Ally Bank will change its early withdrawal penalty effective December 7, 2013. CDs purchased or renewed on or after that date will have the new schedule.
I have recommended Ally Bank’s 5-year CD product for several years. With a 60 day withdrawal penalty, it was a great place to park emergency funds. For a very small cost, investors could access their cash early – whether it be for spending needs or for a higher-rate product. It may still be a decent place for some of your cash, but the withdrawal penalty on the 5-year CD is increasing to 150 days’ loss of interest from 60 days. The 4-year CD will increase to 120 days’ loss of interest and the 3-year CD will increase to 90 days’ loss of interest.
Please be aware of these changes and evaluate CD rates and withdrawal penalties carefully.