Ally Online Savings/Money Market Rate Increases

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workoutexcite
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Re: Ally Online Savings Rate Increase

Post by workoutexcite »

Ron Ronnerson wrote: Fri Nov 11, 2022 12:27 pm I don’t know much about Brilliant Bank but they’re offering 4.01% on their money market account.

https://www.brilliant.bank/saving/
Thanks. tempting...
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anon_investor
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Re: Ally Online Savings Rate Increase

Post by anon_investor »

MrJones wrote: Sat Nov 12, 2022 1:05 am
LilyFleur wrote: Fri Nov 11, 2022 4:03 pm I'm reporting back to the group.

Schwab has easy buttons for building a Treasury ladder. No fees or commissions. (I just played with it but will complete the process in a week or so.)

Thanks to everyone who recommended this!
Good to know, thanks. Just tried it out, and it's pretty nice.

Any advice on what someone in CA can invest in to minimize taxes? Fed 24% + CA 9.3% bracket.
Buying T-Bills is a good option because the yield is exempt from state/local income taxes.

If you want easy, you can use a treasury only money market fund, the yield would be exempt from state/local income taxes. At Vanguard I use VUSXX, at Fidelity I use FDLXX and at Merrill Edge I use TTTXX.
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dwickenh
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Re: Ally Online Savings Rate Increase

Post by dwickenh »

Bask Bank is currently 3.60 interest rate for apy of 3.65. I've had my house money(300K) there since March 2022. They seem to increase rates before anyone else. There are some stipulations to work around. 100,000 limit per month going into the account unless you do it by phone with a rep. No problem taking it out and sending it to my Vanguard acct. I've never had an Ally account, but i'm sure they are fine.
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MrJones
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Re: Ally Online Savings Rate Increase

Post by MrJones »

anon_investor wrote: Sat Nov 12, 2022 9:08 am
MrJones wrote: Sat Nov 12, 2022 1:05 am Any advice on what someone in CA can invest in to minimize taxes? Fed 24% + CA 9.3% bracket.
Buying T-Bills is a good option because the yield is exempt from state/local income taxes.

If you want easy, you can use a treasury only money market fund, the yield would be exempt from state/local income taxes. At Vanguard I use VUSXX, at Fidelity I use FDLXX and at Merrill Edge I use TTTXX.
This is very helpful, thanks a ton! Switched to VUSXX for now, and will consider T-Bills soon.
safari
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Re: Ally Online Savings Rate Increase

Post by safari »

Ally's No Penalty CD rate is now 3.3%. Apparently Ally offers a 10 day best rate guarantee, so when the CD rate goes up within 10 days from opening an account, they are supposed to bump up the rate on the account to match the higher rate. I opened my No Penalty CD 9 days ago at 3.1%, and it still shows that rate on my account. Has anyone here had their CD rate automatically adjusted as part of the 10 day guarantee? I hate calling Ally, giving the long hold times. I guess I could just break my CD and open a new one, but wanted to hear about others' experiences first.
dink2win
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Re: Ally Online Savings Rate Increase

Post by dink2win »

I've had it happen before, they updated the rate on the 11th day. If you dont see a change in 2 weeks of when you opened it, you can either call them. The easier method is just to close and then reopen (no penalty after 7 days), takes like 2 minutes. Much less time than calling customer service.
MikeG62
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Re: Ally Online Savings Rate Increase

Post by MikeG62 »

3.30% in a no-penalty CD is simply not competitive given what can be earned in a premium MMF or short-term Treasuries.
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SmileyFace
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Re: Ally Online Savings Rate Increase

Post by SmileyFace »

Hopefully folks know the differences between savings deposit accounts and MMs and Treasuries. Folks always compare apples and oranges in terms of yield in these threads without mentioning the other differences.
safari
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Re: Ally Online Savings Rate Increase

