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Ally Financial is a bank known for operating entirely online. The bank offers a wide range of CD types, and it’s praised for paying competitive rates and providing customers with an easy-to-use online interface.
With Ally, you can choose from three types of CDs: High Yield CDs, Raise Your Rate CDs, and No Penalty CDs. Each type offers competitive rates, and the one you choose will likely depend on your banking needs.
Ally is offering a 13-month CD and 20-month for a limited time. If you open Ally 13-Month Select Certificate of Deposit – Product Name Only by June 13, 2023, you’ll earn Ally 13-Month Select CD – APY APY, and it will automatically renew as a 1-year CD at the end of the term. If you open the Ally 20-Month Select CD – Product Name Only by April 11, 2023, you’ll earn Ally 20-Month Select CD – APY APY and it will automatically renew as an 18-month CD.
Ally currently ranks as our top pick for the best bank overall for opening a CD, but we know “best” can be different for different people. Read on to find out whether an Ally CD is the best match for you.
Should you open an Ally CD?
If you’re searching for a CD with a competitive APY, Ally is a good option. Its rates are relatively high, and if you choose a Raise Your Rate CD, you may be able to increase the APY during its term.
Ally is also a solid choice if you want the option to withdraw money from your CD before it reaches maturity. Ideally, you would leave the money in your CD until the end of the term, but it can be nice to know you have the option to withdraw your funds early without paying too much in fees.
The bank also offers a No Penalty CD, which doesn’t charge any fees if you withdraw your money early. Not all banks offer no-penalty CDs, so if this type of account appeals to you, Ally could be a good fit. No Penalty CDs still offer competitive rates, but in exchange for flexibility, you’ll receive a slightly lower rate than if you chose a different type.
Even if you choose a High Yield or Raise Your Rate CD rather than a No Penalty CD, withdrawing early will come at a lower cost than it does with many competitors.
Ally may appeal to people who can’t deposit much money right off the bat. Many institutions require you to put down an opening deposit of at least $500 to open a CD, but Ally lets you open an account with no money upfront. This makes a CD accessible for people who don’t have hundreds of dollars from the get-go.
Finally, you might like Ally if you want to do all your banking with one institution. You can also open a high-yield savings account, checking account, and money market account with Ally.
Pros of opening a CD with Ally
You can choose from 3 types of CDs, or 11 CDs total
Ally offers three types of CDs: High Yield CDs, Raise Your Rate CDs, and No Penalty CDs (more on their specific features below). This makes it easy to find a CD that satisfies your preferences.
You can open a High Yield CD (Member FDIC) for 3 months, 6 months, 9 months, 1 year, 15 months, 18 months, 3 years, or 5 years. High Yield CDs have fixed interest rates, so your APY won’t increase or decrease throughout the term. If you withdraw from the CD before the term ends, you’ll pay a penalty.Raise Your Rate CDs (Member FDIC) come with 2-year or 4-year terms. If Ally’s rates go up before your CD term ends, you can request to increase your rate once with a 2-year term or twice with a 4-year term. Like High Yield CDs, Raise Your Rate CDs require you to pay a penalty if you withdraw funds before the term ends.All No Penalty CDs (Member FDIC) come with 11-month terms. No Penalty CDs lock in your rate, just like High Yield CDs. However, you won’t pay a penalty if you withdraw early.
Ally offers competitive CD interest rates
Ally CD rates are higher than many competing banks’ rates. High Yield CD rates range from Ally High Yield Certificate of Deposit, depending on the length of your term.
Both 2-year and 4-year Ally Raise Your Rate CD pay Ally Raise Your Rate CD APY. You may increase your rate once during the 2-year period or twice during the 4-year period.
No Penalty CDs pay Ally No Penalty CD APY.
CD rates often fluctuate along with the federal funds rate, so we will keep updating Ally rates as necessary.
You’ll pay less to withdraw funds early than you would with many banks
Unless you have a no-penalty CD with an institution, you’ll be charged a fee if you withdraw from a CD before the term is over. Some banks charge the same amount no matter how long the term of your CD may be, while others (like Ally) charge more or less depending on the length of your term.
Ally’s penalties for early withdrawals are as follows:
60 days interest penalty for a CD term of 24 months or less90 days interest penalty for a CD term of 25 months to 36 months120 days interest penalty for a CD term of 37 months to 48 months150 days interest penalty for a CD term of 49 months or more
Ally’s fees for early withdrawals are lower than many competing banks’ early withdrawal penalties. Ally’s 150-day interest fee is less than some banks’ penalties for all early withdrawals.
You don’t need any money to get started
There’s no required opening deposit for any Ally CDs, but you won’t earn interest until you put some money into the account. You also don’t have to maintain a minimum balance to avoid fees or to earn interest. Many banks require opening deposits of at least $500 to open a CD, but Ally makes it easy for people with less money to start saving.
