Ally Bank Delivers Lower CD Rates Than Promised; Also No Pony
A few weeks ago, we posted about the rebranding of and promising new start for Ally Bank, formerly GMAC. But one new customer isn't very enthusiastic about their services.
Using the metaphor of the commercial at left, reader Bryan thinks that Ally is giving investors a plastic pony, and hoping they won't notice. He wrote to Consumerist last week:
Ally Bank made headlines with their high interest rates on their savings accounts and CDs. (CDs are fixed interest rate investments and mature like bonds). Even the consumerist reported on it to notify their readers of the high rates.
I signed up for a 9-month [traditional] CD on Thursday 6/4, and my funds were transferred electronically the next day. Throughout the sign up process they probably mentioned my rate of 2.60% 3-4 times, and even showed how much money I would make on maturity at this rate. Well, on Monday I signed into my account, just to make sure they had my funds and there were no problems. However, on the account details page I noticed that my rate was listed as only 1.90%! I was extremely confused and immediately called Ally to ask what was going on. The CSR told me they had the right to change my rate without notice before they received my funds, and they did just that on 6/5 Friday morning.
I have been investing in CDs for the past 15 years and I have never seen anything like this before. Maybe a 0.10% drop between the rate I was quoted and the time to mail a check, but never a 0.70% drop within a few hours of a quote! I am unsure whether this is legal or not, but I do know this is not the proper way for a bank to treat investors. I asked to speak to a supervisor and demanded they either change my rate back to 2.60% or close my account without penalty. They changed my rate back about 24 hours later without any further communication.
Bryan's experience proves that the squeaky wheel does indeed get the .7%, but what happened to his interest rate? We contacted Ally Bank via e-mail, and will let you know what their response is.
Ally has indeed lowered their CD rates due to pressure from the FDIC, but they remain higher than those you'll find at your neighborhood bank. Jim at Bargaineering wonders what's going on:
A traditional CD should never have a lower yield than a no-penalty CD of the same maturity. With a no-penalty CD, you have the right to close the CD before the maturity period without penalty. The bank can't close it. You should be paying, through a discount on the interest rate, for that flexibility. When the no-penalty CD first debuted, its interest rate was a tenth of a percent lower than the traditional CD's rate.
Have you moved money to Ally Bank and noticed similar interest rate changes? Do other small banks advertising great rates online change their rates in a similar manner?
Ally Bank's No Penalty CD Rate Arbitrage [Bargaineering]
Ally Bank bows to FDIC and cuts rate [CNN Money]
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Comments:
The mark of a great ad is one that makes you put down the remote and watch it. I LOVE THIS AD. I rank it up there with the Verizon "Dad Got Hosed" ad with Clay Davis.
I'm OMG! Ponies! and I approve this message.
This commercial still bothers me. The 2nd girl didn't ask for a real pony either. So what does this commercial really tell you? I'm honestly surprised no one has called this racist yet, where the girl with dark hair and eyes gets a lesser gift than the blonde hair, blue-eyed girl.
The other commercials in the series make more sense, like the bait and switch one:
I opened a no-penalty CD on 6/18, and just checked my account. It says my APY is 2.3%, which I'm pretty sure is the same as I was quoted when I opened the account.
That, along with the fact that the site advertises 2.15%, is a little suspicious. This Bargaineering guy had a 1.9 sneaked onto him ... then the rates went up after that?
@OMG! Ponies!: AT&T "missed call" ads are pretty good as well.
As for Pony related ads, Verizon is the best with theirs:
The answer to the bite question is perfectly timed.
@TCama: 9 month CD, not 1 year. It currently has an APY on their website of 1.75%, so it's gone down even further.
The 2.15% is a different product, it's a no penalty CD, which isn't the account type he applied for (I just opened one so I know the 2.6% was the regular; earlier the no penalty was only at 2.5%)
Well, if they're going to slaughtering dairy cows, we can always use the horse meat.
All you have to do is look at the comments posted when Consumerist first reported these pie-in-the-sky APRs for just how easy it was to see this happening.
I signed up for an Ally online savings acct after the consumerist posted about their 2.5% rate, I signed up the same day but by the next day the rate was 2.05%, was I not supposed to notice it because it still had a 2 and a 5 in it? I was a little irritated but the rate was still better then my other banks and the signup process was great and their website has proven to be very nice. Overall I am a happy and will continue to use them but I still feel a little like that girl who got a plastic pony.
I submitted this story and there's one thing I wanted to comment on: Ally lowered the 9-month traditional rate to such an extreme that it effectively made the CD a lame-duck investment (below both the no-penalty and even the 6-month CD). The only people who would invest in it are those who were mislead into thinking they were getting a much higher rate.
I hope the investors that didn't notice the rate change or were too timid to complain see this post and complain to Ally.
If ally doesn't give that adorable little girl a real fricken pony I swear to all that is holy I will track them down and... just kidding. Funny commercials :)
The exact same thing happened to me with their 12 month CD, down to every detail. I signed up for the CD and the savings acct and chose micro-deposits into my ING and Wachovia accts to start the transfers. At that point I was told by not one but two CSRs that my rate was locked for 30 days no questions asked. By the time the micro-deposits came through (4 days later) they'd changed my CD rate from 2.8% to 2.6%. Like the OP I immediately called to ask what the hell was going on, and they changed my rate back a few days later.
