
The better your interest rate, the more opportunity your money has to grow. So it’s natural to wonder how changes in the Federal Reserve’s interest rate policy may impact you on a personal level. Specifically, you might be concerned with how your savings goals may be affected if rates change, as they have done recently.
So what’s happening with your money and what are your options?
Here are the key things to keep in mind about interest rate changes in case you’re not all that familiar with how they work.
How the Federal Reserve sets interest rates
The Federal Reserve (or Fed, for short) is the central bank of the United States and is responsible for setting the federal funds rate. This is the rate at which banks lend money to one another.
To determine the rate paid on deposits, banks and other financial institutions will consider the level of the Fed funds rate, as well as other factors like the current and anticipated rate environment, rate movement from other banks, consumer demand for loans and deposits, and the short and long-term economic outlook.
In other words, the federal funds rate plays an important role in determining the rates on the accounts you may use as part of your savings strategy, but it’s not the only factor. Each bank uses a rate strategy that supports its unique business model and that’s why the rate on savings products can vary so greatly from one bank to the next.
When the Fed makes changes to the federal funds rate — either raising it or lowering it — it’s typically done as part of a broader strategy to manage U.S. economic growth. In a strong economy, for instance, the federal funds rate may be increased to keep prices level and try to avoid the potential for inflation.
On the other hand, the Fed may lower interest rates to spur economic growth. The idea is that by lowering rates, borrowing becomes less expensive since banks also lower rates on loans (like home mortgages) and credit cards. That can help put money back into the economy as consumers borrow and spend more.
One side effect? When the federal funds rate drops, banks charge less to borrow, but they also lower the amount they pay out in interest to savers to help keep their businesses in balance.
What lower (or higher) rates mean for your savings
At first glance, an interest rate decrease may seem concerning. After all, it means you’re earning less money on your savings.
But, it’s helpful to keep a rate decrease in perspective. A .10 percent decrease in annual percentage yield (APY) translates to a difference of just one dollar less earned in interest over the course of a year for every $1,000 in savings.
As you plan your savings strategy, it’s important to remember that the APY on a savings account can fluctuate at any time, but you can access your money at any time without penalty. In contrast, the APY on a CD is fixed for the duration of its term, but your funds are locked up and you could incur a penalty if you make an early withdrawal from your account. As a result, CDs typically have APYs that are higher than those on savings accounts.
It’s also important to remember that rate decreases may work in your favor in other areas of your financial life. Buying a home or refinancing a mortgage, getting a personal or business loan or opening any other line of credit may be less expensive when rates drop.
What’s next for interest rates?
This is a difficult question to answer, as the Federal Reserve’s stance on raising or lowering rates can shift over time. The Fed looks at the entire economic picture, including job growth, wages, inflation and the health of the global economy when making rate decisions.
For individuals, it’s important to remain aware of the potential for rate hikes or cuts and understand what it may mean for your overall finances, including your savings.
Knowledge is empowering and our goal is to make sure you’re as informed as possible. At the end of the day, we want you to feel confident in making the right decisions about where to keep your money when interest rates are on the move.
Discussion questions:
- What do you do when interest rates decrease?
- How have you taken advantage of lower interest rates?
- Do you pay close attention to interest rate movements?
Originally published August 2019
Comment on this article
Comments
Nope on August 5, 2019 at 6:31pm
Stop trying to deflect saying you offer better interest rates than physical banks... that's the REASON people use you in the first place. You didn't have to change this rate; you just got greedy. Time to shop around for a better rate elsewhere.
Ally on August 5, 2019 at 6:32pm
We’re sorry to hear this. Based on the economic news lately, interest rates have begun to decline. These market conditions have an impact that have led us to lower our rate, but rest assured you still have a strong rate – 20x the national average.
Noel on August 5, 2019 at 9:24pm
I keep getting disappointed by the recent trend of Ally's interest rates. When I signed up Ally was at the top of the heap and now they continue to slide for a second time. I told myself if the rate went below 2.00% then I would move over to another bank. Well here we are, so long for now Ally. My accounts will stay open but you won't be looking after a large amount of my money until your rates get better. By the way, why do you compare yourself to traditional brick and mortar institutions when you advertise your rates. It seems disingenuous to use an unfair comparison when you should be comparing yourself to other online banks. Take some pride to talk about 0 fees or how members can open up a large number of savings accounts.
Ally on August 5, 2019 at 9:25pm
We’re sorry to hear this, Noel. Our rate remains 20x the national average, on top of offering 24/7 customer service and tech-forward solutions.
Washington G. on August 6, 2019 at 6:17pm
It’s just concerning how much the interest rate on saving has been steadily dropping...competitive interest was one of the major attraction of having an online savings account with Ally bank.
Ally on August 6, 2019 at 6:18pm
Hi Washington, we offer competitive rates, but the market conditions can impact all kinds of things, from mortgages to CDs to savings accounts. Even with this change, our rate is still 20x the national average!
