I just opened an online savings account at Ally Bank. It took all of about seven minutes to open the account, and Ally offers one of the highest interest rates available on an FDIC-insured account. So it seemed that a detailed review of Ally Bank was in order.
Opening an Account at Ally
As an online bank, Ally has perfected the process of opening an account. As you would expect, you have to select the type of account you want to open (more about that below), enter your personal information, and the information of any joint account holders. In my case, I added my wife to the account. the entire process took about five minutes and was extremely easy to complete.
To fund the account, I linked my Citibank checking account to the Ally savings account. Normally, an online bank has to make two small test transactions with your bank to verify that you’ve linked the correct account. With Ally, you can enter your username and password of your primary bank to verify the account instantly. While you don’t have to take this approach, it’s a nice feature over having to wait several days for the test deposits to occur.
Finally, there are several security steps you have to take to secure your account. In addition to a password, Ally has an image with a caption that you pick. You also answer three security questions of your choice. It’s clear they take security very seriously.
And that’s it. Total time to open the account was less than 10 minutes.
Ally Bank’s Financial Products
We opened an online savings account. But Ally Bank offers several products, several of which are quite innovative.
Currently, Ally offers several financial products: Classic CDs in terms ranging from 3 months to five years, a 11-month no penalty CD, raise your rate CDs (2 or 4-year), an online savings account, a money market account, and a checking account. Here’s a quick rundown of each product.
Ally Bank’s classic CDs offer some of the best interests rates available. And Ally’s CD rates are extremely competitive regardless of the CD term. As of 07/14/14, Ally’s CD rates range from 0.30% APY (3 months) to 1.60% APY (5 years). These rates can and do change frequently, so check with Ally to get current rates. Interest at Ally compounds daily. Unlike many other banks, Ally does not require a minimum deposit or opening balance for its CD products.
As with other certificates of deposit, Ally’s Classic CD does levy penalty fees if money is withdrawn from the account before the end of the CD term. For certificate of deposit terms of 3, 6, 9, and 12 months, the fee equals 3 months’ interest. For certificate of deposit terms of 18 months or longer, the fee equals 6 months’ interest. These fees are waived if the depositor passes away or is declared legally incompetent.
If you’d like a CD, but want to avoid even the possibility of an early withdrawal penalty, consider Ally’s no penalty CD.
No Penalty CD
If a classic one-year CD is too much of a commitment during these tumultuous economic times, Ally Bank offers a no-penalty CD to cater to the needs of more conservative investors. There are no hoops to jump through if a customer decides to withdraw funds, and there are no penalty fees. A depositor can withdraw the full balance and accrued interest at any time after the first six days of funding the CD. Just like the classic CD, the no-penalty CD requires no minimum deposit, and no annual fees.
Raise Your Rate CDs
If you think interest rates may be on the raise, Ally’s Raise Your Rate CDs protect you from getting locked into a low rate. Unlike a traditional CD where your rate remains the same throughout the CD’s term, with a raise your rate CD, you can elect to step up to a higher rate should interest rates rise. But choose wisely, as you can only exercise this option one time during the term of the CD.
Online Savings Account
For customers looking for a simple savings account solution, Ally Bank delivers an online savings account with several unique features. Like the other products and services from Ally, an online savings account features no minimum deposit, no monthly fees, and no minimum balance. However, one of the drawbacks of Ally’s online savings account is that customers are limited to a maximum of six withdrawals or transfers per statement cycle.
This limit may prove unmanageable for individuals who manage their savings accounts frequently with withdrawals or transfers, but is a common restriction of savings accounts. By restricting the number of monthly transactions to the account, Ally reduces the cost of managing the account. These lower costs in turn enable Ally to offer very competitive interest rates.
Money Market Account
As a complement to their online savings accounts, Ally Bank also features online money market accounts. These accounts allow customers easy access with check cards and paper checks. The unique thing about Ally Bank’s money market accounts is that there are no ATM fees, and if an outside bank charges fees, up to four transaction fees (or $6) will be refunded per month.
Like the savings accounts, however, one of the drawbacks of Ally Bank’s online money market accounts is that customers are limited to a maximum of six withdrawals or transfers per statement cycle. This limit may prove unmanageable for individuals who rely heavily on their money market account to pay for goods and services.
Ally offers one of the few checking accounts that actually pays interest. In fact, the interest rates you earn on an Ally checking account rival and even surpass the rates you’ll earn on savings accounts at other banks.
The perks you get with this account are impressive:
- No minimum deposit to open
- No monthly maintenance fees
- Free Online Banking, Mobile Banking, Bill Pay, and Popmoney®
- Free Debit MasterCard®, checks and unlimited check writing
- No Ally ATM fees at any ATM nationwide. Use Ally’s ATM & Cash Locator
- Earn money back with Ally Perks® when you shop with your Ally Checking Debit Card
- Make deposits from home with Ally eCheck DepositSM
- Balances of $15,000 or more get an even higher rate
- Free balance alerts
Ally Bank offers some of the highest interest rates available anywhere. After extensive research, I had no qualms about opening my savings account at Ally. And its rates tend to be among the highest regardless of the type of account you open. Because rates change frequently, you’ll want to check the Ally website for current rates. Alternatively, you can check out our pages that compare rates at online banks, high interest savings accounts, or free checking accounts.
One of the big challenges with any online bank is making deposits or withdrawing money. Ally Bank offers the traditional methods, ranging from transfers with existing bank accounts to mailing a check. Ally also offers an extensive network of free ATMs where you can make deposits or withdrawals. But the bank also offers two unique options.
First, you can deposit a check from home by simply scanning the check. Called the Ally eCheck Deposit, you can take a picture of a check and make a deposit with a smartphone, or you can scan the check and make a deposit from a computer.
Second, you can use what’s called Popmoney to transfer cash to friends and family. All you need is their email address or telephone number, and you can send or receive cash via your smartphone or computer.
Ally Mobile Banking
With Ally’s mobile banking app, you can turn your smartphone into a virtual bank teller. The app allows you to check your balance, deposit checks (see eCheck Deposit above), locate the nearest ATM, pay bills, or even transfer money.
When you open an Ally checking account, you’re automatically enrolled in Ally Perks. With this program, Ally deposits cash directly into your account when you shop at certain retailers. You can see a list of qualifying retailers in your account online, or you can set up push notifications so that Ally notifies you when a new offer is available. When you make qualifying purchases, Ally will deposit money back into your account.
With any bank account, fees are one of the most important considerations. There will also be some fees, such as a fee for a bounced check. The key is to identify any fees that you can’t avoid, like monthly maintenance fees. Ideally, you want an account that, if used correctly, charges no fees. And that’s exactly what Ally Bank offers. There are no fees to open an account and no monthly maintenance fees.
Top Rates & FDIC Insured
Ally Bank continues to offer some of the highest rates currently available. We track some of the best CD rates in the industry, and Ally Bank is consistently at the top of the list. In addition, deposits with Ally Bank are FDIC-insured (FDIC Certificate #57803) to the fullest extent permitted under federal law.
To check current rates and open an account, visit Ally Bank’s official website.