People do not generally have a good feeling toward banks. But Ally Bank is trying to change that with exciting products and features for new and existing customers.
There are always dissatisfied customers in any industry of service. The banking industry is no different. But one bank is striving to change the perception that people have of the banking industry.
Ally Bank is offering no-penalty certificates of deposit to new and existing customers. You may not have heard much about Ally because it was once known as GMAC Financing until it was rebranded recently. Here are some of the details about the no-penalty CD:
• When you sign up for a 9-month CD with a 1.25% interest rate, you do not have to worry about a penalty fee for withdrawing some funds before the CD matures. In addition, this product has a 10-day best guarantee and daily compounded interest to help your money work harder for you.
Ally Bank has other services, too, that customers will find appealing in a bank. Ally's high interest rate savings account is just one of those products, but what is even more appealing is the fact that Ally will reimburse you for fees you incur by using another bank's ATM. Ally will do this if you are a customer with a checking that has an interest rate of at least 1.15%. Ally Bank also offers money market accounts at 1.49% with no minimum deposit and no monthly fees.
Ally Bank has a mission of being a different bank. With great CD rates and other new products, they want to change the reputation that banks have by creating a new customer-friendly atmosphere that will draw the trust of the customers back to the banking industry. And with reports of about $3 billion in secured new deposits, it looks like the bank is on its way to success.
The best savings account rates remain near the 2% range this week. Everbank tops the list with their guaranteed 2.25% 3-month promo rate for new money. Southern Community Bank has the highest non-promo rate with their Ready Saver Account.
The best savings and money market account rates remain near the 2% range this week.
Everbank tops the list with their guaranteed 2.25% 3-month promo rate for new money. Southern Community Bank has the highest non-promo rate with their Ready Saver Account, offering 2%.
I've liked the the Everbank account for new money for several reasons. It comes with a 3-month rate guarantee. So, it's an essence a liquid 3-month CD. The top 3-month CD rate is only 1.10% APY. Anyone considering a 3-month CD should be putting their money into the Everbank account. After 3-months, the rate drops down to 1.25% APY. The blended 1-year APY is 1.51% APY. That's not bad but it's the 3-month boost I like the best.
Southern Community Bank's 2% APY is well above the average BestCashCow savings rate of 1.46% APY. Other banks above the average include:
Citigroup recently informed the majority of it's checking account customers that it reserves the right to require seven days notice on withdrawals. Does this mean Citi is fearing a run on the bank?
Citigroup (C), that large banking behemoth that we have all come to love, recently sent out a notice to its checking account customers informing them of new changes to the rules associated with withdrawals of deposits.
The notice states that Citi has the right to require account holders to provide advance notice before withdrawing any money on their accounts. As per the notice, Citi says, “Effective April 1, 2010, we reserve the right to require (7) days advance notice before permitting a withdrawal from all checking accounts. While we do not currently exercise this right and have not exercised it in the past, we are required by law to notify you of this change”.
To any thinking man such a change has two adverse effects. The first is that I cannot withdraw my money in an emergency and may have to wait for it for seven days, should Citi decide to exercise this option, while the second could be more sinister – is Citi looking to restrict the amount of cash it can lose on any one day if ever there were to be a good old-fashioned bank run?
It’s not such a far fetched idea. Citi has only recently emerged from a massive government bailout which saw the United States take a majority stake in the company. Citi lost about 92% of it’s market capitalization since that period and the government still holds its equity stake. The firm was essentially worthless and would have collapsed had it not been for the government intervention that occurred. Had such an event materialized, Citi checking account owners would have flocked to the bank demanding repayment of their checking account funds, thereby worsening the situation and forcing Citi into bankruptcy even sooner.
The new regulations allow Citi to avoid this scenario by making clients wait seven days in the worst case scenario. Such protection is good for the bank but obviously bad for the customer.
Citi itself has said that the notice is just a technical requirement imposed by the FDIC as part of banking law changes that happened when that institution started offering unlimited account protection last year. It’s also worth noting that not only Citi falls under these new regulations and is not the only bank to have sent out “scary” notices. The changes have also occurred at Bank of America (BAC) and JP Morgan (JPM), amongst many other banks.
While there’s no need to be alarmist and stuff your money under your mattress, be warned that banks have numerous legal rights and caveats to keep your money for longer than you might anticipate.