It's not uncommon for people to inquire about a fixed rate savings account— or a savings account that earns a predetermined interest rate for a specific time period. While many financial institutions, including Ally Bank, do not offer fixed rate savings accounts, most offer certificates of deposit (CDs), which are savings products with fixed rates.
CDs are time deposits. When you open a CD, you agree that you will not withdraw the funds until the maturity date, which varies from a few months to several years after you open the account, depending on the term you choose. You can close a CD before the term ends, but you typically will pay an early withdrawal penalty for doing so. Because you can choose a CD with a predetermined term and interest rate, you can calculate your earnings at the outset.
One of the benefits of CDs is the fact that you are discouraged from withdrawing your principal before the end of the CD's term offering built-in savings discipline. CD term restrictions also make them ideal for long-term savings goals. For instance, if you are looking to put away money for a child's college education costs, a CD might be a good place to park that money for the few years before he or she heads to campus.
Another benefit of CDs is that their interest rates are usually higher than those found in regular savings or money market accounts. It pays to shop around to find a CD that pays a great interest rate with terms that fit your goals. If you have several CDs in varying terms, you can ladder them over time for maximum earnings.
Regardless of your financial plan, there's an Ally Bank CD to help you reach your goals:
- High Yield CD: A CD with our competitive fixed CD rate for a specific term—anywhere from three months to five years.
- No Penalty CDs: The Ally Bank 11-month No Penalty CD allows you to withdraw all your money, including interest earned, without any penalty, any time after the first six days following the date you fund your account.
- Raise Your Rate CDs: With our Raise Your Rate CDs, you have the option of a one-time rate increase if our 2-Year CD rate goes up; you have the option to increase your rate twice (two times) if our 4-Year CD rate goes up.
Ally Bank is committed to making saving as easy, secure, and rewarding as it can be. Learn more by visiting Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.