My love is like a possum.
From time to time it plays dead,
but only to protect itself from being devoured.
January 16, 2011
January 07, 2011
Ally
I heard about Ally a while back, but their interest rate of 2% didn't compel me since I still get that in the TFSA I have with ING. But today I accidentally clicked on an Ally Google Ad and decided that this was enough reason to read their blurb. What did interest me, that ING does not offer was two things. First, that Ally offers a daily compound rate, unlike ING and most other banks which offer monthly compound rates. The second being that if you are idle long enough, the Ally site will ask you if you'd like to chat live. Many online applications offer this function, but online banks like ING and PC Financial don't. I like this a lot, because the rep can walk you through any thing you like with out you having to search their whole website!
However, at this time Ally only offers savings and GIC investments, which is limiting, though they are CDIC insured.
The thing that Ally lacked, which ING is good for, is comparative calculators. So I made my own on Excel. Below are the results:
I deposit $10 000 on January 1st.
To ensure the two calculations were comparable, I calculated a month as 30 days and a year as 360 days.
Formula for monthly compound interest:
(b*i/a)m
where,
b=balance, initial balance=10,000
i=interest, 0.02
a=year, 360 days
m=month, 30 days
Then this calculation is replicated until there is a total of 12 monthly interest payments.
Formula for daily compound interest:
(b*i/a)
b=balance, initial balance=10,000
i=interest, 0.02
a=year, 360 days
Then this calculation is replicated until there is a total of 360 daily interest payments.
Results:
Final Balance for Monthly Compound Interest: $10 184.87
Final Balance for Daily Compound Interest: $10 201.44
That's a difference of $16.57. That's a low estimate, you can add 2.5 for the five days of the year you would actually get interest, and compounding that makes no big difference any ways.
So, in the end, I don't think it's worth going to Ally for the extra 20 bucks a year, if you happen to have $10 000 bucks that you you don't wanna spend or invest otherwise...
However, at this time Ally only offers savings and GIC investments, which is limiting, though they are CDIC insured.
The thing that Ally lacked, which ING is good for, is comparative calculators. So I made my own on Excel. Below are the results:
I deposit $10 000 on January 1st.
To ensure the two calculations were comparable, I calculated a month as 30 days and a year as 360 days.
Formula for monthly compound interest:
(b*i/a)m
where,
b=balance, initial balance=10,000
i=interest, 0.02
a=year, 360 days
m=month, 30 days
Then this calculation is replicated until there is a total of 12 monthly interest payments.
Formula for daily compound interest:
(b*i/a)
b=balance, initial balance=10,000
i=interest, 0.02
a=year, 360 days
Then this calculation is replicated until there is a total of 360 daily interest payments.
Results:
Final Balance for Monthly Compound Interest: $10 184.87
Final Balance for Daily Compound Interest: $10 201.44
That's a difference of $16.57. That's a low estimate, you can add 2.5 for the five days of the year you would actually get interest, and compounding that makes no big difference any ways.
So, in the end, I don't think it's worth going to Ally for the extra 20 bucks a year, if you happen to have $10 000 bucks that you you don't wanna spend or invest otherwise...
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