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Wednesday, November 4, 2009

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.


Patrick said...

I don't buy it. These rates won't last long. When banks offer mortgages for 2.25% these days, how can they make any money paying 2% on deposits?

Jim Somerville said...

Patrick, the rate you quote is for variable, most sheeple get conned into going for the five year fixed rate which is a lot higher.

But that said, I'm still somewhat skeptical that their 2% rate will hold for any real length of time. We'll just have to see.