Jim on August 6, 2019 at 7:06pm
This is a feeble attempt to justify Ally’s to two significant interest rate decreases on all savings accounts. No other bank has decreased rates this much. Some have not decreased rates at all since the Fed’s recent rate cut. Ally is now in 18th place among the top 18 online banks regarding interest paid to customers. We’ve been loyal Ally customers for more than ten years. No more. We’re changing banks.
Ally on August 6, 2019 at 7:07pm
Hi Jim, we’re sorry to hear your frustration. Rest assured, your money is still in the right place. Even with this change, your rate is still 20x the national average.
Alex on August 7, 2019 at 12:54am
I’m trying to get a better grasp of this : Did rates get lowered because the Feds are telling you to, to prevent over inflation of the dollar - since the borrowing rate is less and the savings rate is higher?
Ally on August 7, 2019 at 12:55am
Hi Alex, our rates are determined by a variety of factors, including conditions in the marketplace and the competitive environment.
Charlie on August 7, 2019 at 9:04am
I think Ally is trying to justify the recent drop in interest from 2.10% to 1.90%. That drop i believe is not justified in relation to the Fed rate. Shame on you Ally!
Ally on August 7, 2019 at 9:05am
Hi Charlie, we hear your frustration. The economic news is that interest rates are on the downswing, which impacts our rates. Rest assured, you still have a strong rate, currently 20x the national average.
Dale on August 7, 2019 at 11:40am
Lower rates mean it costs banks less to borrow...their paying me less interest but still loaning my money out at a higher rate...in the end it's the individual just trying to save a little that gets it in the neck.
HypnotiqOne on August 7, 2019 at 11:59am
That was really helpful.
Ally on August 7, 2019 at 12:00pm
Thanks for reading!
Lou B. on August 7, 2019 at 12:16pm
Artical was very helpful . Thanks for keeping me lnformed.!
Ally on August 7, 2019 at 12:17pm
Hi Lou, thanks for reading. Glad we could help!
Aimee T. on August 7, 2019 at 1:05pm
Just don’t drop .2 % lightly! I have moved a lot of money here and e pact you to treat me fairly. Do not become just another bank.
Ally on August 7, 2019 at 1:06pm
Hi Aimee, thank you for being an Ally customer. Our rate remains 20x the national average, on top of offering 24/7 award-winning customer service and tech-forward solutions.
John on August 7, 2019 at 2:25pm
Thank you for posting this article. It was easy to understand as someone who does not have much background knowledge about finance.
Ally on August 7, 2019 at 2:26pm
Hi John, we love hearing this. Thanks for reading!
Elaine S. on August 7, 2019 at 3:01pm
Thank you
Ally on August 7, 2019 at 3:02pm
Thanks for reading Elaine!
Jennifer T. on August 7, 2019 at 4:35pm
I'm learning about the federal reserve and how banks make money right now in macroeconomics, so this article is very helpful and interesting. That being said, it was hard for me as a customer of yours to not jump off the bandwagon and find another bank that offered 2+% interest. You guys still beat the game by offering free checks, high CD rates, and reimbursements for ATM fees.
Ally on August 7, 2019 at 4:36pm
Hi Jennifer, thank you for being an Ally Customer. We appreciate your comment.
Ikaika A. on August 7, 2019 at 11:01pm
If a .10% it's a big deal than why did you drop it? A sub 2% rate puts you out of the game Ally.
Ally on August 7, 2019 at 11:02pm
Hi Ikaika, we’re sorry to hear this. Our rate remains 20x the national average, on top of offering 24/7 customer service and tech-forward solutions.
Tim M. on August 8, 2019 at 6:57am
I've been with this bank for 3 months and they've already dropped rates twice. Searching for a less reactive bank and closing these accounts this week.
Ally on August 8, 2019 at 6:58am
Hi Tim, we don’t like hearing your frustration. Rest assured, your money is still in the right place. Even with this change, your rate is still 20x the national average.
Richard M. on August 8, 2019 at 9:23am
Thanks, appreciate the information. RM
Ally on August 8, 2019 at 9:24am
Hi Richard, thanks for the comment!
Dr. D. on August 8, 2019 at 2:29pm
I am advised when a rate goes up but not you reduce rates. Correct ? At least not by prompt.
Ally on August 8, 2019 at 2:30pm
Hi Dr. Dallas Johnson, thanks for reading. Customers received a message pertaining the rate change.
Martin T. on August 8, 2019 at 8:03pm
When the Fed raises it’s rate you are earning more on the funds that you have in your control. Correct?? If that is so then when the Fed raises rates and you leave the rate that you pay your deposit account customers unchanged you are making more money. Correct?? Accordingly when the Fed raises rates twice and you leave your rates unchanged profits are up but we the customers are getting screwed. Correct?? How can you possibly justify reducing your savings rate based on the recent Fed reduction when you did not increase them after the Fed twice increased their rate?????
