Bank of America pays .1% APR on regular savings accounts. ING pays 1.1% APR on a regular savings account, so it is 10x what a brick and mortar pays. But it still isn’t squat. No wonder Americans are terrible savers.
I didn’t miss it, but I don’t assume that banks are going to fail because people complain about it online. These comments are a sign of incompetence or paranoia or exaggeration in online complaints (probably some of each), not a sign that the bank is going to go away tomorrow and the OP will never get her money back. Even if you do believe that the entire GMAC corporation is one large ponzi scheme, as Fear Itself noted, there is the little matter of FDIC insurance, as long as the OP has less than $250K in the account.
To answer a few questions (forgive me if I do not quote the original questioner, or miss someone, as I’m ducking in here):
- The problem was my account (Una) was linked by me to an account at another bank, and the name on the account was mistakenly entered as the name of the bank. So instead of:
“Ally account owned by Una is linked to Bank of America account owned by Una”
their records show
“Ally account owned by Una is linked to Bank of America account owned by…wait for it…America”
Yes, it’s really that stupid (and it’s not my error, either, that much has been confirmed. No one will admit whose error it is. Perhaps it’s my error for simply existing? Perhaps my existence collapsed a probability waveform which caused a cosmic ray to hit their server?) So because my account is linked to this mysterious “America” person, well, that’s obviously terrorism and fraud in action!
- I went with them because when I opened my account they were paying buttloads more interest than my brick-and-mortar accounts. I recall that at the time I went with them my B-and-M account had 1-year CDs at 1-2%, but Ally had 4-5%. Big difference.
I’m in bank operations, and I’d spit in the face of anyone who tried to tell me a line like that. There is nothing that can’t be undone by someone else and there’s no transactional privilege so high or so rare that the mainframe programmers or information security department can’t grant it to someone else. Just for one example, I have control over a small group of people who have the ability to initiate and approve wire transfers of up to ten trillion dollars. I believe this is more money than exists in the United States. Needless to say, we keep a close watch on this group, but if the access is needed, it’s easy to add someone new. Just takes a couple “Are you sure?” emails and a few keystrokes.
Now that the OP has enough names and addresses to launch what I hope will be a successful campaign to retrieve her money, it’s probably safe for a small hijack…
People bitch and moan when they can’t get more than 1% return on savings, and they howl when they can’t get a mortgage for under 4%. What people forget is that the bank has to live in that three percent difference of what they receive in interest paid on loans and what they give out in interest paid on deposits. We can’t have it both ways - any bank that charged 4% on loans and paid 5% on savings would soon be upside-down, inside-out and out of business.
You must be joking, right?
Banks make billions of dollars, just on ATM fees, and account service fees, fees for money orders, certified cheques, and so on, endlessly. Take just one example; ATM’s, the cost of which is fully paid within a few months of use, yet they continue to draw a profit from every single use and will for the years to come.
I’m not in bank operations, so suppose you tell us what percent of your lending is mortgages in 5% range, and what percent is in credit cards in the 10-24% range.
Small bank VP buddy of mine says that the quick guideline is a bank should make about $1/month in interest and fees on every $100 they have in deposits available to loan out.
The volume of loans in the low range is going to be huge because it takes 20-30 high range credit card accounts to equal one home loan in sheer volume of interest collected.
Also remember plenty of those cards and some of those mortgages default even in good times, taking both the principle and the interest with it. The bank has to absorb that cost out of that interest.
Want a neat object lesson in how it works…
Open an account at lendingclub.com and start funding loans. You will learn exactly why banks think and operate the way they do.
Who can blame them, I never would have trusted that Ugly Betty chick either.
Speaking in very general terms:
Whether you can sue an out-of-state defendant in your state depends on whether they have “purposeful minimum contacts” with your state, such that they should anticipate being haled into court there. What does that mean? To avoid giving legal advice, I will just say read the Wiki article for the basics.
The “purposeful minimum contacts” standard was developed before internet commerce became a reality. The law is changing rapidly as it adapts itself to this new reality. Wiki summary.
