Ally dropped HISA rate from 2% to 1.8% | General comparisons | Discussion forum

I think they may have had to - they didn't pass the so-called "stress test" in the U.S. and maybe Canada too, which I presume has to do with capital adequacy and spreads between deposits and advances (loans/mortgages/lines of credit). They did go for three years at 2% unlike Hubert which bounced every few months.

I'm considering pulling all my money out and putting it in some conservative, fixed-income (likely corporate bond, preferred share) ETFs yielding between 5-8%. There is some risk of capital loss but should be minimal. Beyond that, I might take advantage of HSBC's 1% on bonus interest on "New Money" not on deposit as of June 1/2012 until Sept 30/2012 which would put it at 2.2% and then pull it out come Sept 30th.

Cheers,
Doug

Hi NorthernRaven,

What I've anecdotally and in news reports is that OSFI, the Canadian regulator, may not have liked what they saw in looking at the balance sheet and financial statements of ResMor (Ally Canada), that's what I meant.

Cheers,
Doug

I believe the capital adequacy of Ally Canada may have been called into question by OSFI and that was likely the reason they've sold off their (ResMor Trust Company) mortgage portfolio to MCAP, I believe. As well, they likely weren't generating a profit from the higher than average rates they were paying on deposits as their spreads must've been razor then. On the other hand, they tended to lend to higher risk, subprime borrowers plus with their auto financing business, their lending rates would've been higher. Having said that though, with those being higher risk businesses, OSFI would've likely had them carry/maintain excess capital that would've normally been required (something to do with "risk-weighted assets") so yeah, you might be right, maybe it wasn't just OSFI that thought it would be prudent but Ally as well?

Don't get me wrong: I love Ally and you know me, I am the first to defend them against the "flame wars" that tend to start about their association their parent company, Ally Financial (formerly GMAC). They're fairly safe - I still would stay within my CDIC limits but yeah, there's very little concern with them. I do feel safer with them than with ING for some reason but again that's just a 'gut feeling', not based on anything really.

Cheers,
Doug

guest1 said

Doug said
I might take advantage of HSBC's 1% on bonus interest on "New Money" not on deposit as of June 1/2012 until Sept 30/2012 which would put it at 2.2% and then pull it out come Sept 30th.

Cheers,
Doug

I no longer see this promotion on their website and the customer service rep told me they already ended it early. Is that true?

Yes, that's partially true. The company ended the promotion early, in or around mid-August 2012. However, they stated they'd honour existing commitments through the end of September 2012 for clients that had brought in "new money" (that is, not on deposit from the "effective date" at the beginning of June).

Cheers,
Doug