Post by safari »

dink2win wrote: Thu Nov 17, 2022 7:23 pm I've had it happen before, they updated the rate on the 11th day. If you dont see a change in 2 weeks of when you opened it, you can either call them. The easier method is just to close and then reopen (no penalty after 7 days), takes like 2 minutes. Much less time than calling customer service.
The rate on my No Penalty CD has been adjusted to 3.3% when I checked it this morning.
TravelGeek
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Re: Ally Online Savings Rate Increase

Post by TravelGeek »

MikeG62 wrote: Fri Nov 18, 2022 7:08 am 3.30% in a no-penalty CD is simply not competitive given what can be earned in a premium MMF or short-term Treasuries.
It’s certainly competitive for those who just moved $50k or so to Ally to earn the 1% bonus.
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Re: Ally Online Savings Rate Increase

Post by MikeG62 »

TravelGeek wrote: Fri Nov 18, 2022 9:36 am
MikeG62 wrote: Fri Nov 18, 2022 7:08 am 3.30% in a no-penalty CD is simply not competitive given what can be earned in a premium MMF or short-term Treasuries.
It’s certainly competitive for those who just moved $50k or so to Ally to earn the 1% bonus.
Yup. Hopefully Ally considers it an “eligible account”. Lots of chatter on this board from folks who’ve been unable to get confirmation that it is eligible for the purposes of the bonus.

I moved $50K into my Ally account to get the bonus, but I’m not getting cute trying to scrape off a tad more yield by moving the funds around within Ally due to the risk of losing the bonus.
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PatrickA5
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Re: Ally Online Savings Rate Increase

Post by PatrickA5 »

MikeG62 wrote: Fri Nov 18, 2022 9:46 am
TravelGeek wrote: Fri Nov 18, 2022 9:36 am
MikeG62 wrote: Fri Nov 18, 2022 7:08 am 3.30% in a no-penalty CD is simply not competitive given what can be earned in a premium MMF or short-term Treasuries.
It’s certainly competitive for those who just moved $50k or so to Ally to earn the 1% bonus.
Yup. Hopefully Ally considers it an “eligible account”. Lots of chatter on this board from folks who’ve been unable to get confirmation that it is eligible for the purposes of the bonus.

I moved $50K into my Ally account to get the bonus, but I’m not getting cute trying to scrape off a tad more yield by moving the funds around within Ally due to the risk of losing the bonus.
Me either. I figure the savings account will probably be bumped up to 3% soon anyway.
indexfund56
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Re: Ally Online Savings Rate Increase

Post by indexfund56 »

Your Online Savings Account rate is increasing from 2.75% to 3.00% Annual Percentage Yield (APY) on all balance tiers. Your new APY goes into effect on 11/22/2022, and will appear in your account on 11/23/2022.
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zaplunken
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Re: Ally Online Savings Rate Increase

Post by zaplunken »

What's that for a $1.47 each month? 3%, they should be ashamed of themselves.
02nz
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Re: Ally Online Savings Rate Increase

Post by 02nz »

indexfund56 wrote: Mon Nov 21, 2022 4:11 pm Your Online Savings Account rate is increasing from 2.75% to 3.00% Annual Percentage Yield (APY) on all balance tiers. Your new APY goes into effect on 11/22/2022, and will appear in your account on 11/23/2022.
Nice of Ally to keep their rates competitive even though they have a fair amount of money "captive" right now due to the $500 promo.
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tennisplyr
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Re: Ally Online Savings Rate Increase

Post by tennisplyr »

Just notified, rate now 3.30% 🎉🎉
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Re: Ally Online Savings Rate Increase

Post by z3r0c00l »

tennisplyr wrote: Thu Dec 15, 2022 4:11 pm Just notified, rate now 3.30% 🎉🎉
Really nice jump! (10%) Glad to have my $10,000 for January's I-bond purchase hanging out here for a month.
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vanguard111
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Re: Ally Online Savings Rate Increase

Post by vanguard111 »

