Ally Bank

Our Full Ally Bank Review

Online banks are popular for paying interest rates much higher than brick-and-mortar banks. Ally is one of the most outstanding online banks–and not just because they pay high-interest rates (which they do!). Ally Bank offers more services than other online banks, including some of the best auto financing programs available anywhere, and even a tie-in with their popular investment brokerage, Ally Invest. Of all the online banks out there, this one should be near the top of your list.

About Ally Bank

As an online bank, Ally Bank appears to be a young company. But it’s actually nothing of the sort. It’s the successor company to the once-popular General Motors Acceptance Corporation (GMAC), once one of the largest auto lenders in the world. Founded in 1919, GMAC became Ally Bank (FDIC # 57803) in 2009.

Auto financing remains one of Ally Bank’s primary lines of business, and they offer some of the most innovative auto financing anywhere (which we’ll cover in this review). In making the transition from GMAC, Ally Bank is a full online bank. It’s well known for providing some of the highest interest rates on checking and savings accounts, money markets, and certificates of deposit (CDs).

In 2016, Ally Bank moved into the investment universe, with the acquisition of TradeKing–a digital wealth management company that also offers online brokerage services. The TradeKing division was reestablished as Ally Invest–which we’ll also briefly cover in this review.

Ally Bank now has more than 11,000 employees, with $155 billion in customer deposits and $196 billion in total assets.

The company has all this, and no physical bank branches anywhere!

How Ally Bank Works

The basic account features of Ally Bank include:

Available accounts – Checking and savings accounts; CDs; traditional, Roth, and SEP IRAs.

Minimum account balance – There are no minimum balances required to open an account. However, CDs and certain savings products do have minimum balance requirements in order to get in on various interest rate tiers.

Zelle – Ally Bank offers this service as an easy way to send or receive money to and from just about anyone with a U.S. bank account. All you need is their email address or mobile phone.

Account funding – You can fund your Ally Bank account through remote check deposits with Ally eCheck Deposit from your mobile device, as well as through online transfers, direct deposit, wire transfers, and checks by mail. Since Ally Bank has no physical branches, you won’t be able to deposit cash into your account.

Account access – Your Ally Bank account comes with both checks and a debit card. You can also access your account by electronic transfers or online bill payments. On savings and money market accounts, you’re limited by federal law to six withdrawal transactions. If you go over the limit, there’s a fee of $10 per transaction.

ATM access – Ally Bank accounts can be accessed through Allpoint ATMs throughout the U.S. There’s no charge if you use one of these ATMs and the network has more than 43,000 locations across the country.

You can access your Ally Bank account at out-of-network ATMs, but you will pay a fee for the service. However, Ally Bank will reimburse you up to $10 per statement cycle for any fees charged by those ATMs.

Mobile App – The Ally Bank Mobile App is available for iPhone and Android devices. You can do virtually anything on a mobile app that you can on the website. This includes depositing checks using Ally e-Check Deposit. With it, you can make a deposit simply by taking a picture of the check you’re depositing. You can also use the mobile app to pay bills, transfer funds, or find ATMs.

Customer service – You can contact Ally Bank by secure email, online chat, or by phone. Customer service is available Monday to Friday, 8:00 AM to 11:00 PM, and Saturdays from 9:00 AM to 7:00 PM (Eastern time). Ally Bank representatives are not available on Sundays.

Account protection – All accounts at Ally Bank are protected by FDIC insurance on deposits of up to $250,000 per depositor.

Ally Bank fees – There are no monthly or annual fees charged on any Ally Bank products, including credit cards.

Penalties for early CD withdrawals – Except for the No-Penalty CD, all CDs have an early withdrawal penalty as follows:

CD Term Early Withdrawal Penalty
24 month or less 60 days of interest
25 month – 36 month 90 days of interest
37 month – 48 month 120 days of interest
48 month or longer 150 days of interest

Ally Bank Savings Products

Ally Bank offers online checking, savings, and money market accounts, as well as CDs. Each pays some of the highest interest rates available in the banking industry.

Ally Bank Interest Checking Account

Interest Checking pays interest based on two tiers (as of June 14th, 2019):

  • 0.10% APY for balances under $15,000
  • 0.25% APY for balances of $15,000 or more

As noted earlier, your Ally Bank Interest Checking Account comes with both checks and a debit card. You can make payments using Online Bill Pay, which is offered as a free service.

