Ally Bank IRA CD and Savings Account Bonus: Up To $500 In Cash

This post is part of our series on IRA & Brokerage bonuses. Every Tuesday we share another bonus with you.

The Offer

Continuing our series of IRA and Brokerage account bonuses, Ally Bank is offering a tiered deposit bonus in the form of cash for new or existing customers who make a qualifying rollover or transfer from outside Ally Bank to an Ally IRA CD or IRA Online Savings Account.

Ally Bank has grown in both esteem and user popularity in recent years. In 2014, for the fourth consecutive year, Money Magazine named Ally “Best Online Bank” in their feature of “The Best Banks in America.”

Qualifying Products and Interest Rates Offered

IRA High Yield CD:

Holding Duration	APY %
5-Year	2.00
3-Year	1.40
18-Month	1.04
12-Month	1.05
9-Month	0.65
6-Month	0.60
3-Month	0.30

IRA Raise Your Rate CD:

Holding Duration	APY %
4-Year	1.30
2-Year	1.29

An Ally Raise Your Rate CD confers the ability to raise your interest rate either once within a holding duration of 2 years, or twice within a duration of 4 years if Ally increases their CD rate.

IRA Online Savings:

APY %

0.99

 

None of the above three accounts have either minimum opening deposits or maintenance fees. However, take note of penalties for early withdrawal of CD funds.

Rates pulled from Ally 1/19/2015 and are subject to change

Deposit Bonus up to $500

Bonus	Deposit	Receive	Return on Investment (pre-tax guideline)
Deposit Bonus up to $500	$25,000+	$100	.4%
	$50,000+	$250	.5%
	$200,000+	$500	.25%

Direct link 1

To receive this bonus you must do the following:

• Make a qualifying contribution, rollover, or trustee-to-trustee transfer from outside Ally Bank between 1/1/15 and 5/31/15. Qualifying funds must post to your account by 5/31/2015.

Rules:

• Offer expires 5/31/2015.
• You may make multiple deposits to your Traditional, Roth, and SEP IRA Plans to meet the qualifying deposit requirement.
• Your bonus will be paid by 7/31/2015 into the Ally IRA Online Savings Account or IRA CD that received the last transaction to reach the deposit requirement. This bonus will not apply to the contribution limit.
• Consult your tax professional for tax consequences regarding the “one rollover per year” rule.
• You must maintain the qualifying funds until the bonus is paid.
• Limit one bonus per new or existing customer.
• IRA deposit transactions involving the transfer or rollover of funds from other financial institutions may take up to six weeks or longer.

The Verdict

I am an admirer of Ally Bank due to a) the excellent user experience of its web interface and b) comparatively decent interest rates for an online bank. That said, given the ~1-1.3% rate of return you can expect from an Ally IRA CD or Savings Account, you should assess whether your investor profile and retirement portfolio could do with Ally’s low-risk IRA products, or a higher risk, higher return product.

Ally’s IRA products are low-risk because they are FDIC-insured and confer stable but lower returns that are ideal for the soon to be retired, the risk averse, and those who wish to supplement a portfolio of more volatile assets. The average investor would more likely designate one of the Ally IRA products as a supplemental retirement savings vehicle as opposed to an exclusive retirement vehicle. Ally itself notes that its IRA products can be used to “round out your other investments.” When in doubt, consult a professional as to which retirement vehicles can best complement your existing portfolio.

If what you desire is a complete rollover of retirement assets from one institution to another where you can experience sizable growth, an IRA CD or IRA Savings Account is not likely to meet your expectations of significant returns in the long run. The short-term bonus certainly won’t mitigate for the loss of long-term retirement gains.

Additionally, note that the three accounts offered here (High Yield CD, Raise Your Rate CD, and Online Savings) are also available at Ally as regular, non-IRA accounts, and at the same rates of return, without the contribution and withdrawal limitations imposed by an IRA account.