Ally no-penalty CD rate also increased, from 3.30% to 3.50%
Onlineid3089
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Re: Ally Online Savings Rate Increase

Post by Onlineid3089 »

02nz wrote: Mon Nov 21, 2022 4:17 pm
indexfund56 wrote: Mon Nov 21, 2022 4:11 pm Your Online Savings Account rate is increasing from 2.75% to 3.00% Annual Percentage Yield (APY) on all balance tiers. Your new APY goes into effect on 11/22/2022, and will appear in your account on 11/23/2022.
Nice of Ally to keep their rates competitive even though they have a fair amount of money "captive" right now due to the $500 promo.
I agree. When I moved some cash back to Ally for that I figured they'd be really slow to keep up with rates until that promo was about to end.
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anon_investor
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Re: Ally Online Savings Rate Increase

Post by anon_investor »

Onlineid3089 wrote: Fri Dec 16, 2022 8:24 am
02nz wrote: Mon Nov 21, 2022 4:17 pm
indexfund56 wrote: Mon Nov 21, 2022 4:11 pm Your Online Savings Account rate is increasing from 2.75% to 3.00% Annual Percentage Yield (APY) on all balance tiers. Your new APY goes into effect on 11/22/2022, and will appear in your account on 11/23/2022.
Nice of Ally to keep their rates competitive even though they have a fair amount of money "captive" right now due to the $500 promo.
I agree. When I moved some cash back to Ally for that I figured they'd be really slow to keep up with rates until that promo was about to end.
+1. Ally isn't keeping up with the money market fund (3.7%+) I transferred my funds from to Ally for that 1% bonus, but still nice to see they're up to 3.3%, they were under 3% only a little while ago.
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slowandsteadywins
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Re: Ally Online Savings Rate Increase

Post by slowandsteadywins »

Wealthfront Cash account, up to $2million FDIC insured, offering 3.80%APY; no minimums or transactions per month needed. FYI.
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Re: Ally Online Savings Rate Increase

Post by RickBoglehead »

vanguard111 wrote: Fri Dec 16, 2022 7:51 am Ally no-penalty CD rate also increased, from 3.30% to 3.50%
Yup. Just closed my 3.3% and opened the 3.5%. Holding funds there through end of bonus period 1/15/23.
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Re: Ally Online Savings Rate Increase

Post by the_wiki »

I will say I think it is absurd all these people hopping around and opening and closing accounts for a half or quarter of a percent here or there. How much money are you moving!? Even if it's $100k we are talking a few hundred bucks a year difference. Just not worth the hassle to me.
MrJedi
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Re: Ally Online Savings Rate Increase

Post by MrJedi »

the_wiki wrote: Fri Dec 16, 2022 10:10 am I will say I think it is absurd all these people hopping around and opening and closing accounts for a half or quarter of a percent here or there. How much money are you moving!? Even if it's $100k we are talking a few hundred bucks a year difference. Just not worth the hassle to me.
I agree to an extent. If I'm opening and closing accounts I'd rather get sign up bonuses. Much more value there if you're going through the hoops and ladders anyway.
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Re: Ally Online Savings Rate Increase

Post by TravelGeek »

the_wiki wrote: Fri Dec 16, 2022 10:10 am I will say I think it is absurd all these people hopping around and opening and closing accounts for a half or quarter of a percent here or there. How much money are you moving!? Even if it's $100k we are talking a few hundred bucks a year difference. Just not worth the hassle to me.

If the few hundred bucks require 10 hrs of work, it’s not worth it to me. If it means creating more accounts that need to be tracked and eventually closed, it’s not worth it to me. But closing my Ally CDs earlier this year and moving the funds to Fidelity to buy Treasuries? That was worth it. And moving some money back to Ally for the 1% bonus? That was worth it (no new account).
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Re: Ally Online Savings Rate Increase

Post by patrick »

the_wiki wrote: Fri Dec 16, 2022 10:10 am I will say I think it is absurd all these people hopping around and opening and closing accounts for a half or quarter of a percent here or there. How much money are you moving!? Even if it's $100k we are talking a few hundred bucks a year difference. Just not worth the hassle to me.
The current top savings account seems to be MySavingsDirect at 4.35%, which is 1.05% higher than Ally's 3.30%. I think an extra $1050 per year would be worth minimal effort it takes to open an account.

