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Ally Bank Review: A Fresh Start for an Aged Institution
In an effort to recover from the recent economic downturn, Detroit-based company GMAC has launched a brand new bank holding company, aptly named Ally Bank. If you’ve never heard of Ally Bank, it would come as no surprise. This is a brand new moniker for an old business venture, formerly known as GMAC Bank.
Executives hope that the name change, among other restructuring initiatives, will help to turn around the negative image surrounding the dramatic government bailout of the auto industry. With the protection of the FDIC and an optimistic outlook, Ally Bank is developing its own special banking style.
A New Approach to Banking
GMAC’s Ally Bank has more than just a fancy new name; it has a new approach to banking. What sets Ally Bank apart from the average financial institution? This bank realizes that the times are changing. Understanding that technology has revolutionized all industries, Ally Bank has a unique approach to meet the ever-changing needs of consumers. There are several special attributes that set Ally Bank apart from its traditional competitors in the financial sector.
First and foremost, Ally Bank is a 100% online organization. This means that its doors are always open, 24 hours, 7 days a week, to meet customer needs. Customer service agents are also available by phone 24 hours a day. Ally Bank also prides itself in offering a straightforward approach to business. There are no monthly fees, no minimum deposits, no minimum balances and no confusing disclaimers. Finally, Ally Bank features carefully developed products and services that are user-friendly and completely customizable.
Compare Ally Bank's Products
Before we look at each product offering, here is a quick summary of the three primary financial products offered by Ally Bank:
| Product | Effective Date |
Rate (APY) |
Opening Balance |
Minimum Deposit |
|---|---|---|---|---|
| 1-year CD | 8/14/09 | 1.95% | $0 | $0 |
| Online Savings Account | 8/14/09 | 1.55% | $0 | $0 |
| No Penalty CD | 8/14/09 | 1.49% | $0 | $0 |
Ally Bank’s Financial Products
While it does not feature a full range of financial services like a traditional bank, Ally Bank specializes in niche offerings. Currently, Ally offers four financial products: Classic CDs in terms ranging from 3 months to five years, a 9-month no penalty CD, an online savings account, and a money market account. Here's a quick rundown of each product.
Ally's Classic CD
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. Currently, Ally's CD rates range from 1.10% APY (3 months) to 3.10% 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.
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.
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 to the fullest extent permitted under federal law.
{ 12 comments… read them below or add one }
Change the name to fool folks? GM spun them out when it was still trying to save itself. Spawned from the now “government motors”, we’re supposed to “forget” who they were. I’ll share one phrase “Rule Of 72″. When they were GMAC, they used this to extract more money from car buyers. Who knows what else they did to car buyers borrowing. But, they have a new name and we’re just supposed to forgive and forget. Their ancestry won’t have anything to do with their offerings. Sorry. I’ll stick to my credit union. This group has “blood” on its hands. Be careful when you make a deal with the devil. Sometimes it doesn’t work out so well.
reinkefj, I try to have a lot of patience with the differing views expressed on this site, but this comment is about the most ridiculous thing I’ve ever read. First, General Motors has a long and storied history in our country. Perhaps you’re too young to remember, but it has employed more people and benefited the U.S. in ways most companies never will. It’s current turmoil is the result of a lot of factors, and frankly, it’s sad to watch the auto industry crumble like it has. But a lot of hard working men and women poured their lives into these great companies, which should not be quickly forgotten.
As for Ally, it is an FDIC-insured bank. Its deposits are as secure as any credit union (actually more secure in some cases), and Ally pays some of the highest rates currently available. Use Ally or don’t use it, but “‘blood’ on its hands” is just ridiculous.
Nice post -but why are you being paid by the evil ones who want to tax this country so much we go bankrupt and will be fully controlled by the Chinese? Seriously you are messed up –
GMAC is owned by GE who will getting hand-outs from the Government of taxpayer monies. First we will pay for their research and then we will pay through the nose for the products, plus get taxed 20 times over.
stop the spreading of liberal bs and get a life in helping others.
JanSimpson
JanSimpson, first, I was not paid by anybody to write this review. Second, Ally Bank, formally GMAC, is not owned by GE. Third, the Chinese own so much of our debt because we Americans (both government and individuals) can’t seem to say no when it comes to buying stuff. Fourth, the hand-outs from the Government make me sick, too. We’ve gone far beyond what the government typically spends in financially tough times. Now the government helps us pay for our homes, cars, and digital TV converters. Government is without doubt out of control, but I’m not sure how that reflects on whether or not Ally Bank offers a good rate on a CD, which it does.
I have been with Ally (GMAC) for 3 years. I had no problem with GMAC before.
Recently I spend 2 months in Ally and still can not open a new account, this experience is very frustrated. The customer representatives have inconsistent answers. One day they call you with one answer, and please don’t feel surprised for the call from them in the following days with another answer; I fax the documents to them, and they can not find/locate the fax. I am tired with several rounds of this kind of inconsistence.
My question is:
If representatives can NOT provide standard guidance/answer, what’s the meaning of customer service of the bank?
Although they have 7-24 call service, it won’t help if they can NOT solve your problem. (In fact, it wastes your time!)
I am searching for another bank with relative high rates. Enough is enough.
I have spent one week and numerous phone calls and have been unable to open a savings account. The customer no service representatives haven’t a clue as to what they are doing. I’m taking my business elsewhere.
Thanks for the input on Ally. I don’t know if the problems have anything to do with their transition from GMAC to Ally, but I’ll look into and report what I find.
Stay away from Ally Bank. Their website does not accurately reflect transactions and they want real paperwork when you sign up
I’ve had no problems with Ally whatsoever. Didn’t need any physical paperwork and the transfer from my bank went smoothly. At least that was the expierence I had with my CDs. Never even needes to talk to customer service.They do have some of the best rates around. And DR, I agree. I dont see what GM’s bankruptcy has to do with Ally’s CD rates
I just love this Bank. I have been very pleased with their No Penalty CD and like their 24×7 customer service concept a lot. Their website is really good and I have had no problems moving money between banks whenever I needed to. Good service and good rates…..what more can you ask for?
If the Ally Bank that is advertising high deposit rates is the same as the Ally Bank chartered in Midvale, UT, you should probably be aware that they are on the Watch List for Brokered CD banks based upon their June 30, 2009 call reports. .
These banks are evaluated based upon their Texas Ratio (Nonperforming Assets + 90 day past-due loans and leases / tangible equity + loan loss reserves). The higher the ratio, the greater the financial and credit risk. The listed banks all have a Texas ratio in excess of 40%. While most depositors need not worry as they are covered by FDIC insurance, it is certainly an issue they should be aware of.
Just looked into it. The Ally Bank on the Brokered CD list is not the same.