Updated April 12, 2024

Ally Bank CD Rates

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Ally Bank CD accounts offer high APYs and require no minimum deposit. But what is the catch? Learn more about Ally CD rates in this review.

Ally Bank offers more CD options than many other banks.

In addition to term CDs, they have a unique no-penalty CD where you can withdraw your money without fees. And CDs that let you "bump up" your interest rate.

Here are the CDs you can open at Ally Bank and their rates.

What CDs Are Available at Ally Bank?

Ally Bank offers several flexible CD options that you can align with your savings goal and personal needs.

  • High Yield CD: This CD has 7 terms, ranging from 3 months to 5 years. You get a fixed rate for the entire time.

  • No Penalty CD: Most flexible CD from Ally Bank. It lets you withdraw your money early without penalty, and you get to keep all your earned interest. It's a good option if you're not sure about locking up your funds.

  • Raise Your Rate CD: This CD lets you raise your rate if APYs happen to go up during your term. You can raise it once for the 2-year term, or twice for the 4-year term.

  • Special Promotion CD: Ally Bank occasionally offers special promotion CDs with a high interest rate for a limited period of time.

Pros & Cons:

  • No monthly fee
  • No minimum deposit
  • A variety of CDs not offered by most other banks
  • Higher interest rates than traditional banks
  • No physical branches
  • Support can be slow

Read on to find out their rates.

Ally Bank CD Rates

Ally Bank gives a 0.05% Loyalty Reward when you renew your CD to any of their other CDs.[1]

Which bank is best to open a CD?
Here are some of the top CDs available now:

Fees and Penalties

With a CD, you must commit your money for the entire term. If you withdraw early, you'll be charged an early withdrawal penalty. Ally Bank's withdrawal charges are:

High Yield CD penalties:

  • 24 months or less - 60 days of interest
  • 25 months to 36 months - 90 days of interest
  • 37 months to 48 months - 120 days of interest
  • 48 months or longer - 150 days of interest

Raise Your Rate CD penalties:

  • 2-year term - 60 days of interest
  • 4-year term - 120 days of interest

Before locking in your money in a CD account, make sure you really won't need that money for the term of the CD. Otherwise, you would pay steep penalties.

If you're not sure about tying up your money, you can open a No Penalty CD instead. It lets you withdraw with no penalties, starting from 6 days after funding the account.

Compare CD Rates

Are Ally Bank CDs Safe?

Ally Bank is a member of Federal Deposit Insurance Corporation (FDIC #57803). Even though it's an online-only bank, it's subject to the same rules and regulations as traditional brick-and-mortar banks.

Ally Bank CDs are FDIC insured up to $250,000 per depositor for each qualifying account ownership category. This means if the bank fails, the government protects your funds up to $250,000.

You can check your estimated insurance coverage with FDIC's Electronic Deposit Insurance Calculator.

Ally Bank CDs are non-callable. That means they do not have the right to terminate the CD when interest rates fall. With this, you can feel safe that your money will continue earning at its rate the entire term.

Ready to open a CD with Ally Bank? Here's how:

How to Open a CD with Ally Bank

There are 3 ways you can open a CD with Ally:

  1. Apply online at Ally Bank's website.
  2. Via phone call through 1-877-247-2559
  3. Download the application form and mail to:
    Ally Bank, PO Box 951, Horsham, PA 19044

To open an account, Ally Bank collects the following information:

  • Social Security Number or Tax Identification Number
  • U.S. residential street address
  • Legal name
  • Birth date

They might also ask for other forms of ID, like your driver's license. You need to be at least 18 years old to open a CD account.

Once you've opened your CD account, you can proceed to funding.

How to Fund an Ally Bank CD

You can only fund your CD once upon opening. There are 3 different ways you can fund your CD with Ally Bank:

  1. Transfer money from an Ally Bank account or from another bank.
  2. Send a check via mail.
  3. Send a wire transfer.

There is no minimum deposit required to open an Ally Bank CD. But the account must be funded within 60 days of opening. Otherwise, Ally Bank will close the CD account.

What to Consider Before Opening a CD account

When you open a CD account, it usually means you're locking away your money for the entire term of the CD. So before you do so, here are a couple of things to keep in mind.

1. Have an emergency fund:
Since you can't touch the money in a CD, make sure you have an emergency fund in a regular savings account. It's best to have at least three to six months' worth of your living expenses.

That's your safety net whenever you need money immediately. It's important to make sure you have a sustainable financial footing before putting your funds in a CD.

2. Commit to term duration:
Are you sure you won't need the money anytime soon? Unless it's specifically a no-penalty CD, withdrawing funds before maturity or outside of the grace period can be painful.

If you think you'd end up needing your money beforehand, it's better to open a high yield savings account instead.

Should You Open a CD with Ally Bank?

