New Ally Bank Bonus Offer

**ua_guy** · 10-12-2022, 08:37 AM

Thanks for the heads-up. We are looking at current offers to move our money from a very low-interest savings, so will consider Ally in the mix overall. HOWEVER, considering the health of any banks we move our money to is also something to consider. I know Ally was big in the auto business for a long time, and this seems to suggest they might be in for some trouble?

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https://seekingalpha.com/article/4542326-ally-financial-bankruptcy-risk-grows-auto-market-declines

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**rennigade** · 10-12-2022, 09:26 AM

Id rather sign up for a credit card that has a bonus offer of $500 or more when you spend $3k in 3 months. $50k is a lot to tie up...not to mention most people do not have $50k in liquid cash.

I still believe in the market. I still think these short term money grabs are penny wise pound foolish. I would much rather take a couple grand from that $50k and put it in the market. A couple of my friends my age (40) are jumping on ibonds instead of investing in the market. They have no major purchases coming up where they will need a lot of money near term. They're cash heavy and invest very little in the market, but they think the $900 or whatever they'll make off $10k is amazing. I just think its short sighted...especially for someone who still youngish (yeah, myself and friends are now middle aged I suppose.)

edit: This was a capital one venture card my wife and I signed up for a couple months ago. Spend $4k in 3 months, get points, redeem for whatever. We redeemed for gift cards...around $625 each I believe. I already cancelled the card. Travel redemption was better but we already have a ton of american airline miles. https://slickdeals.net/f/15793171-ca...78b2e77afd11f7

**ua_guy** · 10-12-2022, 12:36 PM

Originally posted by rennigade View Post

They're cash heavy and invest very little in the market, but they think the $900 or whatever they'll make off $10k is amazing. I just think its short sighted...especially for someone who still youngish (yeah, myself and friends are now middle aged I suppose.)

Making 9% is actually pretty good considering most people's investments "set-it and forget-it funds" in the stock market are down ~10%. And 9% would be more than the historical average return of what, 6 or 8%?

**disneysteve** · 10-12-2022, 05:14 PM

Originally posted by rennigade View Post

I still believe in the market. I still think these short term money grabs are penny wise pound foolish. I would much rather take a couple grand from that $50k and put it in the market.

Just because I believe in the market doesn't mean I don't also have cash to invest. Our AA target is 60/40. With a $3 million+ portfolio, that means around $1.2 million for cash and fixed income investments. It makes sense to seek the best rates and deals for that money, doesn't it?

**kork13** · 10-13-2022, 03:02 PM

I went ahead & at least signed up for it. I moved $4600 from my brokerage MM over (no immediate plans for it), and cashed $200 of credit card rewards into my savings account. I'll look around to see if I have any other random cash lying around somewhere that can be easily moved over.

It's only gonna net me a $45-$50 bonus probably, but for the cost of a few clicks, I'll take advantage.

**jenn_jenn** · 10-14-2022, 10:38 AM

Thank you for posting this!

We decided to take advantage of this offer. We might move our cash after 1/15/2023 but it was a no brainer for us at this point. Easy extra $500.

**disneysteve** · 10-14-2022, 11:59 AM

Ignore this. Kork corrected me below. The Ally deal is a good one.

This really isn't that great of a deal. They're giving a 1% bonus on deposits up to $50,000 if you leave the money in for 3 months.

Their current rate is 2.25%. With the bonus, that gets you 3.25%.

However, right now 3-month T bills are paying 3.80% and that interest is free from state and local taxes making the effective yield even higher. Just buy a 3-month T bill and you'll come out ahead. The only way the Ally deal wins if if rates continue to rise quickly enough to offset the higher fixed rate of the T bill, which is possible but unlikely.

**jenn_jenn** · 10-14-2022, 12:33 PM

Originally posted by disneysteve View Post

This really isn't that great of a deal. They're giving a 1% bonus on deposits up to $50,000 if you leave the money in for 3 months.

Their current rate is 2.25%. With the bonus, that gets you 3.25%.

However, right now 3-month T bills are paying 3.80% and that interest is free from state and local taxes making the effective yield even higher. Just buy a 3-month T bill and you'll come out ahead. The only way the Ally deal wins if if rates continue to rise quickly enough to offset the higher fixed rate of the T bill, which is possible but unlikely.

We’ve moved a good chunk of our emergency fund over to T bills but we still like to have cash.

**disneysteve** · 10-14-2022, 12:34 PM

Originally posted by jenn_jenn View Post

We’ve moved a good chunk of our emergency fund over to T bills but we still like to have cash.

Makes sense. If the need arises, easier to pull money out of Ally. You'd lose some of the bonus but there's no way to know what you'd lose selling the T bill on the secondary market.

**kork13** · 10-14-2022, 12:58 PM

Originally posted by disneysteve View Post

This really isn't that great of a deal. They're giving a 1% bonus on deposits up to $50,000 if you leave the money in for 3 months.

Their current rate is 2.25%. With the bonus, that gets you 3.25%.

Not quite -- it's not a 1% interest boost, it's a 1% cash bonus. So if I put in $5k, they give me $50 (1% of $5000). If the requirement was to keep it in for 1yr, you'd be right. But for just 3 months, it's much better.

2.25% on $5k for 3 months earns ~$28. Add the $50 bonus, and you have an effective return of ~4.75%.

The math gets better with bigger numbers. $50k deposit results in a roughly 5.25% return.

**disneysteve** · 10-14-2022, 01:44 PM

Thanks for correcting my math, kork.

Never mind

**skives** · 10-15-2022, 01:15 AM

Just took advantage of this offer. After 1/15/23 I’ll pull my money out and do the Chase $600 checking and savings offer. Free money.

**Drake3287** · 10-16-2022, 04:31 PM

Originally posted by skives View Post

Just took advantage of this offer. After 1/15/23 I’ll pull my money out and do the Chase $600 checking and savings offer. Free money.

I did also, had $50,000. available so I opened another Ally account. By Feb 15th it'll be an easy extra $1,000 between the interest and bonus and I'll do something else with it then. I have to admit, I'm not sure how these banks can offer all these $500. bonuses, in 3 short months Ally will be paying out millions of dollars on these bonus. I fully expect Capitol One to offer something similar in the near future. My originally Capital One account came with a $1,000. bonus for a $100k deposit. Another nice find.

**disneysteve** · 10-16-2022, 04:39 PM

Originally posted by Drake3287 View Post

I'm not sure how these banks can offer all these $500. bonuses

Many customers won't deposit the full 50K so they'll get bonuses but smaller ones.

After that, inertia takes over. Ally knows that many customers will leave the money there long term so they benefit from all of that fresh cash.

Also, with short-term interest rates now over 4% and some intermediate term agency bonds over 5% and approaching 6%, Ally can invest this new money risk-free and just about break even. Of course, if they use the money for mortgages and other lending, they do even better.

New Ally Bank Bonus Offer