According to Ken over at DepositAccounts.com, Ally Bank has changed (or at least “clarified”) their CD early withdrawal policy. As I’ve noted several times in the past, Ally CDs have been particularly attractive due to their low 60 day interest penalty for early withdrawals.
When this policy was combined with their rather competitive rates, Ally’s CD rates looked a heck of a lot better than the best available online savings accounts. But with this change… Not so much.
So what exactly has changed? Well, they’ve modified the language to state that:
If we consent to the redemption of a CD or IRA CD prior to the maturity date, we will close the CD and impose a penalty. The penalty amount will be equal to the loss of 60 days interest calculated at the interest rate in effect for the CD or IRA CD at the time the redemption request is made.
The “if we consent” bit is new.
As you may recall, we’ve talked about the possibility of banks changing their CD policies in the past. At that time, Ally had offered assurance that they would honor their current policies for all existing CDs and that if any changes were made, they would happen with 30 days notice and only apply to new CDs.
In this light, it’s worth noting that a reader of Ken’s original post had contacted Ally and was advised that this was not a change, but rather a clarification of an existing policy. Be that as it may, it’s unclear why they felt a need to “clarify” their policy at this time unless they foresee the need to refuse CD redemptions.
Until this is cleared up, I can’t recommend buying CDs from Ally if there’s any chance that you might want to take advantage of the 60 day interest penalty for early withdrawal. While I’m sure that Ally isn’t the only bank to have such language included in their terms and conditions, the recency of this addition feels a bit ominous.