It’s been a while since I blogged about any high interest savings accounts, so I thought I’d take some time and let you know about another Canadian high interest savings account I came across. My apologies to all you non-Canadians, I promise that eventually I will get around to reviewing some US or international high interest savings accounts. Now, let’s move on. The high interest savings account I’ll be introducing today is provided by a bank called Ally.
About Ally
After first hearing about Ally I straightaway hit Google and did some digging. I found out that Ally is a brand which belongs to a bank called ResMor Trust Company. ResMor Trust Company is a federally regulated trust company focused on providing residential mortgages, mortgage servicing and deposit products through independent brokers. It has more than $5 billion of mortgages under administration representing more than 33,000 homeowners, as of April 3, 2009. ResMor Trust also provides retail auto financing to consumers and commercial lending to auto dealers. ResMor Trust and Ally represent a re-branding of GMAC LLC’s banking arm. GMAC is more commonly known as “General Motors Acceptance Corp.” This Globe and Mail article points out that GMAC “was smacked around in the financial crisis and received rescue funds from Washington.” I’m not trying to scare you by mentioning this – just trying to make sure you know the full picture, that’s all.
But perhaps one (if not THE) of the most important details is that ResMor Trust is a member of the Canada Deposit Insurance Corporation (CDIC) So your money is about as safe as it can get. Just bear in mind however that CDIC covers balances of up to $100,000 max. For you married folks out there, you should know that you can get coverage of over $100,000 if you spread your cash over two savings accounts + some GICs.
Here’s how couples can use CDIC-eligible products and insure themselves up to $300,000:
- High Interest Savings Account: John Doe, $100,000
- GIC: Mary Doe, $50,000
- High Interest Savings Account: Mary Doe, $50,000
- High Interest Savings (Joint) Account: John and Mary Doe, $100,000
Total: $300,000
Details of Ally High interest savings account (HISA)
- Open with as little as $1
- No minimum balance
- No fees whatsoever
- Daily compounded interest for maximum earnings
- CDIC eligible
- 18 years or older to open
- Variable rate will go into effect when you make your opening deposit
- Online banking is available
Current Interest Rate
2.0% P.A
This rate is of course subject to change but according to my research this is the SECOND highest interest rate offered in Canada which is nothing to sneeze at. There is a competing bank which offers a slightly (and I do mean slightly) higher interest rate, but you have to make a few – in my opinion inconvenient – sacrifices to receive this rate. I shall not get into this at the moment. I’ll write a separate review of this competing bank I’m referring to.
Is my money safe with Ally?
I think it is, but I can’t go making any guarantees here. The institution behind the Ally brand has been around for a while, and Ally is a member of the CDIC system so in my book they’re about as safe as any bank can ever get. In the event of a catastrophic bank failure (heaven forbid) your account is insured up to a max of $100,000 by CDIC. You should also be aware that CDIC is a federal government institution. Some credit union based high interest savings accounts (most commonly from Alberta or Manitoba) offer a 100% deposit insurance guarantee, but this guarantee is offered via a private sector (i.e free market) institution. There is some merit to the argument that in times of dire need it may be better to have tax payers bail you out.
Negative points about Ally
If you reside in the wonderful province of Quebec I regret to inform you that Ally’s savings account offering is not available to you. On their website they say that “they’re working to bring their products to you” but it makes you wonder how long before that will materialize. For now if you reside in Quebec it would be wiser to park your money elsewhere.
My own experience with Ally
I cannot claim any experience with Ally’s product offerings. Although I definitely think their high interest savings account represents a great offering and without a doubt I can recommend them I for one will not be opening an account with them. After some careful consideration I decided to go with one of their competitor which offers a slightly better interest rate.
Conclusion
Ally represents a great offering to Canadian savers. The interest rate they provide is currently the second highest in Canada, they’re CDIC insured, and they provide all the typical features Canadian savers are used to. Although they do not offer the highest interest rate you still may want to chose them inspite of this fact. The competing institution offers a a rate of 2.10% BUT – and this could be a definite deal breaker for some – does not offer online banking capabilities. So those of you who absolutely cannot live without this feature can’t go wrong in parking some cash with Ally.
To open an account with Ally or to find out more info that I haven’t covered here please see their homepage at:
Stay tuned to this blog as I will be introducing this competing high interest savings account offering soon. Better yet how about you subscribe to my blog via RSS or mailing list! I would strongly recommend both, but it’s up to you in the end.
Ok, that does it for this post. I thank you for your attention.
Happy savings!