Ally Overdraft Transfer Service

Submitted by floofer-roofer t3_z785ag in personalfinance

I’m pretty new to Ally, just opened both a checking and savings account. What I’m confused about is this overdraft transfer service - there’s a transfer limit on the savings account of 6 per month, but they’re reimbursing fees for transfers that go above that. So, my plan is to keep all of my money in the savings account, to get the interest, and turn on overdraft transfer service and use it endlessly. Basically using the savings account as a checking account, so it gets the HYSA interest rate…is there something wrong with this? Am I missing something?

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Werewolfdad t1_iy5756a wrote

From their deposit agreement

>If you exceed the transaction limits on more than an occasional basis, we may restrict your ability to withdraw money from that account, or we may close your account. If the account we close is an IRA savings account, you may be subject to IRS penalties

https://www.ally.com/content/dam/pdf/bank/ally-bank-deposit-agreement.pdf

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floofer-roofer OP t1_iy58h72 wrote

Is there any reason to actually follow this? Is this something people have experienced?

The message I get on the website about it says “Due to federal regulation changes, we’re currently not applying limits, and we are temporarily refunding fees associated with such withdrawals and transfers”. This reads as if there isn’t a limit and its not frowned upon to transfer as much as you’d like.

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Werewolfdad t1_iy58mcw wrote

The program is new. Go ahead and test it, even though they are telling you they will close your account if you use it too much.

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floofer-roofer OP t1_iy5a5o7 wrote

I thought I saw somewhere it’s been around since COVID, so I thought it has been around for a year or more. I guess my confusion is that sure it says that in the fine print, but in the more obvious definition of the program it has a different tune about using it…so I’m wondering, which is it?

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Werewolfdad t1_iy5ag41 wrote

> I thought I saw somewhere it’s been around since COVID, so I thought it has been around for a year or more.

I've been an ally customer for years and this is the first I've heard of it. Reg D has been suspended since Covid, but that's just the requirement to limit withdrawals. Banks can still enforce or not as they see fit.

>but in the more obvious definition of the program it has a different tune about using it…so I’m wondering, which is it?

It doesn't have a different tune about using it. The deposit agreement has a different tune about abusing it, which is what you are suggesting

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infinityupontrial t1_iy5df9f wrote

Is that little bit of interest Worth possibly having them close your account over?

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floofer-roofer OP t1_iy5xiul wrote

No, but genuinely it is not stated anywhere obvious as a possibility or even as a bad thing to do. I didn’t know until 3 hours ago when the other commenter said it was in the fine print. Most of the places where it’s describing this service, it either phrased it as there’s no limit, or that there was a limit that’s now being waived via reimbursement of any fees. No indication it is bad practice unless you happen to read the fine print.

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