Ally Bank Online Savings Account

Ally’s Online Savings Account is currently paying 4.20% APY on all account balance amounts. Interest is compounded daily, and there are no monthly maintenance fees.

Savings Buckets

Ally makes it easy to save for specific goals, such as emergencies or a vacation. You can select up to 10 Savings Buckets, and then allocation your savings to each.

Savings Boosters

Ally offers three ways to move money between Savings Buckets. First, you can set up recurring transfers from a linked checking account to your savings. You determine the frequency of the transfers, the amount, and the one or more Savings Buckets to receive the money.

Next, you can choose to round up your transactions on your spending accounts. When you reach $5 in roundups, Ally will transfer it to your savings.

The third and final way to fund Savings Buckets is quite innovative. It’s called Surprise Savings. Ally analyzes checking accounts you link to Ally, and transfers money from those accounts to savings when it determines your money could work harder for you in savings.

Personally, I’m not comfortable turning over control of my money to an algorithm. That said, Ally does have controls in place to prevent things like an overdraft. And you can edit it any time you want.

Ally Bank Money Market

Ally Bank Money Market has offers 4.20% APY on all balance tiers. The account comes with both checks and debit card access. Interest is compounded daily.

Ally Bank CDs

Ally Bank offers three different CDs:

  • High Yield CD
  • Raise Your Rate CD
  • No Penalty CD

The details on each are as follows:

High Yield CD

This CD product is available for both regular accounts and IRAs. The high yield CD comes with the Ally Ten Day Best Rate Guarantee. This means you will get the best rate offered within 10 days of funding your CD.

Yields on the High Yield CD are as follows:

CD TermAPY for All Balances
3 months3.00%
6 months4.75%
9 months4.85%
12 months4.50%
18 months4.25%
3 years4.00%
5 years3.90%

Raise Your Rate CD

Ally’s Raise Your Rate CDs protect you from rising rates during the term of the CD. If rates go up, you can elect to up the rate of your 2-year CD once during the term, and twice on the 4-year CD. Keep in mind, however, that you pay for this option in a slightly lower starting yield as compared to its high-yield CDs.

This CD product is available in terms of two years or four years. Either term pays an interest rate of 3.75% APY, compounded daily. It is available for both regular accounts and IRAs. These CDs also come with the Ally Ten Day Best Rate Guarantee in which you will get the best rate offered within 10 days of funding your CD.

No Penalty CD

This is an 11-month term CD. You can withdraw your full balance, including interest, at any time after the first six days following the date you fund the certificate. No early withdrawal penalty will be charged. The rate for this CD is 4.00% APY.

Ally Bank Home Loans

With Ally Bank, you can apply for your mortgage online. They have a team of dedicated loan experts to help guide you through the process. Mortgage products available include fixed-rate loans, with terms of 15, 20, and 30 years. They also offer 5/6, 7/6, and 10/6 adjustable-rate mortgages (ARMs). They provide Jumbo mortgages and participate in the Fannie Mae’s HomeReady mortgage program for first-time homebuyers.

Ally Credit Cards

Ally Bank offers four credit cards available by invitation only. If you receive a direct mail offer for a card, you can respond to the offer on Ally’s website. Here’s a list of the credit cards:

As the successor to the once-popular GMAC, Ally Bank has perhaps the widest selection of some of the best auto financing programs available anywhere. The company is the largest auto financing institution in the country. They work with more than 18,500 car dealerships, providing auto financing for more than 4.3 million consumers.

Ally Bank offers financing for personal and business vehicles, as well as recreational vehicles. They even have financing for specialty vehicles, like those with wheelchair lifts and right-hand drive capability. They offer both loans and leases.

Some of the loan and lease programs include:

Ally Buyer’s Choice

This program combines the benefits of buying and leasing. It gives you the option to continue making your regular lease payments, or to sell the vehicle to Ally Bank at a predetermined price and date. You have a choice of terms of either 48 months or 60 months, but you can also trade in the vehicle at any time during the contract. The program is available in every state except Nevada.

Ally Balloon Advantage

Under this program, your monthly payments are lower, because you make a large, one-time payment at the end of your contract. You start with a fixed APR and monthly payments, with a single large payment at the end. You can sell or trade-in your vehicle at any time as long as you pay off the remaining balance on the loan.

The program can make it easier to qualify for a loan, with lower monthly payments that will enable you to save the money needed to make the balloon payment at the end of the term.

