Ally Bank Rates

What's the difference between a Savings, Money Market, Checking, and CD Account?

Although bank accounts can differ greatly in their features, the most common fall into one of these categories:

Savings Accounts are bank accounts that earn interest and usually limit you to six transactions per month. They may include a bank card which generally only allows you to withdraw money at ATMs.

Money Market Accounts are like savings accounts in that they earn interest and limit you to six transactions per month. However, in addition, they often have some sort of checking capabilities, and include a debit card that will both work at ATMs and let you make debit purchases at stores.

Checking Accounts are bank accounts that allow you to make an unlimited or high number of transactions each month. They typically also include a debit card for ATM withdrawals and purchases at stores, but standard checking accounts generally don't pay as high interest as savings or money market accounts.

Certificates of Deposits (or CDs) are bank accounts that lock in a set interest rate for a specific term. However, they generally don't let you make any transactions or withdraw money from the account until the end of the term. However, recently some banks began offering special CD accounts that allow certain types of withdrawals or deposits in the middle of the term.

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What's an APY?

Bank accounts that earn interest all have rates associated with them that help you understand how much money the bank is paying you to save your cash in their particular account.

The APY (which is an abbreviation for "Annual Percentage Yield") is a measure of how much additional money you'd have if you kept your money in the account for 1 year and the APY didn't change. For instance, if the APY is 2%, and you started with $1,000 in your account, you'd have about $1,020 at the end of the year, barring any fees, withdrawals, or rate changes.

The APY is slightly different than the APR (Annual Percentage Rate) which you may also see on your statement. APRs can be confusing because a 2% APR might yield more or less interest than a different bank's 2% APR depending on their interest accrual and calculation policies. For that reason, APY is generally a better measure for comparing bank accounts interest rates.

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What's a rate alert?

When you select the "Watch Account" button, you'll be signed up to receive an email alert every time the bank changes the rate on this account.

Rate alerts on savings accounts are useful to make sure your bank doesn't reduce your interest rate below what's standard at other banks.

Rate alerts are also a good way to keep updated when your bank offers a great rate on a CD or new account to attract new money.

View a sample alert that you would receive if your bank lowers your rate.

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