Comments on: Ally CD yield no longer tops, but the terms are better http://geographic-independence.com/ally-cd-yield-no-longer-tops-but-the-terms-are-better/ The driver behind our financial goals Thu, 26 Jan 2012 23:30:23 +0000 hourly 1 http://wordpress.org/?v=3.1 By: davmp http://geographic-independence.com/ally-cd-yield-no-longer-tops-but-the-terms-are-better/#comment-567 davmp Fri, 28 Aug 2009 15:08:31 +0000 http://geographic-independence.com/?p=701#comment-567 Hi Brandon, I agree that it probably isn't worth shopping around if the terms aren't critically different or the change in earned interest isn't significant. (Where "significant" probably varies a bit from person to person.) Certainly, you'd need alot of money on deposit for a basis point or two to be significant to most people. (A basis point increase in APY on a $1,000 deposit only earns you an extra $0.10 per year.) The latter is why I've been focusing on the change in terms every time I talk about Ally, though it sure didn't hurt that the yields were higher either. Now that the yield difference is inverting, I'm asking the question at what point is it worth it to switch? From my own past history on this blog, I am willing to move funds, between products that have similar terms, if the difference is around 15 to 20 basis points (which may or may not tell you how much money we have in our EF fund.) I'm even willing to open new accounts if the difference is not much more than that, after all it's only a 10-minute process to open new online accounts now days. How should that change when the comparison isn't apples-to-apples though? I certainly do hope that my rate surveys prove useful to you and other readers! They don't take me too long to conduct and write up, and besides providing content for the blog, they help me organize my thoughts and keep track of my own behavior. I believe we're earning almost a full percent more on our funds than we were prior to starting to pay attention to this, which is a nice bump to us. Perhaps one day you will see a "significant" spread here and migrate your funds? As to optimizing time spent on tasks, that's a very good point and one everyone should factor in to how they choose to spend their time. But keep in mind that there may be additional, non-easily-measured-as-cash values involved in the choices too. There's also only so much time one can spend on certain tasks (options trading, startup business) without burning out. Hi Brandon, I agree that it probably isn’t worth shopping around if the terms aren’t critically different or the change in earned interest isn’t significant. (Where “significant” probably varies a bit from person to person.) Certainly, you’d need alot of money on deposit for a basis point or two to be significant to most people. (A basis point increase in APY on a $1,000 deposit only earns you an extra $0.10 per year.) The latter is why I’ve been focusing on the change in terms every time I talk about Ally, though it sure didn’t hurt that the yields were higher either. Now that the yield difference is inverting, I’m asking the question at what point is it worth it to switch? From my own past history on this blog, I am willing to move funds, between products that have similar terms, if the difference is around 15 to 20 basis points (which may or may not tell you how much money we have in our EF fund.) I’m even willing to open new accounts if the difference is not much more than that, after all it’s only a 10-minute process to open new online accounts now days. How should that change when the comparison isn’t apples-to-apples though?

I certainly do hope that my rate surveys prove useful to you and other readers! They don’t take me too long to conduct and write up, and besides providing content for the blog, they help me organize my thoughts and keep track of my own behavior. I believe we’re earning almost a full percent more on our funds than we were prior to starting to pay attention to this, which is a nice bump to us. Perhaps one day you will see a “significant” spread here and migrate your funds?

As to optimizing time spent on tasks, that’s a very good point and one everyone should factor in to how they choose to spend their time. But keep in mind that there may be additional, non-easily-measured-as-cash values involved in the choices too. There’s also only so much time one can spend on certain tasks (options trading, startup business) without burning out.

]]> By: Brandon http://geographic-independence.com/ally-cd-yield-no-longer-tops-but-the-terms-are-better/#comment-566 Brandon Thu, 27 Aug 2009 20:21:34 +0000 http://geographic-independence.com/?p=701#comment-566 Shopping around for a basis point or two seems or marginally better terms seems to be not worth the time -- depending on how much money you're stashing away. Small amount of money and short time frame means small deviations in rates have little effect on your bottom line. Then the question becomes, is the time better spent refining your options trading strategies or working on your other business ideas. From my perspective, the answer to that question, is yes. However, there's the one wildcard -- this blog. The blog needs fresh content to drive eyeballs and ad revenue. So, the CD rate research has an additional monetary benefit to you that the rest of us don't get and that probably makes it worth it to you. For me, I've been continuing with my standard CD ladder at my credit union -- even as you blogged about compelling reasons to switch to Ally. The question for me is at what rate spread would make it compelling to open a new account at a new bank. I don't know what that number is, but I think it's pretty substantial and as yet, I haven't seen it. Shopping around for a basis point or two seems or marginally better terms seems to be not worth the time — depending on how much money you’re stashing away. Small amount of money and short time frame means small deviations in rates have little effect on your bottom line. Then the question becomes, is the time better spent refining your options trading strategies or working on your other business ideas. From my perspective, the answer to that question, is yes.

However, there’s the one wildcard — this blog. The blog needs fresh content to drive eyeballs and ad revenue. So, the CD rate research has an additional monetary benefit to you that the rest of us don’t get and that probably makes it worth it to you.

For me, I’ve been continuing with my standard CD ladder at my credit union — even as you blogged about compelling reasons to switch to Ally. The question for me is at what rate spread would make it compelling to open a new account at a new bank. I don’t know what that number is, but I think it’s pretty substantial and as yet, I haven’t seen it.

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