Sneaky GMAC.
I'm in my 40's and still waiting for my god damn pony!
I'm kind of upset that they're branding themselves as a New bank instead of the financial division of a bankrupt company and expecting people to implicitly trust them because of some creative advertising. This makes me upset. Nothing has changed.
Ally bank, ran a hard credit check before it would let me open a no penalty CD. I have never heard of banks doing that for to open a CD, i have heard of it for some checking accounts but never for a CD. I thought i had read the application clearly, so either i missed something or they were not entirely upfront. either way the only time i found out about it was when i my application for a CD was "declined" and i had to call in to be told that from what they saw my credit score was not 620. I have had bank accounts and have no outstanding overdraft fees with any bank or anything of the sort. so this came as shock. i decided not to open with them or to "challenge" the decision, but i did think it was odd to say the least, so i am shocked that they do other things that are not completely kosher.
@MostlyHarmless: Hey, I'm a cradle robber, but that's just sick. 10 years younger than me or less is my current criteria.
Jest shows to go that changing the name does not necessarily change the game. How about AIG?
@zibby: To quote the Man in Black (not Johnny Cash, but the one in THE PRINCESS BRIDE), Life is pain. Anyone who says differently is selling something.
I'm not sure what all the hoopla is here...their policy clearly says that your CD rate is determined and locked in when they get the money. It's not as if they were monitoring your specific account opening and maliciously changed to a lower rate right before it was funded, just to screw you. Rather, their rates change every Friday and have been going down consistently. I can understand being upset if you open a CD on Thursday and get the lower rate due to the fact that transferring money takes time, but the fact that it is clearly stated means that this shouldn't be taken negatively either...
@AllToAll,ByMyMustard!_GitEmSteveDave: Well, if you read it that way, the commercial is implying that other banks are racist, but they're not. Which is... nice, I guess? But the commercial is clearly on the first girl's side, since she got screwed -- and her "you're full of shit" look is priceless.
@EarlNowak: I opened a 3 month CD at my local credit union (where I do most of my banking) and a few months ago with a 2.25% rate. Opened immediately (no transfer time) and haven't had any trouble. Why go to a bank :P.
My wife and I tried to open a CD account with them. After several back and forth phone calls and requests to establish our residence and mailing addresses (in addition to our original paperwork and copies of our drivers licenses they wanted utility bills and a copy of our PO Box receipt), we told them to return our money. Their customer service said they would send our original check back. They didn't. We never had an account with them but they cashed our check. Our bank statement showed the check was paid.
When I called to ask why my check was cashed, no one could explain. They told me that they would send my complaint to an escalation team for immediate resolution and they would call me back with the results 2 days later. No one ever did. When I called them to find out the status of my check, I was told that my account was pending and that in 5 days or so, they would review the matter. After yelling at the CSR, I was put on hold and eventually told by the rep that she made a mistake, my check was already mailed. I would have it in 7-10 working days.
A few days later, Ally called me again. This time, I was told that I would have to prove that the check had been cashed in order to receive a refund. So basically, they never opened an account for me, they cashed my check, lied to me that they had already refunded my money, then called me and told me that I had to prove my check had been cashed to get a refund. This is after they acknowledged receiving the check and accidentally cashing it. They knew the check number and the amount but still no refund. Unbelievable.
In all, they've held my money hostage for a month. Someone either lost or stole my check and they won't give my money back yet. Don't give this company your business.
I'll be closing my Ally Bank online savings account in a few days. I joined in March of this year when Ally was still GMAC. The rate was 2.50%. The rate has done nothing but sink ever since. They just dropoped the rate again! Today it's down to a mere 1.70%. I'm switching to Discover online savings where the rate is 2.00%. I also closed mu ING online savings account. ING was once the best but their rate is a pathetic 1.40%.
@GitEmSteveDave_IsWaving: The Commercials are not racist they are saying that ally doesnt give you a lesser product because you didnt ask for one the rates are what they say they are.
P.S hair and eye colour does not donate race both kids are white
![[www.photohost.org]](http://www.photohost.org/gallery/data/500/105NoPony.jpg){kind=link}
Ally's policy is that your rate is locked in when money is received. If you do a funds transfer from another bank, I think it's either three or five business days. If you do a funds transfer from another Ally account the rate locks in instantly.
There was a discussion about this on fatwallet.com the other day. Some people have had luck calling and asking for the previously posted rate.
More info here: [www.fatwallet.com]
specifically this post:
"Just a quick positive Ally story - opened a 9 month no penalty CD a few weeks ago at the 2.5% rate. CD failed to fund because I made a mistake in the account number from which the funds should be pulled. Called today to give correct account info and after speaking w/ a supervisor CSR confirmed they would still give me the 2.5% even though current rate is 2.3%. Simple gesture, but good customer service, particularly since it was totally my error."