How to Close an Ally CD Early

How to Close an Ally CD Early

I’ve talked a lot in the past about using long-term CDs to improve your short-term savings yields. In particular, I’ve talked about using five year CDs from Ally thanks to their low early withdrawal penalty.

Until now, however, much of that strategy was theoretical. Yes, I had bought the five year CDs to hold some of our short-term cash, but I hadn’t actually tried to break any of them early — until today.

The time has come to re-deploy some of the cash that was sitting in those CDs, so I contacted Ally via their online chat interface. For the record, you can close accounts via chat or on the phone, but not via e-mail.

After exchanging pleasantries, I explained what I wanted to do. The rep then asked for the account numbers, explained that I would be penalized 60 days worth of interest, and then stated the following:

We are experiencing a larger than expected delay in processing these types of requests. The request will be completed in 5-7 business days. I apologize for the delay, and we are working as quickly as possible to complete the request.

I’m not sure why that is, but I suspect it might be due to recent news about Ally’s troubled mortgage unit, Residential Capital. The latest word is that they’re preparing to package up ResCap and sell it off, which would help them pay off the emergency loans they took as part of the financial bailout.

Regardless, our money is FDIC insured so I’m not particularly worried. I did, however, ask if it was possible to expedite the request and was told that she would “escalate” it, but that it could still wind up taking 5-7 business days.

The delay doesn’t really affect us in this case, but you may want to allow some additional lead time if you anticipate needing your funds by a specific date.

Update: I just checked and was pleased to discover that my request has already been processed. What could have taken a week wound up taking just a few hours.

6 Responses to “How to Close an Ally CD Early”

  1. Anonymous

    It’s worth noting that Ally capitalizes your interest so you can not pull it. This is relevant if you discover you need the $ or you want to strip off the interest when rates rise (but you want to keep the CD).

    Most CD’s allow you to pull the interest anytime. That of course, impacts the APR. I think you can have Ally pay you the interest, going foreward but that will also impact the APR.

  2. Anonymous

    I agree with Lance. If I remember correctly, the last time I opened a new 5-year CD at Ally, there was a line in the terms and conditions listing that same time frame.

  3. Anonymous

    Your experience with an Ally CD closure was similar to my experience. I closed Ally’s no-penalty CD early via Ally’s online chat. The CSR told me it was going to take 2 days before it would be transferred to my Ally savings account, and it did take about 2 days.

  4. Nickel

    Lance: Yeah, now I’m curious. Would it have happened that fast no matter what? Or would it have taken longer if I hadn’t asked them to expedite it? I guess I’ll never know. Either way, though, it was a nice surprise.

  5. Anonymous

    Sounds like great customer service to me. I wonder if they are just saying 5-7 just in case things get crazy or if them escalating your case really did make it go faster. Either way seems like a good customer service experience.

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