Ally on August 8, 2019 at 8:04pm
Hi Martin, our rates are determined by a variety of factors, including conditions in the marketplace and the competitive environment. Thanks for your comment.
brian on August 8, 2019 at 8:05pm
Finding an online bank that pays competitive interest is easy. Give it a Google and see for yourself. Adios!
Ally on August 8, 2019 at 8:06pm
Hi Brian, while we did slightly lower our rate, we still offer a strong rate that is 20x the national average. We also continue to offer 24/7, award-winning customer service and tech-forward solutions to our customers.
James on August 9, 2019 at 2:06am
In the case of raising and lower of the federal interest rate with ally .. can you explain why ally did not increase the interest rates on accounts when the fed raised the interest rate 5 times in the last year ? Can you explain why ally has lowered the interest rate .30% in less than 2 months when the fed dropped the interest rate .25% ? Seems to me that the bank can decide whatever interest rate they want ! When’s the next bank interest rate drop going to happen ? I’ve been with ally for years and the reason was do to the higher interest rate you had . I left several other banks that lowered rates to down right ridiculous and they never fluctuated or raised their rates when the fed raised rates ! Their is no benefit to consumers with credit card interest rates banks aren’t lowering them they continue to raise them to outright loan shark rates .. ridiculous.
Ally on August 9, 2019 at 2:07am
Hi James, we hear your frustration. Our rates are determined by a variety of factors, including conditions in the marketplace and the competitive environment.
Mark on August 9, 2019 at 10:09am
Thanks for the information, informative and interesting. I still don't understand though why there's such a large discrepancy between the current APY on saving accounts at Ally (1.90%) and say Goldman's Marcus (2.15%) though. Based on what you're saying here, that's a loss of $2.50 per thousand dollars per year. So if you have $50k in savings, you're losing a potential $125 (plus interest on interest earned) per year. In the post you state, "Each bank uses a rate strategy that supports its unique business model and that’s why the rate on savings products can vary so greatly from one bank to the next." What's so different about Ally's business model that requires or justifies a 0.25% lower rate? I'm not complaining - there may be good reason and I'm genuinely curious as to how these things work. Thanks in advance. Mark
Ally on August 9, 2019 at 10:10am
Hi Mark, thanks for your comment. Our rates are determined by a variety of factors, including conditions in the marketplace and the competitive environment.
Cara on August 9, 2019 at 10:08pm
I am extremely disappointed to open my account and see that the interest rates have dropped another 0.20%. I'm sure you will respond to this post with your scripted answer of how it's still 20X more than the national average. However, please do not tell me about your "award winning Customer Service". Any company that prides itself on customer service would not sneak a second interest decrease in without being upfront and alerting their customers.
Ally on August 9, 2019 at 10:09pm
Hi Cara, over the past year, we’ve raised our Online Savings Account rate 10 times, consistent with economic conditions. Despite this decrease, we remain among the strongest rates in the industry and are always committed to our customers.
bud a. on August 10, 2019 at 3:44pm
why bother you got my money
Ally on August 10, 2019 at 3:45pm
It's always a good idea to keep track of what your accounts are earning. You can always find the current rate of your accounts on your dashboard at ally.com, or by logging in to the mobile app.
Kenneth N. on August 10, 2019 at 4:24pm
About a month ago, you went from 2.2% to 2.1% and today, I noticed you went to 1.9%. Less than a month ago, I saw something from Green Dot offering 3.0%. So it disturbs me that you lower the rate even though the Fed has done nothing yet and somebody is out there offering what I would consider an increase. I have been an Ally customer for some time and have not observed this behavior before. It is disappointing.
Ally on August 10, 2019 at 4:25pm
Hi Kenneth, we hear your frustration and appreciate you sharing your feedback. Rest assured, you still have a strong rate and we continue to offer 24/7, award-winning customer service and tech-forward solutions.
Kenneth N. on August 10, 2019 at 4:34pm
After submitting my comment, I went back and reviewed past comments and your responses. The comments are never worded the same, and other than saying Hi, whoever, your responses seem very canned. 20% better. Used to have been 23% better or more. Disappointing.
Ally on August 10, 2019 at 4:35pm
Hi Kenneth, despite this decrease, we remain among the strongest rates in the industry and are always committed to our customers. Thanks again for your comments.
Dave on August 12, 2019 at 9:34am
I'm probably in the minority, but here are my comments: No body, if you are looking for better interest rates on your savings is happy when the rate you receive goes down. However, when interest rates are dropping, remember that any financial institution has other options to obtain dollars to work with. I'm assuming Ally and other institutions, in the loan competitive environment, has to reduce new loan rates to borrowers as well. We should be looking at a couple of things in determining where we place our savings dollars. 1. What is the competition offering when looking at all of the factors? 2. What is the spread between savings rates offered and loan rates offered? For now, it doesn't seem worth it to move my savings elsewhere. Of course, I will keep monitoring the savings rate competitive environment and will act if I thing a move is truly worth it in the long run.