In particular, note the “Zippo Test” which is being applied by a number of federal jurisdictions:
One concrete suggestion. Check with your state’s secretary of state to see whether the corporation in question is registered to do business in your state. If it is registered to do business in your state, then it has effectively submitted to jurisdiction there. If it has not (more likely) then you will have to rely on establishing “minimum contacts” to assert jurisdiction.
The first thing I would do is resolve the issue that caused the fraud notice. Can you de-link Ally from the bank which has the joint account?
I don’t want to be the defender of high interest rates, but the bank obviously has many more expenses on top of the cost of funds. I am more familiar with credit cards than mortgages. For credit cards, the cost of funds is generally in the 3% to 4% rate (it costs them that much just to have the money to lend). On top of that, through the recession, the loss rate (percent of loans that go bad, never to be recovered) has generally been between 8% and 14%, depending on the bank. So the first 14% or so of the interest rate during these times has gone to nothing more than the cost of funds and losses. On top of that, of course, you have things like salaries, operational costs, marketing expenses, etc. So even with where the average interest rate has been lately, probably around 16% or 18%, most credit card companies lost quite a bit of money in 2009.
I won’t argue that they didn’t also make a whole lot of money in the 2003 to 2007 time frame.
I am not as familiar with mortgages, but it is a similar story. If the interest rates aren’t above 8% or so, everything is going toward cost of funds and losses.
It should be noted that banks make money on every credit card transaction in the form of discount and processing fees. These fees can range from 1-4% or more of the gross total of the transaction. Credit card issuers do not need their customers to carry a balance in order to make money.
This is true, although remember that those fees are split pretty much evenly between the bank and Visa (or MasterCard). In general, you need to spend about $1,500 to $2,000 a month on your card in order for you to be profitable for the bank if you never pay interest charges. This number can vary greatly depending on other factors (annual fee, how you were acquired, etc.)
I had trouble filing my taxes with Revenue Canada one year (think I.R.S.) because there were some kinds of errors in the computer files for me (or some similar gobbledy-gook). I eventually got it fixed by making it my life’s work to hunt down and pester the people who could make this problem go away. That’s pretty much the only thing that will work in your situation too, Una.
You have my complete sympathy for the situation, though. It would be bad enough to have your bank freezing your account, but to not even tell you? Inexcusable.
Well, if it’s that easy, if you don’t mind please add me to that group.
Oh, and I’ll need that password too. Thanks.
On the other hand, trillions of dollar transactions are usually done by Congress. If adding me to the list would associate me with* that* group, then thanks but no thanks.
Well, after two more business days of absolute insanity they claim my account is unlocked and my money is in mid-transit to a brick-und-mortar bank. I guess I’ll see within about 48 hours.
Maybe you can help. I got a letter from a Nigerian solicitor . . .
If you’re not gun-shy about online banks for savings only, you could look into Smartypig. I created a smallish savings goal with them last year just to try them out. So far so good.
It’s different from a normal savings account in several ways, so do a lot of your own reading first, and they made a lot of changes since they first opened, so read reviews from this year if you can.
Their current rate on deposits of $50,000 or less is 2.15% APY.
I met my savings goal a long time ago, so now my money is just sitting there quietly. I haven’t actually withdrawn any money, so I can’t vouch for how trouble-free that is.
I fear I am a bit gun-shy about another online bank. It was insane; I had 10x the money I needed at the time, all legally mine, and some idiots on the phone were caught in a loop and unable to do anything to give me access to it. Not only that, they were almost contemptuous of my attempts to get MY money from them.
The Ally adverts brag about how you always get a human being; yeah, you get a human being who can’t help you. They might as well have connected me to a highly trained black Labrador. And then they have the “egg management fee” advert - how about “eggs? Prove these eggs are yours! You don’t look like a chicken to me! Cluck off and die!”
Try this one on for size: their “fraud management” person had never heard of “Bank of America.” Actual quote: “Is this some local bank or credit union?” No, it’s only the largest damn bank in the entire US…but then it was clear English was her third, or possibly fifth language.