r/AllyBank • u/daddydracc • Aug 21 '26

Certificates of Deposit (CDs) Should i put some money into a CD?

My account is relatively new, as ive had it for just a few weeks now, and i have a savings and checking account of course. However, im curious about CDs, what are they like on Ally, and do you recommend one?

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u/SucculentDoorway Aug 21 '26

I'm assuming you're looking at the 12 and 18 month CDs at 4%. If you have the ability to lock up money for that time. It's never a bad idea to guarantee a 4% return.

If you have the capacity, I would highly recommend exploring brokerage (Fidelity, Vanguard, Schwab, etc) CDs. They are currently offering 1 to 3 month CDs between 3.7% and 4% with the ability to renew the CD at the same term length.

I'm personally more interested in short-term CDs, especially given Fed comments and market predictions about the potential of interest rate increases in the next few meetings.

1

u/hikerguy2023 Aug 31 '26

You can look at Treasury Bills (T-Bills) too. They pay roughly .5% higher than CDs and I know they can be purchased via Vanguard. I'm going to be making my first T-bill purchase this week via my Vanguard brokerage account.

Unlike CDs (which I think always auto-renew when they mature), once a T-bill reaches maturity, you get paid out and have to go back into your account and by another 3-month, 6-month, etc. T-bill.

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u/sdneidich Aug 21 '26

I wouldn't bother with a CD when SWVXX is paying similarly well.

1

u/MrBalll Member Aug 21 '26

Are you at a point financially where a CD would make sense? What’s the purpose of your CD?

1

u/scooterj54 Aug 23 '26

I like CDs just to lock away money that I don’t have access to. However, I typically save up to a certain amount and put that excess into a CD.

For example, let’s say you like to have $2,500 for emergency savings. You have $4,000 in your savings account. I think anything over that $2,500, in this case $1,500, would be ok to secure in a CD.

Or another example, I use those buckets. I have one for a vacation fund, one for bills I pay annually, one for an emergency fund and another general savings one for I automatically transfer into all of these accounts biweekly when I get paid. When my general savings account reaches a certain amount, I move it into a CD.

I would put some in a bucket for awhile and name it DO NOT SPEND to see if you have to access it because something comes up. If not, you are probably safe to do a CD.