End of Ally.ca High Interest Savings Accounts

I was surprised to learn today that Ally.ca High Interest Savings Accounts will be terminated as of April 30, 2013. They had been paying an attractive interest rate of 1.80%, which had CDIC insurance protecting the principal, but have since dropped it to only 1.20%. The Royal Bank of Canada acquired the deposit business of Ally.ca a few weeks ago, and it seems they don't want to pay the rates that drew many customers in the first place.

Since other financial institutions are paying more than 1.20%, I telephoned Ally.ca and asked that all of the funds I had deposited there be transferred out immediately, so that I can direct the funds elsewhere. The customer service representative, who was very polite and professional, did not seem surprised by my decision. It appears that I'm not the only person who moved all of their funds out of Ally.ca today. I hope that she and other staff at Ally.ca will not be laid off.

Canada needs more options, not fewer ones, for savers seeking higher yields. Some additional competition is sorely needed to break the oligopoly that exists today in the Canadian banking industry.

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