Best CD- Ally Bank currently offering 1.25% No Penalyy

[WannabeWealthy]

Hello,

I am looking into The Ally Bank 1.25%, no withdra penalty, 11 month CD.
According to what I've read, there are NO fees after the money has been deposited for 6 business days. Since I already use ALLY for savings, I don't see any reason to not get the extra interest, when I can essentially withdraw penalty free.

Am I missing something? Does anyone know something I don't? Seems like a steal when compared to savings/CD's at any other bank. This is for long term savings.

[Nutria]

This is... unusual.

Their 11 month CD is 1.25%, but the 12 month CD is lower, at 1.05%!

The only difference I can see in them besides the term is that the No Penalty CD might not be available as a CD.

EDIT: I bank with CO360, Ally and Synchrony and am going to buy a CD in Jan from CO360. They and Synchrony have the same (or "close enough") rates, but I like the CO360 web interface better.

[scfr]

This is... unusual.

Their 11 month CD is 1.25%, but the 12 month CD is lower, at 1.05%!

It happens fairly often that you'll find a shorter term CD with a higher interest rate, usually when a bank is offering some sort of special on a short-term CD.

[kork13]

It happens fairly often that you'll find a shorter term CD with a higher interest rate, usually when a bank is offering some sort of special on a short-term CD.

Yep. Basically a marketing play to attract more deposits.

[snafu]

I'm not meaning to be quarrelsome, merely confused...

With inflation at 4% on the most basic items like food, utilities, insurance rates, bank charges for example, why are you choosing CDs? A good, low MER Bond Fund or ETF Bond fund averages around 5% and can be converted to cash in two business days.

What am I missing? Is it your Risk Ratio? Is this a cash holding service until there is sufficient accrued for minimum opening MF ? How much do your relinquish to tax?

[feh]

I'm not meaning to be quarrelsome, merely confused...

With inflation at 4% on the most basic items like food, utilities, insurance rates, bank charges for example, why are you choosing CDs? A good, low MER Bond Fund or ETF Bond fund averages around 5% and can be converted to cash in two business days.

What am I missing? Is it your Risk Ratio? Is this a cash holding service until there is sufficient accrued for minimum opening MF ? How much do your relinquish to tax?

Any bond fund that returns 5% must be holding some fairly risky bonds.

[Nutria]

I'm not meaning to be quarrelsome, merely confused...

With inflation at 4% on the most basic items like food, utilities, insurance rates, bank charges for example

https://www.bls.gov/news.release/pdf/cpi.pdf "Over the last 12 months, the all items index rose 1.7 percent before seasonal adjustment."