Ally on August 12, 2019 at 9:35am
Hi Dave, thank you for being an Ally Customer. We appreciate your comment. Also, we agree, it's always a good idea to keep track of what your accounts are earning.
Laura S. on August 12, 2019 at 10:18am
Your recent rate drop is very troubling. When comparing your savings account rate this morning it is #18 out of the top 20 on Bankrate.com. You try to hide the fact that it is a drop in the Fed rate that has caused this rate to drop from 2.0 to 1.9. Why has this not affected the 17 banks that had rates higher than yours? If you look at my account you will see that this drop affects my daily rate by ALOT. I will be wiring out all of my holdings by the end of the week. Losing my holdings will definitely affect your bottom line. An don't bother with the canned reply of being 20X's the national average. Good Luck , Ally.
Ally on August 12, 2019 at 10:19am
Hi Laura, we hear your frustration and we’re sorry to see you go. Thank you for being an Ally customer.
Steve on August 12, 2019 at 1:56pm
Ally is no longer even in the top 10 banks with their recent rate cut. I think we ALL need to determine if it makes sense to move our money to another bank. Ally can continue to brag about how their rate is 20x above the average, but when they don't fall within the top 10 banks, the rate is no longer competitive. I only have about $40k with them, but maybe if we all jump ship, they will realize that they are no longer competitive.
Ally on August 12, 2019 at 1:57pm
Hi Steve, we offer competitive rates, but the market conditions can impact all kinds of things, from mortgages to CDs to savings accounts. Despite this decrease, we remain among the strongest rates in the industry and are always committed to our customers.
Shawn on August 12, 2019 at 10:30pm
On 6/26/19 you guys notified of a .1% cut, then on 8/6/19 you take another .2% cut. Why would you worry what competitors do? If you're paying more interest, you're going to get more deposits. I'm not happy with appears to be a race to the bottom with your interest. Time to start looking at the other online banks. Too bad your post didn't do the calculation for a .3% rate cut!
Ally on August 12, 2019 at 10:31pm
Hi Shawn, we’re sorry to hear this. Rest assured, despite this decrease we remain among the strongest rates in the industry – 20x the national average.
Tom A. on August 13, 2019 at 1:54pm
The article was interesting, but I didn't see where you actually justified the last two rate drops. I was considering a CD. Its been over five days since I applied for one, and have yet to get approval from you to put some of my money in it to off set your rate drops. What happened to your "we're here 24/7 ???"
Ally on August 13, 2019 at 1:55pm
Hi Tom, if you’ll send us an email to allycommunity@ally.com with your full name and phone number, we’d be happy to have a team member reach out to you directly to discuss your CD.
DM on August 13, 2019 at 2:44pm
I do not think I got a message on the rate change. What date was this? Was it an email message via the Ally website or to my personal email? Thank you.
Ally on August 13, 2019 at 2:45pm
Hi DM, we sent a servicing Email Monday, August 5th to everyone who has an Online Savings Account.
Savings R. on August 14, 2019 at 1:47pm
Ally now has the 18th best interest rate for online savings accounts. I think you can do better or at least be competitive with the top 5 or 6 banks.
Mike on August 15, 2019 at 7:37pm
You keep saying you're 20 times more than the average interest rate on savings. Compared to what? A checking account with 500.00 in it? I have a couple hundred thousand in you're bank and you lower my rate to 1.90? I'm getting 2.20 in a money market account in a local bank. Ally is not the best game in town anymore.
Ally on August 15, 2019 at 7:38pm
Hi Mike, our online savings account rate is 20x the national average when comparing to other national banks. Thanks for your comment.
Dennis H. on August 15, 2019 at 8:41pm
I'm waiting until the end of the month to see if other online banks drop there rates. If they don't I'm going to a 2.4% or 2.5% high yield savings
Ally on August 15, 2019 at 8:42pm
Hi Dennis, we’re sorry to hear this. Rest assured, you still have a strong rate and we continue to offer 24/7, award-winning customer service and tech-forward solutions.
Dave on August 18, 2019 at 12:33pm
I've been a loyal Ally customer for years and loved your bank. The first time you lowered your savings APR I was extremely disappointed but I still stuck by you. But the second interest rate decrease going below 2% was the last straw. I opened up an online savings account with Synchrony Bank who are giving me a 2.15% APR and moved all my money there. And spare me the "our rate remains 20x the national average" retort when all your online banking competitors not only offer better interest rates than you but also haven't lowered their rates to begin with. You know what they say.. money talks.
Johnduncan on October 9, 2019 at 2:34pm
Again, get rid of that stupid nascar race car and restore the rates
Kerry A. on October 9, 2019 at 3:27pm
It's very disappointing to see Ally continually lowering our interest rates. When I first became a customer, I was happy to see the rates go UP. Now, it seems like just the opposite is happening. Now, the rates have dropped from 2.2 to 1.8 in record time, Every email communication from Ally is more bad news - another percentage drop in your interest. Another reason to shop for a new bank. Very disheartening and NOT good customer service. I switched to Ally specifically because of the competitive rates. I even referred several friends to Ally. Not any more. Bad form, Ally!