I prefer inflation protected bonds and so don't have enough cash for this to be an issue. What little I keep in cash is in accounts paying even higher interest on limited balances.
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zaplunken
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Re: Ally Online Savings Rate Increase

Post by zaplunken »

I am glad to see some people are questioning closing an account or moving an account for 25 or even 50 bp. Too many accounts to keep track of, too many rules to follow to get a bonus and all that for what? An extra $100 or $200? I suppose if you were working with a half a million or a million that would be a decent reward but I doubt many people would keep that much cash laying around unless they have millions in which case does an extra $1000 really make a difference in your life? Now getting cash out of online savings accounts and putting it into treasuries makes sense. In the end, it is your money but to me this is a silly exercise.
sampathk1
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Re: Ally Online Savings Rate Increase

Post by sampathk1 »

patrick wrote: Fri Dec 16, 2022 12:26 pm
the_wiki wrote: Fri Dec 16, 2022 10:10 am I will say I think it is absurd all these people hopping around and opening and closing accounts for a half or quarter of a percent here or there. How much money are you moving!? Even if it's $100k we are talking a few hundred bucks a year difference. Just not worth the hassle to me.
The current top savings account seems to be MySavingsDirect at 4.35%, which is 1.05% higher than Ally's 3.30%. I think an extra $1050 per year would be worth minimal effort it takes to open an account.

I prefer inflation protected bonds and so don't have enough cash for this to be an issue. What little I keep in cash is in accounts paying even higher interest on limited balances.
I believe MysavingsDirect does not allow ACH pull from other banks. You can only ACH send from MySavingsDirect to other banks. Why would they do this? Does not sound right.
vanguard111
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Re: Ally Online Savings Rate Increase

Post by vanguard111 »

"I believe MysavingsDirect does not allow ACH pull from other banks."

That is correct. MSD has a high rate, but is inconvenient to use because of this ACH restriction.
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Re: Ally Online Savings Rate Increase

Post by professor_americus »

Ally to 3.40%
All aboard the gravy train
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Chief_Engineer
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Re: Ally Online Savings Rate Increase

Post by Chief_Engineer »

I know rate increases are slowing down, but a 0.1% increase is not very exciting. I'm not planning to move anything, but I am noticing MMFs topping 4% while Ally is just now going to 3.4%.
Lastrun
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Re: Ally Online Savings Rate Increase

Post by Lastrun »

Chief_Engineer wrote: Tue Jan 31, 2023 4:49 pm ..... but a 0.1% increase is not very exciting. I'm not planning to move anything, but I am noticing MMFs topping 4% while Ally is just now going to 3.4%.
One of my bell weathers is Ken Tumin's Deposit Account's website. He has a splash page that shows the top 1% rate on savings accounts, which is currently showing 3.70% as the average. https://www.depositaccounts.com/ Ally has been at or above this tracking metric at some points during this rate cycle, but clearly behind it now and for a while. So not very exciting for sure.
TwstdSista
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Re: Ally Online Savings Rate Increase

Post by TwstdSista »

A rate increase of .1% is not enough to keep my funds there - my other HYSA is yielding 4%. I'm just waiting on the bonus and then I'll be moving my money and closing my Ally account.
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Re: Ally Online Savings Rate Increase

Post by Ron Ronnerson »

TwstdSista wrote: Wed Feb 01, 2023 4:10 am A rate increase of .1% is not enough to keep my funds there - my other HYSA is yielding 4%. I'm just waiting on the bonus and then I'll be moving my money and closing my Ally account.
If you might prefer over 5%, here’s an option to consider: https://primisbank.com/primis-savings-accounts/

Rates can always be lowered too, of course. I would personally keep the Ally account open just in case.
MikeG62
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Re: Ally Online Savings Rate Increase

Post by MikeG62 »

professor_americus wrote: Tue Jan 31, 2023 4:09 pm Ally to 3.40%
All aboard the gravy train
Yawn. One can get more than 4.20% in a MMF at Fidelity. Even 4-week Treasuries are yielding north of 4.50% (and this is even before the state tax benefit).

