January 2012 Check In On Ally Demand Notes

I’ve written a few posts about the safety of Ally Demand Notes.  I’ve had a few readers ask whether I still feel that they’re safe, so I thought I’d check in with an update.

mb-201201checkcalcFor those who aren’t aware, Ally Demand Notes are an unsecured money market type account that currently pays 2.25% interest.  Because it’s unsecured, the holdings are not covered under FDIC insurance laws, meaning that it’s not like a traditional bank savings account.

The upside is that it pays a rate of over double what you’ll find virtually anywhere else.  If you’re willing to take the risk, and you qualify to participate (you have to work or have a relative who works for GM or Ally), it can be a good place to earn some extra money on your cash savings.

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