Ally on October 9, 2019 at 3:28pm
Hi Kerry, we value being straightforward with our customers. The economic news is that interest rates are on the downswing, which impacts our rates. Thank you for being an Ally customer.
Richard B. on October 9, 2019 at 3:40pm
I think it's time to look for a new home for my little bit of saving!
Ally on October 9, 2019 at 3:41pm
Hi Richard, we understand your frustration and we’re sorry to hear this. Rest assured, your money is still in the right place.
Robert on October 9, 2019 at 4:17pm
Just tell me the new rate!
Von H. on October 9, 2019 at 4:39pm
Useless
Neil K. on October 9, 2019 at 4:55pm
This is an excellent well written article. It is clear and valuable information.
Ally on October 9, 2019 at 4:56pm
Hi Neil, this is what we like to hear! Thank you for reading.
mary g. on October 9, 2019 at 5:01pm
I think your responses to customer comments are robot-generated and not worth reading. After this latest decrease I will again be shopping around for a better place to for my money. Without the expense of maintaining physical branches, you should be in the top tier of interest rates offered.
Valerie on October 9, 2019 at 5:25pm
You are now one of the lowest high-yield savings accounts out there..I'd understand the rate drops, except you're already so much lower than so many other banks! Why can't you keep pace with these banks' interest rates?
Ally on October 9, 2019 at 5:26pm
Hi Valerie, the economic news is that interest rates are on the downswing, which impacts our rates. Rest assured, you still have a strong rate with Ally.
C,K, on October 9, 2019 at 5:29pm
This is beginning to look like 2008 all over again. Where can my money be to be more safe?
Ron K. on October 9, 2019 at 5:55pm
To my understanding the Fed has not yet announced what they will do and you already lower your savings interest payout?!?!
Ally on October 9, 2019 at 5:56pm
Hi Ron, based on the economic news lately, interest rates have begun to decline. These market conditions have an impact that have led us to lower our rate.
ndnpro64 on October 9, 2019 at 5:58pm
You can blame Ally all you want but in the end it's Trump's idiotic trade war with China and his general instability/incompetence that stunted the stock market's growth. His constant bullying of the Fed perhaps also contributed to this. You want your savings rates to go up again? Vote Democrats in 2020, period.
Josiah C. on October 9, 2019 at 6:55pm
I was fine with hanging in when you lowered the rate from 2.00% to 1.90% but it's time to make the move now. Vio Bank has an APY of 2.42% so I'm taking my savings over there.
Ally on October 9, 2019 at 6:56pm
Hi Josiah, we’re sorry to see you go. Thank you for being an Ally customer.
BL on October 9, 2019 at 7:10pm
Wow, you really dropped your rate again? So soon after having just dropped it to 1.90? The first drop was bad enough, but a second one already is disconcerting. I'm now giving serious thought to switching to another bank with a better, steadier rate.
Ally on October 9, 2019 at 7:11pm
Hi BL, we understand your frustration and we’re sorry to hear this. Rest assured, your money is still in the right place. Even with this change, your rate is still strong.
Investor on October 9, 2019 at 8:42pm
Why is Ally lowering rates again when the Fed did not cut rates? There is only a prediction at the end of the month that they may but we will not even know until then.
Tom on October 9, 2019 at 9:15pm
When the fed raises the interest rate will Ally raise saving rates to match and At the same speed that they’ve been lowered. For example when the fed cut interest rates Ally lowered saving interest rates within two weeks. Can I expect to see Ally raise saving interest rates within two weeks of the the fed raising interest rates?
Ally on October 9, 2019 at 9:16pm
Hi Tom, our rates are determined by a variety of factors, including conditions in the marketplace and the competitive environment.
joanofark06 on October 9, 2019 at 9:25pm
It's been reported online in a few articles, that the Federal Reserve (who are not federal), are going to cut rates again in October. It'll be the third one this year! If Trump wanted to make American again, you would think he support Americans saving, but no. He's said that he's all for the cuts, and that he wants them to cut more! Why would he want rates lowered, that helps people to borrow, where possibly, more people would go into debt? Doesn't make sense to me! But then again, Mr. Trump has already done, so many things, that has made me angry, and I'm sure I'm not the only one! His siding with, and supporting these cuts, is just another act, to add to all the rest of things he'd done, that hasn't made America great again.
Laura R. on October 9, 2019 at 9:27pm
I literally just opened this account due to the 1.9% interest rate. I am really disappointed it’s been decreased. I have over $10,000 in the account and was planning g to add to it regularly, so that .10% does make a difference to me. I may have to find a new place to bank unfortunately.