I moved most of my funds out of Ally the other day (well after the 1/15 date for the bonus).
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dcraider
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Re: Ally Online Savings Rate Increase

Post by dcraider »

MikeG62 wrote: Wed Feb 01, 2023 8:37 am
professor_americus wrote: Tue Jan 31, 2023 4:09 pm Ally to 3.40%
All aboard the gravy train
Yawn. One can get more than 4.20% in a MMF at Fidelity. Even 4-week Treasuries are yielding north of 4.50% (and this is even before the state tax benefit).

I moved most of my funds out of Ally the other day (well after the 1/15 date for the bonus).
If you moved it over to Fidelity MMF, you realize it carries an average exp. ratio of .42% (so lop that off your rate of return). The average annual return has been 1.84% on MMF including the Fidelity MMF for the year. Someone riding the wave up from Ally for past year would carry a higher return, and no exp fees. MMF are slightly better when there is monthly changing rates as the rate is variable. Not sure someone on Ally needs to change strategy for a slightly better rate after fees unless we are talking about $50K in a savings account.
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atdharris
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Re: Ally Online Savings Rate Increase

Post by atdharris »

My MMF is yielding ~4.2% and increasing every week. Right now, it is making my HYSA pretty irrelevant.
Scorpion Stare
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Re: Ally Online Savings Rate Increase

Post by Scorpion Stare »

dcraider wrote: Wed Feb 01, 2023 9:06 am If you moved it over to Fidelity MMF, you realize it carries an average exp. ratio of .42% (so lop that off your rate of return).
This is wrong. The quoted yields are already net of expenses.
dcraider wrote: Wed Feb 01, 2023 9:06 am The average annual return has been 1.84% on MMF including the Fidelity MMF for the year. Someone riding the wave up from Ally for past year would carry a higher return, and no exp fees.
Also wrong. The 1-year return for an Ally HYSA (1 Feb 2022 – 31 Jan 2023) is about 1.6%, based on the rate history from this thread. Recall that Ally rates were well under 1% for the first half of last year, and didn't break 2% until a few months ago.
Last edited by Scorpion Stare on Wed Feb 01, 2023 2:02 pm, edited 2 times in total.
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Kevin M
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Re: Ally Online Savings Rate Increase

Post by Kevin M »

Scorpion Stare wrote: Wed Feb 01, 2023 9:34 am
dcraider wrote: Wed Feb 01, 2023 9:06 am If you moved it over to Fidelity MMF, you realize it carries an average exp. ratio of .42% (so lop that off your rate of return).
This is wrong. The quoted yields are already net of expenses.
dcraider wrote: Wed Feb 01, 2023 9:06 am The average annual return has been 1.84% on MMF including the Fidelity MMF for the year. Someone riding the wave up from Ally for past year would carry a higher return, and no exp fees.
Also wrong. The 1-year return for an Ally HYSA is about 1.6%, based on the rate history from this thread. (Recall that Ally rates were well under 1% for the first half of last year, and didn't break 2% until just a few months ago.)
Yep. I transferred my first large chunk in 2022 to Vanguard Treasury MM fund on 7/29/2022. The taxable-equivalent yield (TEY) for me on that date was 1.84%, while the Ally savings rate was 1.15%.

