I’ve talked a lot in the past about using long-term CDs to improve your short-term savings yields. In particular, I’ve talked about using five year CDs from Ally thanks to their low early withdrawal penalty.
Until now, however, much of that strategy was theoretical. Yes, I had bought the five year CDs to hold some of our short-term cash, but I hadn’t actually tried to break any of them early — until today.
The time has come to re-deploy some of the cash that was sitting in those CDs, so I contacted Ally via their online chat interface. For the record, you can close accounts via chat or on the phone, but not via e-mail.
After exchanging pleasantries, I explained what I wanted to do. The rep then asked for the account numbers, explained that I would be penalized 60 days worth of interest, and then stated the following:
We are experiencing a larger than expected delay in processing these types of requests. The request will be completed in 5-7 business days. I apologize for the delay, and we are working as quickly as possible to complete the request.
I’m not sure why that is, but I suspect it might be due to recent news about Ally’s troubled mortgage unit, Residential Capital. The latest word is that they’re preparing to package up ResCap and sell it off, which would help them pay off the emergency loans they took as part of the financial bailout.
Regardless, our money is FDIC insured so I’m not particularly worried. I did, however, ask if it was possible to expedite the request and was told that she would “escalate” it, but that it could still wind up taking 5-7 business days.
The delay doesn’t really affect us in this case, but you may want to allow some additional lead time if you anticipate needing your funds by a specific date.
Update: I just checked and was pleased to discover that my request has already been processed. What could have taken a week wound up taking just a few hours.