Ally on October 9, 2019 at 9:28pm
Hi Laura, we’re sorry to hear your frustration and would hate to see you go. Thank you for being an Ally customer.
TinTin on October 9, 2019 at 9:59pm
I echo the feelings of everyone here. It’s a good article but it’s self serving. I feel like in a way Ally’s worse than banks paying low interest rate. At least they tell you upfront. Ally lured you into deposit money into their accounts with high saving rate then every few months the rate drops a little bit. I will also be taking my money out. It’s not much money but I don’t like Ally’s business practice - pretending to be better but in reality it’s just another bank. Why bother.
Mrs L. on October 9, 2019 at 10:52pm
I opened my savings account with Ally because the interest rate was 2%.Recently the interest rate has gone down twice so I think that I will be taking my business elsewhere. And I'm sorry to say that it doesn't matter if you give 20x the national average if your interest rate keeps going down soon it will be at the national average.
Ally on October 9, 2019 at 10:53pm
Hi Mrs. Lester, we hear your frustration. Thank you for your comment.
Scammers on October 10, 2019 at 6:31am
Time to move to citi. They offer 2.5%. How can you drop rates in the best economy of our lifetime.
Danny on October 10, 2019 at 7:03am
You keep saying that your rate is 20 x the national average. Is that compared to brick and mortar banks? How do you compare to other online banks? Also in the article it says that .10 on $1000.00 = $1.00 in a year. Is it worth all this back lash?
Ally on October 10, 2019 at 7:04am
Hi Danny, thanks for reading. We are 20x the national average when comparing all banks.
Robert h. on October 10, 2019 at 8:56am
How dare you say you are a better bank when change interest rates at a time when you should be raising them to get people to save money, I have lost all hope in alley bank if you can call them a bank a ripe off is what they are, will do as little as I can in banking with ally so called bank, need to raise rates on savings account back to 2.10 where it was before I will be telling everybody on social metta not to put there money in ally saving for it is no good
Torria S. on October 10, 2019 at 9:18am
Good article and yes! info. is power. But when I got notice of my interest decline it brought me to this article; and oy vey! and I'm not even Jewish - that interest rate is something else. I may just consider a CD. I remember when I was raising my children, around the 80's or so I had a Christmas savings acct. that by the end of the year and due to reasonable interest rates, I gave them a fab holiday (they still remember.) Keep them articles comin' like rawhide!
thomas on October 10, 2019 at 9:18am
If i see, "we are still 20x the national average" on one more reply, i'm switching banks.
Ally on October 10, 2019 at 9:19am
Thank you for your comment Torria; we loved reading your Christmas Savings Account story.
Kevin on October 10, 2019 at 9:44am
I understand that rates must be lowered from time to time, but Ally appeared to pull the trigger too early on lower rates. I've been a customer for many years but I'm moving my money now. A .40% drop when your competitors didn't drop nearly that far is a deal breaker.
Ally on October 10, 2019 at 9:45am
Hi Kevin, we hear your frustration. We offer competitive rates, but the market conditions can impact all kinds of things, from mortgages to CDs to savings accounts.
Lucille B. on October 10, 2019 at 10:30am
The article is very informative, it has made me knowledgeable of things I did not understand. Thanks for putting this out there.d.
Ally on October 10, 2019 at 10:31am
Hi Lucille, thanks for reading! We appreciate your comment.
Charles F. on October 10, 2019 at 10:58am
You keep responding by saying your rates are 20x the national average but fail to address the fact that other banks are paying as much as 2.3% to your 1.8%. Everyone has decent customer service and apps. You have no advantage any more. I’ll be looking around at places to move my money.
Ally on October 10, 2019 at 10:59am
Hi Charles, we’re sorry to hear this. While we did slightly lower our rate, we still offer a strong rate along with 24/7 award-winning customer service and tech-forward solutions.
Maurice on October 10, 2019 at 4:41pm
It appears Ally in increasingly getting greedy and it will cost them customers. I used to recommend Ally to friends and family but I will no longer do so. I made my wife switch recently only for them to send an email informing her of yet another interest rate cut. Also, comparing yourselves to traditional brick and mortar banks when you have no overhead costs is unfair and borders false advertisement. Do not insult your customers’ intelligence. You certainly will not see any further influx of my cash in your bank and as soon as I work out the logistics of switching to a competitor, I will do so or move all my funds to Vanguard.
Jerry S. on October 10, 2019 at 4:48pm
I agree with a lot of the posts - there are other online banks and we have a lot in savings invested with Ally so will plan on looking at other online banks for better interest rates. It's funny how banks cant pay savings customers but can charge almost a huge interest rates on the loans (auto, mortgage) as well as any Debit / Credit cards they issue and still claim they can't make money.
