Business Insider's personal finance team compared Ally Bank CD rates to the best CD rates and found them to be above average.
Ally Bank (Member FDIC) is known for operating entirely online. Ally offers some of the best CDs if you're looking for a CD with no minimum opening deposit, which is quite rare. It also offers specialty CDs, such as IRA CDs, no-penalty CDs, and bump-rate CDs.
That being said, if you're interested in standard CDs and you don't need them to have a low minimum opening deposit, other online banks and credit unions offer better rates than Ally.
Current Ally CD Rates
Ally High Yield CD Rates
Ally High Yield CDs pay a fixed rate of 2.90% to 4.05% APY (Annual Percentage Yield) and have a $0 minimum opening deposit. Ally's rates are well above average CD rates, although they aren't as high as you can get at some other online banks.
Ally High Yield CDs are available as both standard CDs and IRA CDs. When you open a High Yield CD or an IRA High Yield CD, the rate you receive upon opening is fixed until the end of the term length.
| Term | APY |
| Ally 3 Month High Yield CD | 2.90% |
| Ally 6 Month High Yield CD | 4.05% |
| Ally 9 Month High Yield CD | 4.00% |
| Ally 1 Year High Yield CD | 3.90% |
| Ally 18 Month High Yield CD | 3.80% |
| Ally 3 Year High Yield CD | 3.40% |
| Ally 5 Year High Yield CD | 3.40% |
Ally Raise Your Rate CD Rates
Ally Raise Your Rate CDs pay 3.40% APY.
When you open a Raise Your Rate CD, you have the option to increase your rate during the term if Ally's rates go up. You can also open an IRA CD version of Ally's Raise Your Rate CD at the same terms and interest rates. Here are the Raise Your Rate current rates and how they work for each term:
- 2 years: 3.40% APY. You may increase your rate once during the two-year period.
- 4 years: 3.40% APY. You may increase your rate twice during the four-year period.
You might want a bump-up CD if you expect rates to rise in the future. You won't have to wait until your CD matures to take advantage of a better rate.
Ally No Penalty CD Rates
Ally No Penalty CDs come with an 11-month term and pay 3.75% APY. Unlike Ally's other CD types, you cannot open an IRA no-penalty CD.
If you open a No Penalty CD and withdraw from the account before the term ends, you won't have to pay an early withdrawal fee.
Overview of Ally CDs
Ally is one of the best online banks and a strong choice for CDs. Its CDs stand out from competitors because they have $0 opening deposit requirements, standard-to-low early withdrawal penalties, and strong CD rates, although you might be able to find better standard CD rates at other banks or credit unions.
Ally is also a solid choice if you're looking for a special type of CD that doesn't charge an early withdrawal penalty or lets you request a rate increase. That being said, it doesn't offer as many standard CD term lengths as many other banks do. For example, if you want to open a 2-year CD with Ally, you'll have to open a Raise Your Rate CD — Ally doesn't have a standard 2-year CD.
Ally CD Pros and Cons
Ally CD Pros
- Traditional, no-penalty, and bump-up CD options with great interest rates
- Standard-to-low CD early withdrawal penalties
- $0 minimum opening deposits on all accounts
- 24/7 customer service
- Can do all your banking at Ally (also has checking accounts, high-yield savings accounts, and money market accounts)
Ally CD Cons
- No physical locations
- May still find even higher CD rates at other financial institutions
Ally CD Alternatives
Ally CDs vs. Discover CDs
Discover® requires an opening deposit of $0, similar to Ally.
Discover® CDs have longer terms than Ally does, all the way up to 10 years. However, it doesn't have CDs that allow you to raise your rate, and there aren't any no-penalty CDs.
Discover CD rates are comparable to Ally certificate of deposit rates; they range from 2.00% to 4.10% APY.
Discover Bank® (Member FDIC) Review
Ally CDs vs. Marcus CDs
Ally doesn't require an opening deposit or a minimum account balance. If you open a Marcus High-Yield CD, you must make an initial deposit of at least $500.
Ally's early withdrawal penalties are more affordable than Marcus' penalties. However, both offer no-penalty CDs. Ally only has an 11-month No Penalty CD, and your rate is determined by how your balance. Marcus gives you the option to open a 7-month, 11-month, or 13-month no-penalty CD, and each comes with a different rate.
Marcus CD rates are similar to the rates at Ally, ranging from 3.75% to 4.30% APY.
Ally CDs: What You Need to Know
Types of Ally CD Offerings
With Ally, you can choose from three types of CDs: High Yield CDs, Raise Your Rate CDs, and No Penalty CDs.
High Yield CDs are the bank's regular account offerings. Ally offers a standard range of CD terms. You can choose between terms ranging from 3 months to 5 years.
Raise Your Rate CDs, and No Penalty CDs are specialty CDs you won't find at every bank. Raise Your Rate CDs are a type of bump-up CD. These CDs allow you to ask for a rate increase on a 2-year or 4-year term if rates rise during the term. A No Penalty CD lets you make early withdrawals from a CD without facing any early withdrawal fees.
Ally doesn't offer jumbo CDs, which are CDs that require a very high minimum opening deposit — usually around $100,000 — in exchange for slightly higher rates. If you have at least $100,000 to put in a CD, you might prefer banking somewhere else.
