New Ally Bank CD Early Withdrawal Fees

I just received notice from Ally Bank that they will be changing the early withdrawal charges on their CDs. If you’ve followed any of my CD posts, you will see that I have created a CD ladder at Ally Bank. I chose Ally Bank because of it’s low early withdrawal fees, making long term 5 year CDs a little more “liquid” than other long term CDs. But unfortunately it looks like Ally Bank can’t keep those rates anymore and decided to increase the early withdrawal fees.

Here’s a breakdown of the new fee system: (taken from Ally website)

Before 12/07/2013
All CD terms 60 days of interest
After 12/07/2013
2 years or less 60 days of interest
3 years 90 days of interest
4 years 120 days of interest
5 years or longer 150 days of interest

This means a 5 year CD can make you lose 5 months of interest! With a 5 year CD rate at 1.60% and high yield savings account at 0.86%, it might be more worth it to just keep a high yield savings account. With higher early withdrawal fees, my CD ladder seems to make even more sense to me now.




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