Kate M. on October 10, 2019 at 4:57pm
Very helpful. Excellent writing. Simple, logical thoughts for laypeople. I am very pleased with imy interactions with Ally Bank! Kate Mourton
Ally on October 10, 2019 at 4:58pm
Hi Kate, thank you for being an Ally customer! We appreciate your comment. 😊
Kimmarie L. on October 10, 2019 at 5:10pm
Shame on you ,I just past up a better deal ,for your line ,no thanks ,I will take my money elsewhere..
Dk on October 11, 2019 at 7:09am
You give the example that .10 = $1.00 on $1000.00 for the year. Is it worth all this bad press?
Bruce on October 11, 2019 at 7:27am
I've been a VERY loyal customer for many years... but I think you're getting greedy. I don't want to see your canned response about "20x the national rate" over an over--- the national rate is a disgrace, equivalent to keeping money under a mattress. No excuse. It would NOT have killed you to keep the rate at 1.9%--- now lowering again to 1.8!!! --- don't tell me how little difference this will make to me--- if it's not that significant, then you should have eaten it and left it alone. I REALLY doubt that you are loaning out money ay anywhere NEAR 2%. Come on, Ally --- be a REAL ally.
Jana on October 11, 2019 at 2:05pm
Not happy about two drops in interest rates in a row. Interest rates on internet banks should be higher than brick and mortar banks for obvious reasons. There are several banks with better interest rates than Ally and I plan to switch my account to a different bank.
Ally on October 11, 2019 at 2:06pm
Hi Jana, we’re sorry to hear this and would hate to see you go.
Another d. on October 13, 2019 at 4:36am
This is disappointing. I have watched the rate go down from 2.2 to 2.1 to 1.9 and now 1.8%. When will it stop going down and go back up? With all these people leaving since August, I'm surprised you still haven't gotten the message and tried to keep customers to use your savings accounts. You would think you would need higher rates to keep savings accounts open. I do a lot of other types of investments (CDs, stocks, ETFs, etc) through other banks and brokers. Most of these are still on the rise, so the market environment still seems positive (despite changes caused by Trade Wars). Sure your rate might be 20x compared to the national average (the majority being brick and mortar banks with very low interest rates), but compared to other online banks, it seems that you are at the bottom. One year ago when I started here, you were at about 1.8%. So if it goes any lower, I think I just have to allocate my savings elsewhere, at least as a backup to hedge against your ever-changing rates.
Ally on October 13, 2019 at 4:47am
Based on the economic news lately, interest rates have begun to decline. These market conditions have an impact that have led us to lower our rate. We thank you for being an Ally customer.
william p. on October 13, 2019 at 11:49am
If rates keep going down, I might have to consider other options for my funds....
Ally on October 13, 2019 at 11:50am
Hi William, thank you for being an Ally customer. Rest assured your money is in the right place.
Troy A. on October 14, 2019 at 10:42am
To play devil's advocate, the complaints here will likely give Ally pause to raise the rates to prevent kick back when they have to go back down. On the other hand claiming to be "20x" higher than the national rate is in comparison with brick and mortar backs which is misleading. A quick search will find other online banks offering 2.05% still. I like Ally, but will be checking out other options.
Ally on October 14, 2019 at 10:43am
Hi Troy, thank you for reading. We appreciate you being an Ally customer.
Joseph on October 17, 2019 at 1:22pm
I thought Ally was promoted as being different from the brick and mortar guys! Overpromise and underdeliver.
LS on November 16, 2019 at 12:08pm
This latest drop to 1.7 was the last straw. If *all* banks were doing it, that would be one thing, but they aren't. Ally is just being greedy. I just moved my savings to a Citi account with a 2.05% rate. So long, Ally!
Rosebud on January 3, 2020 at 12:58am
Well all I know is I came to Ally because they paid higher than anyone. Now there are several top banks like American that pays more and on my savings I can’t throw away 400-600 a year In interest due to a bunch of pretty words. If other banks can pay higher then I expect Ally to pay the same or more. Wasn’t that the payoff/benefit of not having brick and mortar branches to visit? Thus I’m reevaluating to move elsewhere. Also I’m checking on this daily compounding —it’s my understanding- it isn’t daily unless you are depositing money.
Ally on January 3, 2020 at 12:13pm
Hi Rosebud, we’re sorry to hear your frustration. If you’ll give us a call at 1-877-247-2559, or chat with us online at ally.com, one of our team members will be more than happy to help answer your questions about daily compounding.
I. H. on March 4, 2020 at 8:34pm
LOL. Why are people complaining that Ally's savings interest rate is below 2%? Wake up. You're not going to find 2% anywhere. All of Ally's competition are way under 2%. Last I checked, the most I saw was 1.7%. You're really giving up on Ally because the interest rate offered somewhere else is 0.1% higher???