Ally Online Banking Experience
Ally doesn't have physical locations, and you can't deposit cash. A brick-and-mortar bank will be more suitable if you prioritize these features in your banking experience.
If you're interested in an online banking experience, Ally stands out from competitors because it has 24/7 customer support by phone. This may be beneficial if typical bank hours don't usually work for you.
Ally CD Minimum Opening Deposit
You don't need a minimum opening deposit for any Ally CDs. Banks generally require at least $1,000 to open a CD. This makes Ally an especially strong option for anyone who is looking for lenient CD opening requirements.
Ally CD Early Withdrawal Penalties
If you choose a High Yield CD or Raise Your Rate CD and withdraw from the account before your term ends, you'll face the following penalties:
- 60 days interest penalty for a CD term of 24 months or less
- 90 days interest penalty for a CD term of 25 months to 36 months
- 120 days interest penalty for a CD term of 37 months to 48 months
- 150 days interest penalty for a CD term of 49 months or more
Ally's early withdrawal penalties are more lenient than other banks.
Factors Affecting Ally CD Earnings
The amount of interest you'll earn in a year is the CD's APY. The APY of an account can fluctuate over time. Indirect factors like economic conditions can affect the APY.
Your choices can also affect your total CD earnings. We'll explain more about that below.
Market and Economic Conditions
You might notice that Ally CD rates often change during the year. That's because Ally CDs are indirectly impacted by economic conditions. Generally, Ally CD rates go up when the Federal Reserve raises the rate. You'll see Ally CD rates drop when the Federal Reserve cuts rates.
The Fed holds meetings several times a year, which is when they adjust the federal funds rate. To get a better understanding of economic conditions, you can review what will happen at the next Fed meeting.
CD Term Lengths
Each Ally CD term has a specific APY. Usually, Ally's long-term CDs pay the most competitive APY. However, short-term CD rates have higher interest rates than long-term CD rates right now. That's why Ally's 6-month, 9-month, 1-year, and 18-month terms have higher rates than the bank's long-term options.
Experts recommend choosing a CD term based on your goals. You can also build a CD ladder if you're interested in opening multiple CDs with different term lengths. Using this strategy will allow you to take advantage of the highest rates and have more flexibility.
Ally Opening and Renewal Perks
Ally offers a few perks that could increase your earnings if you take advantage of them.
The first one is the Ally Ten Day Best Rate Guarantee. The guarantee says that, if you fund your Ally CD within the first 10 days of opening the account, you'll automatically get the best rate Ally offers if the rate goes up during that 10-day period. For example, if you open a 1-year CD on March 12 when Ally's rate is 4.00% and Ally raises its rate to 4.10% on March 15, your CD will have the 4.10% rate if you fund your CD within 10 days of opening it.
In addition, if you renew your CD, you'll earn a 0.05% interest rate boost as a loyalty reward. So, if you open a 3-month CD with a 2.90% rate and choose to renew it when it matures, you'll earn a 2.95% rate if Ally's 3-month CD rates haven't changed. If Ally rates have changed, you'll earn whatever the current interest rate is plus 0.05%.
CDs will auto-renew at maturity if you haven't told Ally otherwise. You'll have a 10-day grace period to take money out when a CD matures. If you don't withdraw your money before the end of the grace period, the CD will generally auto-renew into a CD with the same term length, but with whatever interest rate Ally offers at the time of renewal. Some of Ally's Select CDs will renew into a different term. If you're opening a CD that does this, you'll be told what the CD will renew into when you open the CD.
Opening Deposit
Ally CDs only let you deposit money upon account opening. You won't be able to make an additional deposit until your CD reaches maturity. Hence, the money you deposit initially will determine how much you'll earn in the long run. You'll get more interest if you deposit more money into a CD.
Why You Should Trust Us: How We Reviewed Ally CDs
We rate bank accounts on a scale from one to five stars. For our CD review, we used our CD methodology, which looks at interest rates, minimum opening deposits, early withdrawal penalties, CD variety, customer support availability, mobile app ratings, miscellaneous features, and the security and ethics of the company.
Once we've rated each of these categories from zero to five, we take a weighted average to find the rating for the CD as a whole.
Ally CDs FAQs
Ally High Yield CDs pay higher rates than average CDs. The no-penalty and bump-up CDs are especially competitive when looking at offerings from competitors.
Ally can decide to change Ally CD rates at any time, although rates are usually impacted by economic conditions. If you have an Ally CD open, the rate will remain fixed until it reaches maturity. Renewed CDs may offer a different rate from your previous account, though.
The highest CD rate at Ally Bank is its 6-month CD with 4.05% APY.
Yes, Ally has unique CDs. Ally has two Raise Your Rate CDs and a No Penalty CD, as well as IRA CDs. Raise Your Rate CDs are bump-up CDs, which allow you to ask for a rate increase while your account is open. A No Penalty CD lets you withdraw for free before your CD reaches maturity. An IRA CD is a type of retirement account.
No, you don't need an Ally bank account to open an Ally CD. You can apply for an Ally CD and make an ACH transfer from an external bank.
Ally High Yield CDs and Raise Your Rate CDs have early withdrawal penalties. Penalties range from 60 days to 150 days of interest, depending on the term.
