The Fine Print

Ally Bank changes security procedures

2011-08-04T12:52:00.000-07:00

You know how it goes the when calling the bank, you have to answer "security" questions before you are able to get information about your account. I normally don't mind going through the process of answering the questions which to me seem to be common knowledge. Name, last 4 of social security number, date of birth, etc. The procedure is different for every financial institution. Some like ING Direct (who was recently brought by Captial One Bank) only have you enter a personal PIN code instead of answering questions. Credit Unions I have found keep a very simple approach and usually only confirm account number and mother maiden name.

Recently I discovered that Ally Bank had decided to change the security procedures from answering four security questions to include a fifth question for verification. While it may not seem like allot to answer one more question, the question does come to mind how much is too much especially when all I need is to check my balance. After passing the test to access my account I happen to inquire about what would have happen if I had gotten a question wrong? The representative of the was kind enough to explain that depending on which question I missed my account would have been "locked" down preventing me from accessing the account at all. That would block all transactions as well. I would then have to wait "24 to 48 hours" for someone to contact me to lift the restrictions. I sure would hate to be the person waiting to get access to my money due to my bank not being able to respond quick enough.

While I do believe in the security of my account and information, I wonder where the line is crossed between my security and the convenience to the customer?

Ally Bank offers loyalty bouns again

2010-02-07T17:30:00.000-08:00

Ally bank started an campaign of advertisements though email and phone calls that will allow existing customers the option of adding an additional .25% or .50% to a maturing CD in the month of February. This offer will not be sent to everyone. However just as in January if a customer mentions the loyalty bonus then Ally will give the bonus to you. So be sure to ask for your pony.

Ally Bank new bill payment system full of suprises

2010-01-31T20:11:00.000-08:00

With the introduction of the new Interest Checking account Ally Bank put into place a bill pay system backed by Yodlee. Yodlee which is based out of Bangalore India, boast affiliation with other financial institution such as ING Direct, and Mint.com. While other more stable and established bill pay systems are out their Ally has seem to chosen a more features orientated bill pay with more "bugs".

While I have a checking account with Ally I really had no intentions of using the account as my primary account. I am quite happy with my local credit union to handle the bulk of you financial needs. I wanted to see how Ally's bill pay compared to my current bill pay. I was quite surprised at the look and feel of the bill pay system. Yodlee was integrated directly into the Ally website. No separate window had to pop up to log into the bill pay side. Navigation was pretty straight forward and after a few moments I was adding a payee for their ebill option. Also to my surprise I was able to view my actual bill for my payee, from the Ally website. I started to think maybe I could switch some of my bills to this system.

So whats the problem? A few days after setting up my payee I received an email stating my payment was sent. I in no way shape or form authorized a payment to be paid. So imagine my surprise when I received an email notification telling me that my payment was successfully completed!

I logged into my account to what damage was done. Again to my surprise my account was untouched. I also logged into my biller website to see that the bill had not been paid. I called up a representative to inform Ally of their error. The representative was very nice and looked into the issue right away. He told me that according to their system the payment was sent and that their was nothing they could do to stop the payment. The representative said he would send a request to their bill pay team to correct the problem. I was assured that I would not held responsible for an bank error. This is all well and good as long as the mistake doesn't overdraw my account.

It has been a couple of days now and I have received another email that said my payment was rejected. My account still shows the balance it is suppose to and no money has been received by payee. So far all is well, but I for one am not impressed by the system and will be deleting my payees as soon as can.

How to get a 12 month 2.62 APY CD with Ally Bank

2010-01-24T19:50:00.000-08:00

Recently Ally bank changed their policy in regards to the pentaly you receive when closing out a CD. Before closing a CD early meant taking a penalty of 90 days worth of interest for 12 months or less, and 180 days of interest for a CD longer than 12 months. Today I read on Ally Banks website that their policy for all CD's is now a penalty of 60 days of interest. This makes for interesting possibility for higher rates on shorter terms. You ask yourself how can this be, the rates are set by the bank. Let me show you the math.

As of today Ally Bank website posted an interest rate of 1.74% APY for a 12 month CD. If we make a deposit of $10,000 in 12 month that CD would gain $174.50 in interest. Now lets look at Ally Bank CD rates for the 60 month CD. Right now Ally Bank is paying 3.14% APY for their 5 year CD. If you closed the 5 year CD after one year you would incur a penalty of 60 day worth of interest or $51.75. However you would still make a profit of $263.09 or in effect an APY of 2.62%. The same time period, $88.59 richer.

Ally Bank 12 month CD
Initial deposit $10,000.00
Length of CD 1 year (12 months)
Interest rate 1.730% compound daily
Total annual yield 1.745%
Annual Percentage Yield (APY) 1.745%
Ending balance $10,174.50

Ally Bank 5 year CD after 12 months
Initial deposit $10,000.00
Length of CD 1 year (12 months)
Interest rate 3.100% compound daily
Total annual yield 3.148%
Annual Percentage Yield (APY) 3.148%
Ending balance $10,314.84

Penalty is calculated as follow
Current Balance in account multiplied by interest rate, divided by 365 days, and then multiplied by penalty time.
10,000 x 0.031 /365 x 60= 51.75

5 year CD after 1 year = $10,314.84
60 day penalty = $51.75
5 year CD after penalty $10263.09 or 2.595%, APR 2.629% APY
Difference you would earn from the 12 month CD = $88.59

Happy investing

Act Fast Ally Bank customers.

2010-01-17T14:51:00.000-08:00

No the Bank is not going to fail. But what they are offering is some good rates if you are an existing customer. Here is the details.

I have a CD account with Ally Bank formerly know as GMAC Bank. My CD matured this month but I wasn't going to renew it because I could get a better rate with a local Credit Union. When I call to close the the account the representative offered me what Ally Bank calls a Loyalty Bonus. The Loyalty Bonus is a .50% bump on the rate at the time of maturity. What does this mean? Well if your 12 month CD matured today you would get an interest rate of 1.74% APY. With the Loyalty Bonus of .50% that would bring your CD to an interest rate of 2.24% APY.

So whats the catch? I asked if I could get this Loyalty Bonus for my other CD's. The representative said that this offer would only be available until the end of January, and that customers would have to ASK for it. I think this goes against the Ally Bank Talk Straight policy. After all just look at one of there commercials. Be sure to ask for your pony.