Ally No Penalty CD

Ally Bank's No Penalty CD offers a competitive APY without early withdrawal penalties. Learn more about this CD here.

Does a high-yield CD with no early withdrawal penalties exist? Ally Bank's No Penalty CD is exactly that.

Let's dive into the details of this CD, its term, and if there are any hidden fees. At the end, see if a no penalty CD is what you need.

What Is Ally No Penalty CD?

Ally Bank's No Penalty CD is an 11-month CD with a fixed 3.90% APY. This is a competitive rate, especially since you can withdraw your money at any time without incurring any fees or penalties.

You can withdraw your money 6 days after opening your CD, without a long lock-in period. There's also no minimum deposit to open it, and no monthly fees. You get all the benefits of a CD with added flexibility.^[1]

How Much Can You Earn?

If you had $1,000 in your No Penalty CD, with the 3.90% APY, you'll earn around $36 after 11 months. Basically, the bigger your initial deposit is, the higher your interest earnings will be.

Use this CD calculator to see how much you can get with different deposit amounts.

If you renew your CD with Ally, you'll earn a Loyalty Reward, which adds 0.05% to your renewed CD's APY. Plus, with Ally's Ten Day Best Rate Guarantee, you'll secure the best rate available if you fund your CD within 10 days of opening the account.^[3]

Ally No Penalty CD Pros & Cons

Still undecided whether or not to get this CD? Here's a quick overview of its perks and pitfalls to help you.

Pros

• No early withdrawal penalties
  
• Competitive 3.90% APY
  
• No minimum deposit
  
• No monthly fees
  
• Loyalty Reward rate when you renew
  
• FDIC-insured

Cons

• Only available as an 11-month term
  
• Cannot add more funds
  
• No physical branches

Fees to Look Out For

Ally's No Penalty CD has no hidden fees. By its name, it has no early withdrawal penalties. Plus, it has no minimum deposit or monthly maintenance fees.^[4]

You can rest easy that you won't be charged for virtually anything.

Should You Get a No Penalty CD from Ally?

Deciding whether to open this account depends on your financial needs. If you're looking to earn a solid APY while keeping your money locked for a set period, Ally Bank's No Penalty CD offers a good option with an 11-month term and a 3.90% APY.

If you need easy access to your money, this CD is still a decent choice since it has no early withdrawal penalties. The downside is that you'll have to close the CD when you withdraw funds.

If you want more term length options, you might need to check other no-penalty CDs since Ally only offers an 11-month term.

Also, for more flexibility, consider a high-yield savings account. It provides a good rate, allows you to deposit money anytime, and enables more frequent withdrawals.

How to Open an Ally Bank No Penalty CD

Ally is an online-only bank, so you can only open an account through their online and mobile platforms. Here's how to open a CD via their website:

1. Go to Ally's No Penalty CD page and click Open New Account.
   
2. Fill out the application by providing your Social Security or Tax Identification number and other personal details.
   
3. Submit and fund your account.

How to Deposit and Withdraw Money

To deposit money to your Ally No Penalty CD, you do any of the following:

• Transfer from an external account or another Ally account
  
• Ally eCheck Deposit℠
  
• Mail a check to Ally Bank, P.O. Box 13625, Philadelphia, PA 19101

To withdraw money, on the other hand, you can choose from these methods:

• On your online or mobile platform, go to Manage CDs and select Early Withdrawal.
  
• Call their 24/7 support line at 1-877-247-2559.
  
• Write to Ally Bank P.O. Box 951 Horsham, PA 19044

Keep in mind that you can't withdraw funds from your Ally Bank No Penalty CD until 6 days after you first deposit money into it. Afterward, you can take out your money at any time.^[5]

How It Compares to Other Ally Bank Accounts

Considering other accounts at Ally? Here's how they compare to their No Penalty CD:

Ally Bank High-Yield CDs
Some CD terms offer higher APY than their No Penalty CD. But, since these are standard CDs, there is an early withdrawal penalty.

Ally Bank Raise Your Rate CDs
If you need a longer CD term but want an option to increase your fixed rate during the term, these are a good option. But they do have lower APY and are subject to early withdrawal penalties.

Ally Bank Savings Account
For more flexibility and a competitive APY, Ally's Online Savings Account is a great option. It has no monthly fees and offers a variety of helpful saving tools. Keep in mind, though, that the rate is variable, unlike the fixed rate you get with a CD.

Ally Bank Money Market Account
If you need more ways to access your money, their Money Market Account is another good candidate. You get a solid APY (though also variable, and it offers a debit card and checks.

Ally No Penalty CD Alternatives

Ally's No Penalty CD rate is good, but it's not the highest. Take a look at the list below for other no-penalty CDs with great rates.

Is Ally Bank Safe?

Yes, Ally Bank is a legitimate bank and an FDIC member (Cert #57803). So, your money is insured for up to $250,000 in the unlikely event that Ally goes under.

Ally Bank was established in 2004. And today, they are among the top 50 banks in the US with over $193 billion in assets as of March 2024.^[6][7]

Bottom Line

Ally Bank's No Penalty CD gives you a competitive APY. More importantly, you get the flexibility to withdraw your money anytime without worrying about early withdrawal penalties!

But, you are limited to an 11-month term. And while the rate is good, it is certainly not the highest. Ally does have other savings products that might be good alternatives.

If you need other no penalty CD options, it is best to look outside of Ally Bank.

References