Last week, Reader Dan emailed me a transcript of a conversation he had with a customer service representative. In the conversation, the CSR said that the 0.25% APY renewal/loyalty bonus may be going away after next month (September).
Here’s the chat transcript (edited for formatting but otherwise 100% intact as what Dan sent me):

Since their inception in 1994 when Stanford Federal Credit Union began offering their members online interest banking services, online banks have generally been able to offer customers better savings rates and efficiency. Due to reduced overhead expenses, online banks have been able to pass their savings on to customers in the form of better interest rates. Today, because of the increasing number of FDIC insured online banks, they must differentiate themselves further – competing on interest rates, functionality and online features.

A long-term CD can still be a better short-term investment than the top-paying 12- and 24-month CDs.
You just need the right combination of a good interest rate and lenient early withdrawal penalty to boost your earnings.
Our favorite is still the 5-year certificate of deposit from Ally Bank, the online bank launched by auto loan giant [...]

Last week, I wrote about how ING Direct and Everbank offered overdraft protection by way of a line of credit, rather than socking you with overdraft fees. I commented, off the cuff and without doing much research, about how online banks are better than traditional brick and mortar banks about overdraft fees because they aren’t as much a slave to meeting their revenue expectations. I figured it’d be a little unfair if I just left it at that, so I took a look at how online banks deal with overdrafts on their checking accounts.

It seems that CD renewal bonuses are all the rage these days! Just the other day, I received an email from Ally Bank now that one of my CDs was nearing its expiration.