Ally "Bank" Sets up Shop

There's a "new" financial player in the high interest savings account game these days. Perhaps you've seen their ads on tv, one of which has a man taking a toy truck away from a boy and giving him a cardboard cutout of one instead. Many of us can relate to this as we've watched the interest rates on our savings accounts head downward even as the Bank of Canada rate has held steady. Ally promises to be different, but we'll have to see. They are currently offering 2% on their high interest savings accounts, which is almost double the rate offered by the likes of ING Direct. Triple the now pathetic 0.65% offered by Altamira Cashperformer, now owned by the National Bank of Canada.

Ally appears to operate much like ING Direct, with electronic linked access to your regular bank account. They promise no fees. They also claim that interest is compounded daily. They are CDIC insured up to the usual $100K. Ally is currently a product of ResMor Trust, so if you already have financial deposits with ResMor, you may want to pay attention to the fact that the insurance limit refers to all of your ResMor holdings. You can read more about them here.

I think they deserve our business as many of the other players now are paying rates close to the "big banks" that they like to mock in their ads. When it comes to your savings, you really should pay attention and shop around.

Get $200 Free from TD Canada Trust

TD Canada Trust have just introduced their "Simply Save" program. This program is a lot like Scotiabank's "Bank The Rest" program, which is really designed to just trigger more overdraft protection service fees on their poorest customers. You can read my previous blog entry on that if you like. In a nutshell, every time you use your atm card, be it for cash withdrawal or debit purchases, you can designate an amount of money to be transferred into a savings account. So it is just an automatic way to transfer money out of your chequing account and into a restrictive savings account with high fees. Such a savings account typically allows one free withdrawal per month, with a $10 fee for any subsequent withdrawals. So be careful if you have such a savings account, read the fine print.

For a limited time (to July 24, 2009), if you sign up for this program, TD will give you $10 (up to a maximum of $200) over the next year, for every $100 you manage to transfer to yourself. If you set up the plan to transfer the plan maximum of $5 every time you use your card, then it will take 20 transactions to save $100. So that's 20 transactions for the bank to give you a free $10, or in other words, the bank will pay you 50 cents every time you use your card for the next year. That's pretty darn sweet. So essentially if you shuffle $2K to yourself using 400 transactions next year, the bank gives you $200. To put it in perspective, you'd have to have a $10,000 GIC at 2% for a year to make $200. It's like the bank is setting aside 10 grand for you.

Don't forget to pull your savings out once a month and transfer them to some CDIC insured bank such as Canadian Tire Financial Services who will actually pay you some decent interest on the money. This will minimize the opportunity cost of your $2K used in the scheme.