It is not a good idea to open a CD with a term of 9 months or less at Ally Bank. The reason is based on simple math. Here are the latest CD yields from
Ally Bank High Yield CD
(as of 7/11/2011):
3 Month CD = 0.44%
6 Month CD = 0.94%
9 Month CD = 0.99%
Instead of opening one of these shorter term CDs, it is a better choice to open up an
Ally Bank No Penalty 11 Month CD
with an APY of 1.19% APY. Because it has no early withdrawal penalty, you can withdraw your money from the 11 Month No Penalty CD at any time. The yield beats out any of the shorter term CDs that Ally Bank offers, so there is no need for any of the shorter term CDs which will charge an early withdrawal penalty. Also, there is no minimum deposit requirement on Ally Bank CDs, and Ally is FDIC insured.
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