Brandon E. on March 4, 2020 at 11:32pm
Yes
Ron A. on March 5, 2020 at 9:34am
The Federal Reserve has become a political tool - WHAT A SHAME ! Just like a virus that may or may not effect us ! Hey get a credit card that gives you cash back when you purchase junk ! WHAT A SHAME ! The destruction of America. What happened to doing without & saving till you had money to purchase what you desire ? AAHHH just reduce the fed rate & let banks loan money for almost nothing. The destruction of an economic system.
jmsbrewer1 on March 11, 2020 at 9:18am
CDrates
Rosa M. on April 21, 2020 at 8:33pm
It’s very good to have a bank such as Ally Bank That cares for their customers especially st a time like this with the Coronavirus .I appreciate your business and allowing me a window for payments on my auto loan for the next 120 days May the good Lord forever Blesses your Company and staff.
Ally on April 21, 2020 at 8:36pm
Thanks for the comment, Rosa! We appreciate you being an Ally customer.
Mike K. on April 22, 2020 at 1:58pm
I would like to know how I could Combine my home and auto Payments to save some money right now cause I'm out of work
GRETA P. on May 8, 2020 at 7:29pm
Thank you for sharing this information it was most helpful.
Ally on May 8, 2020 at 7:30pm
Thanks for reading, Greta! 😊
Norman B. on May 9, 2020 at 9:46am
Please defer my payments
lydia on May 12, 2020 at 6:12am
This article is helpful in figuring out my finances. Thanks.
Ally on May 12, 2020 at 6:13am
Thanks for reading, Iydia!
RL P. on May 13, 2020 at 5:31am
Well, so here we are in May of 2020. Ally once more dropped their online savings rates rates to 1.25%, while their competitors still manage to float around 1.5%. I wonder how many of those that complained about a .1% interest rate deduction at 1.9% in March are still with Ally. Convinced my wife to start an account here, too. Looks like we'll both be moving to another competitor with a published rate of 1.69%.
Ally on May 13, 2020 at 6:01am
We understand your frustration and we’re sorry to hear this, RL. Rest assured, your money is still in the right place. Even with this change, your rate is still 15x the national average!
VS on August 13, 2020 at 1:26pm
And yet again...now we're at 0.80%! I understand rates go down but you are now FAR from the highest interest-paying HYSA and have been for some time. Time to move to Vio or Marcus!
Bonnie on August 13, 2020 at 1:54pm
I am very concerned with the interest rates dropping. I kept my money here as it was doing ok. I am 75 years old, a single woman living alone. I am afraid,I don’t know what to do. I have a small annuity and this account plus social security. What will I do when this money is gone.
Scott on August 13, 2020 at 2:39pm
To everyone who has complained about Ally lowering rates, I've been with Ally for many years and at least for the last few years they have been right in line with all the other online banks. In fact, they usually drop their rates later than the other online banks and often they are still slightly higher. If you insists on blaming someone for lower interest rates, look to politicians and economists, not Ally bank. (disclaimer: I am in no way associated with Ally bank other than the fact that I keep money here)
Charlie on August 14, 2020 at 1:22pm
I found the article interesting and informative. While I don't plan on switching banks any time soon, Allys competitive edge in being a bank with the highest interest is no longer true. Now being at .8% interest I see most banks hovering around the 1.05 and .8% threshold. I guess what I am not understanding is now there seems to be no difference between the online bank and brick and mortar locations.
Matrix on August 14, 2020 at 4:52pm
First it's important to understand that banks are not your friend. Anyone who want's to loan you money is not your friend. These articles are slanted to appeal to you. Content can be truthful and yet still be designed to benefit the bank, even if the content may give you something of an advantage over not know it.. While Ally's interest rates are favorable to much of the competition, paying less than a third of the manipulated Consumer Price Index (the real inflation rate is much higher) is an insult. Your best bet is to stay up on what others are paying if you have any significant cash holdings.
No p. on February 6, 2021 at 4:44pm
No point keeping my money here. I keep adding thousands of dollars to my savings account only to keep getting a smaller and smaller amount of interest in return. $36 for over $101,000????? What's the point? I'm putting my money back in my main bank. They won't give me a good interest rate either but at least I don't have to monitor two accounts.
Jerry G. on February 17, 2022 at 8:41am
Long article,however you say nothing. Ally is loaded with on line cash deposits. No reason to raise your rates when you don’t have too. 1/2 of 1 percent Doesn’t look when you look at it this way 🤷♂️
Dianne M. on May 6, 2022 at 3:42pm
MY QUESTION IS WHEN DOES ALLY PLAN TO INCREASE SAVINGS RATES?
Ally on May 6, 2022 at 3:43pm
Hi, the market conditions can impact all kinds of things, from mortgages to CDs to savings accounts. You can always find our most up-to-date rates here: https://www.ally.com/bank/savings-account-rates/.
Mitchell on May 7, 2022 at 8:52am
The FED just increased the rate by 50 basis points. When can we expect to see an increase in our savings account rate?
Ally on May 7, 2022 at 8:53am
Hi, the market conditions can impact all kinds of things, from mortgages to CDs to savings accounts. You can always find our most up-to-date rates here: https://www.ally.com/bank/savings-account-rates/.