Ally Bank CD Rates

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:

Read on to find out their rates.

Ally Bank CD Rates

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

Member FDIC

Certificate of Deposit

• 4.70% APY for 12-month term
• 4.40% APY for 18-month term
• 3.75% APY for 36-month term
• 3.75% APY for 5-year term

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Member FDIC

CIT Bank No Penalty CD - 3.50% APY

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• 3.50% APY
• Option to withdraw full balance and interest after 7 days of CD funding date
• $1,000 minimum to open an account
• 11 months
• No monthly maintenance fee
• Member FDIC

Member FDIC

CIT Bank Term CDs - Up to 3.50% APY

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• Up to 3.50% APY
• $1,000 minimum opening deposit
• No monthly maintenance fee
• Member FDIC

Term	CD Rates
6 Month	3.00% APY
1 Year	0.30% APY
13 Month	3.50% APY
18 Month	3.00% APY
2 Year	0.40% APY
3 Year	0.40% APY
4 Year	0.50% APY
5 Year	0.50% APY

Member FDIC

CD Rates - Up to 5.05% APY

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• $500 minimum opening deposit
• FDIC insured

Term	CD Rates
6 Month	5.05% APY
12 Month	4.50% APY
24 Month	4.50% APY
36 Month	4.40% APY
60 Month	4.30% APY

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.

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.

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]

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