However, if you open a No Penalty CD with Ally, you’ll earn more interest if you put down an initial deposit of at least $5,000, and even more if you put down $25,000.
You have access to 24/7 customer service
Ally customer support is available at all times. You can call a representative or chat with a real person online or through your app.
You can set up other banking accounts with Ally
Ally also provides checking, high-yield savings, and money market accounts. This bank is convenient for people who want to do all their banking with one institution.
Its mobile app is easy to use
Ally’s app has received positive reviews for being useful and simple to navigate, and it has features many other banking apps lack. You can use your app to do everything from deposit a check to locate the closest in-network ATM.
Cons of opening a CD with Ally
There are no physical locations
If being able to walk into your bank and speak with an employee is an important part of the banking experience for you, then Ally may not be the best fit. There are no physical locations, so you’ll have to do all your banking online, through the app, or over the phone.
You may find a higher APY elsewhere
Ally CDs come with competitive interest rates, but depending on which CD you want, you may be able to find banks that offer slightly higher rates.
Ally CD features
Ally offers three types of CDs: High Yield CDs, Raise Your Rate CDs, and No Penalty CDs. You won’t pay a monthly service fee for any of these CDs, and you don’t need a minimum opening deposit or minimum account balance to maintain your account.
Ally High Yield Certificate of Deposit
When you open a High Yield CD, the rate you receive upon opening is fixed. If you withdraw from the CD before the term is up, you’ll pay a penalty. The amount you pay depends on how long you’ve had the account.
The High Yield CD term lengths and rates are as follows:
3 months: Ally 3 Month High Yield Certificate of Deposit – APY APY6 months: Ally 6 Month High Yield Certificate of Deposit – APY APY9 months: Ally 9 Month High Yield Certificate of Deposit – APY APY1 year: Ally 12 Month High Yield Certificate of Deposit – APY APY18 months: Ally 18 Month High Yield Certificate of Deposit – APY APY3 years: Ally 3 Year High Yield Certificate of Deposit – APY APY5 years: Ally 5 Year High Yield Certificate of Deposit – APY APY
If you choose a High Yield CD and withdraw from the account before your term ends, you’ll face the following penalties:
60 days interest penalty for a CD term of 24 months or less90 days interest penalty for a CD term of 25 months to 36 months120 days interest penalty for a CD term of 37 months to 48 months150 days interest penalty for a CD term of 49 months or more
Ally Raise Your Rate CD
When you open a Raise Your Rate CD, you have the option to increase your rate during the term if Ally’s rates go up. As with High Yield CDs, you’ll pay a fee if you withdraw funds early. Here are the Raise Your Rate terms and current rates:
2 years: Ally Raise Your Rate CD APY. You may increase your rate once during the two-year period.4 years: Ally Raise Your Rate CD APY. You may increase your rate twice during the four-year period.
If you choose a Raise Your Rate CD and withdraw from the account before your term ends, you’ll face the following penalties:
60 days interest penalty for a CD term of 24 months or less90 days interest penalty for a CD term of 25 months to 36 months120 days interest penalty for a CD term of 37 months to 48 months150 days interest penalty for a CD term of 49 months or more
No Penalty CDs
If you open a No Penalty CD and withdraw from the account before the term ends, you won’t have to pay an early withdrawal fee. Ally No Penalty CDs come with an 11-month term and pay Ally No Penalty CD APY.
Ally vs. CIT Bank
Ally doesn’t require an opening deposit, but CIT calls for a minimum initial deposit of $1,000. CIT also charges higher penalties if you withdraw from your account before it matures.
Ally and CIT Bank both offer a wide range of CD types. The best choice for you may ultimately depend on the term you choose.
Ally vs. Discover
While Ally is ideal for savers who don’t have much money upfront, Discover requires an opening deposit of Discover CD.
If you can swing the Discover CD deposit, your choice will likely come down to what you want out of a CD.
Discover offers high-yield CDs with longer terms than Ally does, all the way up to 10 years. However, it doesn’t have CDs that allow you to raise your rate, and there aren’t any no-penalty CDs.
Ally vs. Marcus by Goldman Sachs
Ally doesn’t require an opening deposit or a minimum account balance. If you open a CD with Marcus by Goldman Sachs, you must make an initial deposit of at least $500.
Ally’s early withdrawal penalties are more affordable than Marcus’ penalties. However, both offer no-penalty CDs. Ally only has 11-month No Penalty CDs, and your rate is determined by how your balance. Marcus gives you the option to open a 7-month, 11-month, or 13-month no-penalty CD, and each comes with a different rate.
See Insider’s list of the best CD rates »