Ally Bank has launched a promotion offering a $250 bonus to customers making IRA contributions of $50,000 or more.
According to the bank’s website (www.ally.com), the deal applies to all IRA savings and CD accounts currently offered by Ally for Traditional, Roth or Self-Employed Pension IRA Plans.
Funding must be from non-Ally sources and may take the form of rollovers, trustee-to-trustee transfers and contributions.
A customer may meet the $50,000 funding goal by making a single deposit or multiple deposits, but Ally must receive the minimum amount by May 31.
The bonus will be paid in July into the account “that received the last transaction to reach the deposit required.”
And there’s only one bonus per customer.
Normally, cash bonus offers like this leave me cold.
I prefer rate bumps.
But Ally’s promotion merits consideration by IRA investors, particularly those seeking shorter-term yields significantly higher than offered at other depositary institutions.
Thus, based on Ally’s currently posted 0.99% APY, a customer opening a 12-month IRA CD in the amount of $50,000 would receive $497.45 in interest, plus the $250 cash bonus.
The $747.45 total would produce an APY of 1.49%, which compares quite favorably with the 1.10% APY currently shown as the top 12-month bank rate on our CD Rates Leaderboard.
Further, unlike some institutions, Ally charges no IRA maintenance or transfer fees.
There are technical issues involving locking in rates, making multiple deposits, transferring funds and other matters, some of which I’ve discussed with Ally customer service.
For example, Ally IRA CDs carry a rate guarantee that ensures that, if funding is received within 90 days of a CD’s opening, the customer will get the higher of the rate posted on the opening date and the rate posted on the date the funds are received.
Also, multiple CD funding can be accomplished either by opening separate IRA CDs or accumulating funds in an IRA savings account, then transferring the resulting balance into a single CD.
And remember, IRA transfers and rollovers can be paperwork-intensive and time-consuming (I know from experience). Ally warns that it “can take six weeks or longer.”
Anyway, interested readers should pursue technical issues directly with the bank in light of their own personal circumstances.
Unfortunately, because of my existing Ally IRA balances, I can’t participate without exceeding the FDIC’s $250,000 insurance limit for retirement accounts.
But for others, it seems worth taking a look.