If you're not sure whether you should get an Ally Bank CD, usually there's just one thing to consider. That is, are you okay with banking purely online? Ally Bank is an online bank. So most of your transactions, including opening a CD, will be online.

Some people prefer traditional banks with physical locations. If you prefer banking in person, then getting a CD with Ally might not be the best option.

But, if online banking is not a problem for you, it can be easy to open a CD with Ally. Because everything is online, you can manage your account anytime and anywhere. Plus, online banks can offer higher CD rates due to their lower overhead costs.

Figure out how you prefer to do your banking, and that should let you decide whether or not to open a CD with Ally Bank.

Other Ally Bank Accounts

Check out other banking accounts Ally Bank offers:

Important Note: A limit of 6 withdrawals per statement cycle is applied to savings accounts.

Ally Bank is a full-service digital bank with no physical location, but it does have 24/7 customer service.

Frequently Asked Questions

Does Ally Bank give higher interest CD rates?
Ally Bank gives higher interest rates compared to traditional banks. In addition, interest is compounded daily.

How can I increase my CD rate with Ally Bank?
There are many ways you can increase your CD rate with Ally Bank.

If you open a Raise Your Rate CD, you can raise the interest rate once in a 2-year term or twice in a 4-year term.

Ally has a Ten Day Best Rate Guarantee, which guarantees the best APY available if you fund your CD within 10 days of opening.[2] You'll get a better rate if APYs happen to go up during that time.

With Loyalty Reward, renewing your CD also adds 0.05% to your new interest rate.

Can I have multiple CDs with Ally Bank?
You can have up to 40 CDs with Ally Bank.[3] This is great if you are planning to build a CD ladder. It's a saving strategy that gives you more access to your money because the CDs are scheduled at different maturity dates.

How are CDs taxed?
For CDs, you will pay an income tax for the interest you've earned each year. The bank will give you a 1099-INT statement and you will need to report it on your tax return.[4]

A way to get a tax advantage is to open a CD as an IRA. Ally Bank's High Yield CD and Raise Your Rate CD are available as Roth, Traditional, and SEP IRAs.

Bottom Line

Ally Bank CDs are good for starters; it does not require a minimum deposit and has no maintenance fee.

If you are still testing the waters, consider No Penalty CDs. It lets you withdraw your funds early if you need it.

References

Discover Bank
Member FDIC

Online Savings Account - Earn 4.25% APY

  • No fees
  • No minimum opening deposit
  • No minimum balance required
Chase
Member FDIC

Chase Total Checking® - $300 Bonus

Expires 7/24/2024
  • New Chase checking customers enjoy a $300 bonus when you open a Chase Total Checking® account with qualifying activities
  • Access to more than 15,000 Chase ATMs and more than 4,700 branches
  • Chase Mobile® app - Manage your accounts, deposit checks, transfer money and more -- all from your device.
  • JPMorgan Chase Bank, N.A. Member FDIC
  • Open your account online now
  • Available online nationwide except in Alaska, Hawaii and Puerto Rico. For branch locations, visit locator.chase.com.
  • Chase Overdraft Assist℠ - no overdraft fees if you're overdrawn by $50 or less at the end of the business day or if you're overdrawn by more than $50 and bring your account balance to overdrawn by $50 or less at the end of the next business day*
Bank of America
Member FDIC

Bank of America Advantage Banking - $200 Bonus Offer

Expires 5/31/2024
  • The $200 bonus offer is an online only offer and must be opened through the Bank of America promotional page.
  • The offer is for new checking customers only.
  • Offer expires 5/31/2024.
  • To qualify, open a Bank of America Advantage Banking account through the promotional page and set up and receive qualifying direct deposits totaling $2,000 or more into that new account within 90 days of opening.
  • Bank of America will attempt to pay bonus within 60 days.
  • Additional terms and conditions apply. See offer page for more details.
  • Bank of America, N.A. Member FDIC.
CIT Bank
Member FDIC

CIT Bank Platinum Savings - 5.00% APY

  • 5.00% APY with a balance of $5,000 or more
  • 0.25% APY with a balance of less than $5,000
  • $100 minimum opening deposit
  • No monthly maintenance fee
  • Member FDIC
Axos Bank
Member FDIC

Rewards Checking - Up to 3.30% APY

Expires 6/30/2024
  • Use the promo code AXOS300 when you apply for a Rewards Checking account by June 30th, 2024. Then have qualifying direct deposits to earn up to a $300 bonus!†
  • Build your own APY with up to 3.30% APY*
  • Zero monthly maintenance fees
  • Zero overdraft or NSF fees
  • Zero minimum monthly balance reqs
  • No initial deposit requirement
  • Unlimited domestic ATM fee reimbursements
  • Online debit card management
  • Simple, 3-step process for direct deposit

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Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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