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8301
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Re: Ally Online Savings Rate Increase

Post by 8301 »

How does investing in Vanguard Treasury VUSXX compare against buying T-bills on a regular basis (ladder)?
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GhostMang
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Re: Ally Online Savings Rate Increase

Post by GhostMang »

Moved Ally to Wealthfront for the 3.8%. It's 4.3% if I can ever find someone to accept an invite again. Unless someone can tell me something wrong with their HYSA I'm sticking with it for the foreseeable future.
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Re: Ally Online Savings Rate Increase

Post by Kevin M »

GhostMang wrote: Wed Feb 01, 2023 12:38 pm Moved Ally to Wealthfront for the 3.8%. It's 4.3% if I can ever find someone to accept an invite again. Unless someone can tell me something wrong with their HYSA I'm sticking with it for the foreseeable future.
Nothing wrong with it, but money market funds can have higher taxable-equivalent yields (TEYs), depending on your marginal tax rates. SEC yield of VUSXX was 4.32% yesterday, so already higher before factoring in the state income tax exemption. For me, the TEY of VUSXX is 4.90%.
If I make a calculation error, #Cruncher probably will let me know.
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GhostMang
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Re: Ally Online Savings Rate Increase

Post by GhostMang »

Kevin M wrote: Wed Feb 01, 2023 12:54 pm
GhostMang wrote: Wed Feb 01, 2023 12:38 pm Moved Ally to Wealthfront for the 3.8%. It's 4.3% if I can ever find someone to accept an invite again. Unless someone can tell me something wrong with their HYSA I'm sticking with it for the foreseeable future.
Nothing wrong with it, but money market funds can have higher taxable-equivalent yields (TEYs), depending on your marginal tax rates. SEC yield of VUSXX was 4.32% yesterday, so already higher before factoring in the state income tax exemption. For me, the TEY of VUSXX is 4.90%.
Good to know, will be moving over to that sooner than later I guess. Thanks
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Re: Ally Online Savings Rate Increase

Post by Super Hans »

8301 wrote: Wed Feb 01, 2023 12:34 pm How does investing in Vanguard Treasury VUSXX compare against buying T-bills on a regular basis (ladder)?
I think you'd squeeze out a little more from the T-bill ladder in exchange for the reduced liquidity. Ideally you'd have VUSXX or similar set up as your settlement fund. For some accounts, my settlement fund doesn't pay anything, so it's a small drag on performance--especially when I forget to check and leave cash sitting around for a bit.
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Re: Ally Online Savings Rate Increase

Post by Marseille07 »

Will be interesting how other banks respond after the 25 bps hike. I'm sure they're also raising soon.
8301
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Re: Ally Online Savings Rate Increase

Post by 8301 »

Super Hans wrote: Wed Feb 01, 2023 2:32 pm
8301 wrote: Wed Feb 01, 2023 12:34 pm How does investing in Vanguard Treasury VUSXX compare against buying T-bills on a regular basis (ladder)?
I think you'd squeeze out a little more from the T-bill ladder in exchange for the reduced liquidity. Ideally you'd have VUSXX or similar set up as your settlement fund. For some accounts, my settlement fund doesn't pay anything, so it's a small drag on performance--especially when I forget to check and leave cash sitting around for a bit.
I cannot think of any reason why I don't move the savings at Ally to VUSXX under the current interest environment. Is the yield delta between T-bills and VUSXX due to the recent interest trend or the expense ratio of VUSXX and will it ast?
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anon_investor
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Re: Ally Online Savings Rate Increase

Post by anon_investor »

MikeG62 wrote: Wed Feb 01, 2023 8:37 am
professor_americus wrote: Tue Jan 31, 2023 4:09 pm Ally to 3.40%
All aboard the gravy train
Yawn. One can get more than 4.20% in a MMF at Fidelity. Even 4-week Treasuries are yielding north of 4.50% (and this is even before the state tax benefit).