Ally Balloon Advantage applies to all new GM, Chrysler, and Mitsubishi vehicles. But it also extends to use vehicles up to four model years old (except Saab and Suzuki). The program is available in every state except Maryland, Nevada, New Hampshire, North Carolina, and Pennsylvania.

Ally SmartLease

Ally offers shortened financing terms that give you the flexibility to get a new vehicle more often, and even includes select pre-owned models.

Ally Pre-Owned SmartLease

You can use Ally Pre-Owned SmartLease to lease a used vehicle. This will extend the benefit of leasing (lower monthly payments) to pre-owned cars.

The program lets you lease vehicle models based on the following criteria:

  • You have clean history reports
  • The vehicle is less than 4 model years old
  • It has fewer than 75,000 miles

Along with the lease, you’ll also receive automatic Guaranteed Auto Protection and the ability to purchase maintenance coverage similar to what’s offered for new models.

Ally Invest

As if Ally Bank’s banking and lending services aren’t enough, their Ally Invest platform enables you to invest with the same company where you bank.

The platform allows you to trade stocks and exchange-traded funds for just $4.95 per trade–$3.95 if you’re a frequent trader (at least 30 trades per quarter). But you can also trade bonds, mutual funds, options, Forex, and futures. Since they are a successor to TradeKing, Ally Invest is particularly strong with options trading. There is no minimum balance requirement to open a self-directed account.

If you’re not interested in self-directed investing and prefer robo-advisors, you may want to try Ally Invest Cash-Enhanced Managed Portfolios. Receive a fully automated investment portfolio with a $100 minimum investment. Ally will create and manage the portfolio, offering periodic rebalancing as well as dividend reinvestment. There are no advisory fees for the Cash-Enhanced Managed Portfolio. About 30% of the portfolio will be put in a cash buffer earning about 1.80% interest.

They offer both taxable accounts and IRAs for both self-directed trading or the robo-advisor.

Ally Bank Pros and Cons

What we like

  • No monthly maintenance fees on checking, savings, and money market accounts
  • Earn high interest on savings products
  • Traditional banking products like credit cards, mortgages, and loans are available
  • Ally Bank auto financing programs are among the most innovative available
  • Investment accounts available
  • User-friendly website

What could be better

  • Online-only bank, no brick-and-mortar locations
  • Cannot accommodate cash deposits
  • Other online banks offer higher APYs on savings products
  • No availability of FHA or VA mortgage programs through Ally Bank Home Loans.

My Experience with Ally Bank

I opened my first account at Ally on December 25, 2012. Why I opened it on Christmas I have no idea. I’ve held accounts and a number of online banks over the years. In my experience, here’s how Ally stacks up:

  • Its website is excellent. It’s extremely easy to use.
  • Its customer service is friendly and helpful.
  • Its interest rates are good, but never the best among online banks.

One stand-out feature is its interest-bearing checking account. It doesn’t charge a monthly fee and has no minimum balance requirement. While I’ve never used the checking account, it would allow you to use Ally as a full-service bank.

Should You Open an Account with Ally Bank?

At a time when local banks–and even some of the best-known banks in the country–are paying interest rates on savings of well below 1%, online banks are becoming the go-to source for higher interest rates. Ally Bank pays some of the highest rates available. But unlike many online banks, Ally Bank also offers many of the services traditionally associated with banking, including home loans and credit cards. Also, they’re virtually the industry leader when it comes to auto financing.

And finally, with Ally Invest you can invest money with the same company where you do your banking. Ally Invest offers an attractive combination of low-cost self-directed investing, as well as a competitive professionally managed robo-advisor.

All in all, Ally Bank offers a comprehensive package that’s virtually unmatched in the industry.

If you’d like more information, or if you’d like to sign up for an account, you can visit the Ally Bank website.

Ally Bank Review

Rob Berger

Interest Rates
Customer Service
Website Usability
Account Types
Account Features

Summary

I’ve banked at Ally for years and have always had a positive experience. Customer support is excellent and the website is very easy to use.

4.8

Author

  • Rob Berger

    Rob Berger is the founder of Dough Roller and the Dough Roller Money Podcast. A former securities law attorney and Forbes deputy editor, Rob is the author of the book Retire Before Mom and Dad. He educates independent investors on his YouTube channel and at RobBerger.com.

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