When it comes to savings, it’s always a good idea to try and diversify the portfolio a little. This means that the ideal savings portfolio of a client should include emergency savings to cover the expenses for a certain period, rainy day savings, and of course, savings towards specific goals and events. With this in mind, the Ally Bank Raise Your Rate CD falls right in the middle of the savings journey. Customers who are comfortable not to have access to their funds for a fixed period of time will find this account to match their needs.
When Is A Good Time To Open A CD Account?
Customers who wish to open a CD account will need to prepare themselves for it financially, as they won’t have access to the funds for the duration of the term. A CD account is suitable when the client:
- Can afford to part with their funds for a longer term. This can be a couple of months or sometimes even a couple of years.
- Has no need of the funds in the near future. This means they have separate savings for emergency expenses.
- Understands that early redemption of the savings could lead to penalty charges.
- Wishes to save a lump sum of funds without desiring to add to the savings for the duration of the term.
- Wants to have more control of the outcome of the savings as there is a fixed term and a fixed rate.
Have a look at some other CD accounts from Ally Bank .
Why the Ally Bank Raise Your Rate CD is a Good Choice
This investment is a great option for those who are concerned that their CDs might not benefit from higher future investment rates. It also provides two different terms to allow customers a bit more flexibility.
- Customers can opt for a two-year CD which affords them one opportunity to increase their interest rate during the term of the investment.
- There is also a four-year CD which gives them two opportunities to increase their interest rates during the term of the investment.
- With this account, customers will experience the effect of compound interest as the interest is calculated daily.
- Also, customers can rest assured that the rates offered are competitive.
- Customers who are concerned about the safety of their funds will benefit from FDIC insurance. This insurance protects deposits at certain institutions up to a specified limit.
- The Ally Bank Ten Day Best Rate Guarantee allows customers to benefit from the best rate possible.
- Finally, the account also provides customers with the means to protect their legacy as it is suitable for trusts.
Ally Bank’s Interesting History
Ally Bank was the first of its kind to offer automobile finance. It also provided customers with bespoke finance solutions to suit the vehicle and their needs. The bank was formed in 1919 and was part of GM, which explains its finance roots. In 1924, the bank financed its 4 millionth vehicle. This service provided customers with finance solutions during two of the most critical periods in American history, the Great Depression and WWI.
GMAC was an industry leader where motor insurance was concerned when it formed Motors Insurance Corporation (MIC). This was in 1939 and by 1941, WWII was taking its toll on the Allied forces. GM supplied the forces with submarine engines, airplanes, trucks, and tanks. The bank also financed locomotives during this period to help the struggling railways to survive.
From the fifties, the American economy started focusing more on the manufacturing operations. Modern appliances were the rage and every household needed these new items to keep up with the times. GMAC introduced finance for household appliances during this period.
A strong focus was given to the insurance side of things in the sixties and seventies. In the eighties, the bank added mortgage finance to its list of products. It was just before the turn of the century that the bank also became involved in corporate finance.
The 2000s brought about transformation and in 2009 the bank changed its name to Ally Bank. In 2010 Ally Financial was formed and Ally Bank is a subsidiary of this company. This allows the group to diversify its portfolio and manage its risks. read here for a full review of Ally Bank,.
Restrictions on the Ally Bank Raise Your Rate CD
This account is the ideal savings vehicle for those who wish to save their funds for a long period of time, however, it is not ideal for those who don’t have other savings. This is because customers are charged a hefty penalty should they wish to access the funds before the allotted maturity date.
There are two investment types, and customers need to ensure they choose the right option as there is a two-year and a four-year Ally Bank Raise Your Rate CD.
Although the interest rates are fairly competitive, there is some fierce competition in the market which could see this investment losing ground to a competitor. This is for both the two-year and the four-year investment.
Furthermore, once the option/s to increase the rate has been used up, customers stand the chance to miss out on higher rates.
Finally, there are shorter investment terms that could give this product a run as it offers both rate and flexibility. The appeal, therefore, is only that the funds are tied up for the term to avoid unnecessary spending.
How To Open An Ally Bank Raise Your Rate CD
The customer chooses the option that describes them best, whether they are a new or existing customer, and whether they’ve started an application or not.
This takes a customer to the product screen, where they will choose the Ally Bank Raise Your Rate CD among the options listed there. This is also where customers will note the amount they wish to deposit.
Customers will choose whether the account is an Individual or Joint Account. This screen will create a pop-up where customers will enter all relevant information.
This screen allows customers to create their account.
Customers will decide which method they will use to make their opening deposit.
This is the final step in the account and takes customers to the online banking screen. Once the customer completes all the relevant information, the account is ready for use. Have a look to see how the Barclays Online Savings rated.
The entire process should only take 10 minutes and guests can transact as soon as their deposit reflects. Customers can also decide whether to open the account for a Trust or UGMA. This allows the to use the account to preserve their legacy.
What We Like About the Ally Bank Raise Your Rate CD
This account provides that needed fixed deposit scenario for those who wish to have their savings separate from other funds. It also allows customers to experience the effect of compound interest and also competitive interest rates.
The account is opened online which means it is simple and convenient. There is no reason for customers to go into a branch. Also, the account offers 24/7 and customers can speak to a real person. Furthermore, this investment alleviates the stress of locking funds into a rate when there is the potential of a better future rate. Finally, there is no minimum deposit required for the account, which makes it an affordable option for those who wish to start small.
What We Don’t Like About the Ally Bank Raise Your Rate CD
There are no physical branches to go to, which means customers are completely reliant on solving issues or complaints on the telephone or online. This could pose a problem for those who do not understand the product easily. The online account opening process is very simple, however, can be a challenge for those who are not adept with technology.
Furthermore, the investment rates are fairly competitive, however, there are savings accounts with shorter terms that provide higher rates. Also, the investment rates offered at some competitors may make their product more attractive. Those who don't wish to be tied up in their investments may find the Ally Bank Online Savings Account a viable alternative.
Critical Reviews Rating of the Ally Bank Raise Your Rate CD – 9 of 10
The biggest contributor to this rating is the option to up the rate during the term. This is a massive consideration for potential customers who have the means to invest, however, don’t want to be tied to the rate. What is also a nice consideration is the fact that those who commit to a four-year term will have two options to increase their rate. This places this investment into a category of its own.
The actual rate is the only aspect that is bringing this investment down. The rate offered on short-term accounts are not much different to this account, which may persuade customers to rather take up those products. Furthermore, the rate offered by competitors also offer some steep competition and sometimes far better rates.