I moved most of my funds out of Ally the other day (well after the 1/15 date for the bonus).
Even FDLXX (Fidelity treasury only MMF) which is mostly exempt from state/local income taxes is over 4% now...
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Re: Ally Online Savings Rate Increase

Post by MikeG62 »

8301 wrote: Wed Feb 01, 2023 3:05 pm
Super Hans wrote: Wed Feb 01, 2023 2:32 pm
8301 wrote: Wed Feb 01, 2023 12:34 pm How does investing in Vanguard Treasury VUSXX compare against buying T-bills on a regular basis (ladder)?
I think you'd squeeze out a little more from the T-bill ladder in exchange for the reduced liquidity. Ideally you'd have VUSXX or similar set up as your settlement fund. For some accounts, my settlement fund doesn't pay anything, so it's a small drag on performance--especially when I forget to check and leave cash sitting around for a bit.
I cannot think of any reason why I don't move the savings at Ally to VUSXX under the current interest environment. Is the yield delta between T-bills and VUSXX due to the recent interest trend or the expense ratio of VUSXX and will it last?
This has been the case for months now (where MMF yields significantly exceed HYSA yields - at least those offered by Ally or Marcus). I would not expect it to suddenly change. But keep your eye on it.
Real Knowledge Comes Only From Experience
MikeG62
Posts: 5065
Joined: Tue Nov 15, 2016 2:20 pm
Location: New Jersey

Re: Ally Online Savings Rate Increase

Post by MikeG62 »

dcraider wrote: Wed Feb 01, 2023 9:06 am
MikeG62 wrote: Wed Feb 01, 2023 8:37 am
professor_americus wrote: Tue Jan 31, 2023 4:09 pm Ally to 3.40%
All aboard the gravy train
Yawn. One can get more than 4.20% in a MMF at Fidelity. Even 4-week Treasuries are yielding north of 4.50% (and this is even before the state tax benefit).

I moved most of my funds out of Ally the other day (well after the 1/15 date for the bonus).
If you moved it over to Fidelity MMF, you realize it carries an average exp. ratio of .42% (so lop that off your rate of return). The average annual return has been 1.84% on MMF including the Fidelity MMF for the year. Someone riding the wave up from Ally for past year would carry a higher return, and no exp fees. MMF are slightly better when there is monthly changing rates as the rate is variable. Not sure someone on Ally needs to change strategy for a slightly better rate after fees unless we are talking about $50K in a savings account.
Scorpion Stare addressed your comment. Yields are "after" expenses. Focus should be in the current 7-day yield (and not trailing average annual return) compared to the HYSA yield. After all, these are cash equivalents not long term investments.
Real Knowledge Comes Only From Experience
8301
Posts: 942
Joined: Thu Dec 22, 2022 1:52 pm

Re: Ally Online Savings Rate Increase

Post by 8301 »

MikeG62 wrote: Wed Feb 01, 2023 4:34 pm
8301 wrote: Wed Feb 01, 2023 3:05 pm
Super Hans wrote: Wed Feb 01, 2023 2:32 pm
8301 wrote: Wed Feb 01, 2023 12:34 pm How does investing in Vanguard Treasury VUSXX compare against buying T-bills on a regular basis (ladder)?
I think you'd squeeze out a little more from the T-bill ladder in exchange for the reduced liquidity. Ideally you'd have VUSXX or similar set up as your settlement fund. For some accounts, my settlement fund doesn't pay anything, so it's a small drag on performance--especially when I forget to check and leave cash sitting around for a bit.
I cannot think of any reason why I don't move the savings at Ally to VUSXX under the current interest environment. Is the yield delta between T-bills and VUSXX due to the recent interest trend or the expense ratio of VUSXX and will it last?
This has been the case for months now (where MMF yields significantly exceed HYSA yields - at least those offered by Ally or Marcus). I would not expect it to suddenly change. But keep your eye on it.
I bought some 17-week T-bills from today's auction. High rate is 4.625% and investment rate is 4.762%. I don't know what the equivalent APY is.
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