rate like what what do I exactly need to do they have a section on here to tell you about that and Ally says they'll let you know when you can raise your rate by displaying a message at the top of your Account Details page and you can set up a custom rate Alert in online banking if you like if the current rate they offer for your term and balance tier is higher than your interest rate and you're eligible for a rate increase you can raise your rate in one of the following ways so you can log on to the online banking and raise your rate on the Account Details page you can do it yourself once you log on you'll see it on the Account Details page few clicks and boom you got the new rate or you can chat with them online have 247 customer service you can do the chat feature with them online talk to them that way get them to do it for you or you can call them at that 8772472559 and as you see right now current weight times estimated at 3 minutes you can call them and talk to them and get them to raise your rate for you so a few different options there that you can do and once they receive your request to raise your rate you'll get the highest rate that they offer for your term and balance tier that day and your new rate will go into effect the next business day and there's no fee associated with requesting a rate increase or obtaining a rate increase nothing like that there's no Initiation fee or monthly maintenance fee or anything like that no fees associated with it but yes you can raise your rate with the razor rate CD as it says and implies in the name and the razor rate CD has something the same features as the other CD accounts with Ali with the FDIC Insurance the no monthly maintenance fees the interest compounding daily that 05% loyalty reward if you renew the CD with Alli of course managing your CD account online through the mobile app or through the online website or your laptop or computer and they have a calculator here as well for the 2-year and 4-year 3.60% we'll just do a couple calculation examples here if you had $25,000 and that raise your rate CD for 4 years at 3.60% and you didn't raise it at all now this is if you didn't raise at all because we don't know what it could go up to if it goes up now the CD rates may not go up anymore so you won't be able to really raise your rate now if you had $25,000 in this city for 4 years then after four years your estimated earnings and interest going to be about $3,799 for 2 years pretty much cut that in half going to be about $1,832 40 so let's just give another calculation here example $10,000 $10,000 in this Razer rate CD with Alli for two years if the apy just stays at 3.60% after two years the estimated earnings is going to be about $732 n6 so add that to the your $10,000 and that's $1,732 196 and the razor rate CD also has early withdrawal penalty same as the high yield CDs with allly the same two exceptions with the depositor passing away or judge legally incompetent but the early withdrawal penalty there's two different terms so here are your early withdrawal penalties for the 2-year you're going to get charged 60 days of interest and for the 4-year it's going to be 20 days worth of Interest so it depends on your term length and the amount of money in the account and that's how they going to calculate the days worth of interest that they're going to charge you for the early withdrawal penalty and also with adding funds same as the high yield CD account with Alli for the razor rate CD you cannot continue to add funds to it at any moment you once you open the account you got to know pretty much how much money you're going to add to this CD and that's when you do that you're going to lock in that rate that high yield apy and also with that certain amount of money that you deposit into the CD so it cannot add funds to it once you open the CD you'll only be able to do it once it matures when the razor rate CD matures the same as the high yield CD as far as like your options of what you want to do with the money in your account you know you can you can renew the CD you can choose a different term you know of the razor rate CD if you want you can move do a two-year four year whatever other terms they offer or you can move it to a totally different CD with Alli one of the other high yield CDs you know 6 month 9 month or the no penalty CD you could do that or you can add money to the CD or or you can withdraw money from the CD or you can close the CD out move the money over to a different bank account with Alli or outside of Alli and close the CD out so you have the same options with the other CD accounts with Ally as the Razer rate CD so yes that is the razor rate CD let's now talk about the next CD the Ally offers the no Ally Bank No Penalty CD penalty CD currently they only have one term available of the no penalty CD available and that is 11 months at 4% apy same as the other CD accounts with Ali as far as the main features with it you know FDIC and sure no monthly maintenance fees interest compounding daily availability to manage your CD online opening it in the name of the trust so forth so forth same main features as I stated in the main features and common features section of the video what stands out with the no penalty CD with Ali course is that there is no penalty to withdraw the CD no early penalty fee and there's not a lot of banks that offer no penalty CDs they only have one other bank to compare it with on here but there are more than these two banks that offer no penalty CDs I do videos on the top five no pen penalty CDs ranked by apy as well not every other month sometimes I kind of skip a few months with that because there's not as much movement with no penalty CDs out there there's not as many of them available out there but for instance we'll do a couple of calculations here $10,000 in 11 months at 4% apy with Ali bank it's going to earn you around $366 6 of estimated earnings and interest so let's say you have that $25,000 in this Ali no penalty CD account for 4% at $225,000 going to earn you around $915 2016 so a couple of calculations here and of course you could do the same thing with that website I showed you earlier The calculator site to break it down even more so as you see here the ending amount is the same around $ 91516 $25,000 in this account 4% for 11 months you see the interest increasing each month because guess what it's doing you know what that lovely word compounding so yes you see the interest compounding for that 11 months on that $25,000 which is nice so yeah few different things with the no penalty CD of course deter links not as many available so there's only one apy so yeah that's one of the main difference with the high yield CD with Ali there's different you know term links right there and main thing of course with the no penalty CD with Alli you will not be charged a penalty for early withdrawal so you can withdraw the full balance in interest anytime after the first 6 days following the date that you funded the account so after the first six days of opening the account you can withdraw the full amount and any interest earned no penalty no strings attached no fees no hidden surprises nothing like that and same thing with the other accounts with the other CD accounts with Alli you cannot add funds to the no penalty CD at any time once you open the CD with that certain amount that you open it with that's it for the CD you can only change it when it comes time for the CD term to be up and whether or not you want to renew it you know move it to another CD add money to it close it out withdraw it same situation with it once the CD matures if you wait on it to mature you can do that with a no penalty CD you don't have to withdraw it early you can wait until the term length is up to change things with the CD so it's all up to you a little bit more flexibility with the no penalty CD all right that's Outro it everybody thanks for tuning in if you're ready to boost your savings with a smart CD strategy Ali Bank could be a great choice don't forget to hit that like button if you found this video helpful and subscribe for more financial education tips and information on growing your money if you got any questions or want to share your own experience with Ali Bank drop a comment down below I like hearing from you all and until next time keep moving and progressing towards your financial goals take care