What Is Ally Bank?
Believe it or not, Ally has its roots in the automobile industry. Back in 1919, General Motors Corp. founded the company as the General Motors Acceptance Corp. (GMAC) to provide financing for its rapidly growing customer base. Over time GMAC expanded its operations to include all the functions of an everyday bank.
Fast-forward nearly 90 years to 2009, when GMAC changed the name of its banking unit to Ally Bank. GMAC had suffered during the financial crisis, and a new name offered a fresh start. A year later, the mega financial company would rebrand its entire operation as Ally Financial. In 2014, Ally Financial went public with the ticker ALLY. And in 2016, the company entered the online brokerage space with the purchase of TradeKing, which it rebranded as Ally Invest.
Ally Financial is still headquartered in Detroit, as it has been for nearly 100 years. But Ally Bank itself — the subject of this review — has its HQ in Midvale, Utah.
How Does Ally Bank Work?
The reason most people decide to go with Ally is due to the fact that the bank offers relatively high interest rates. Savings accounts and CDs are the big draws.
Additionally, it helps that Ally Bank doesn’t charge monthly maintenance fees, and there are no minimums on accounts, either. With many banks requiring minimums and charging fees, this is a nice departure from the norm.
It’s also important to note that Ally is FDIC-insured, so those protections apply up to $250,000 per depositor. This is great for peace of mind, especially because all of your banking will be done on the internet.
Signing up for an Ally Bank account is easy.
You do have to provide information about your identity (including your Social Security number) and answer questions that all banks have to ask as a result of the PATRIOT Act. However, it’s relatively painless, and it’s possible to open a variety of accounts, including CDs and bank accounts, from the same screen, without the need to fill out the same information over and over again.
Interest Checking Account
Why just let your money sit in your checking account without letting it go to work for you? That’s the question Ally Bank seeks to ask — and answer — with its interest checking account.
This product offers features that you’d like to see in a checking account, such as:
- A debit MasterCard
- Free use of any Allpoint ATM in the U.S.
- Reimbursement of up to $10 per statement cycle for fees charged at out-of-network ATMs throughout the country
- eCheck Deposit, which lets you upload a photo of your check from your cellphone
- The ability to “wire” money to or from nearly any U.S. bank account with Zelle
- Online Bill Pay
But the real attraction here is the 0.60% APY earned by accounts with a minimum daily balance above $15,000. Accounts with lesser amounts still earn too — 0.10%. That percentage has come down a bit in the years since we first reviewed Ally Bank, but it’s still better than what you can earn with a savings account from many other banks.
To top it off, there are absolutely zero monthly maintenance fees.
Ally Bank Savings Account
Online Savings
Ally’s savings products also carry a healthy APY, currently at 1.90% for all balances. That’s in line with what you’ll find at other online banks, and definitely higher than what you can earn from many brick-and-mortar institutions.
As with the checking account, there are no monthly maintenance fees. You can also deposit your checks using your phone with eCheck Deposit technology, and you’ll receive 24/7 support from a live customer service agent.
Along with taxable accounts, Ally Bank also offers Roth, SEP and Traditional IRAs with the same 1.90% APY.
| Available For | Taxable, IRA |
|---|---|
| Account Fees | None |
| Savings Rates |
|
Ally Bank Money Market Account
Money Market
Ally Bank’s savings accounts are limited to six free transactions per month. If you’d like to save but want to be able to write a check or use a debit card connected with your account, check out Ally Bank’s money market accounts. While these accounts don’t earn quite as much interest as the savings account, the APY is still higher than the checking option, and you have unlimited deposits and ATM withdrawals (up to six additional transactions are allowed).
| Available For | Taxable |
|---|---|
| Account Fees | None |
| Savings Rates |
|
CDs
If you’re looking for certificates of deposit (CDs), Ally Bank also has you covered. With no maintenance fees and competitive rates, these are worth checking out. CDs are available for both taxable accounts and IRAs.
Ally Bank CD Rates
High Yield CD
| Term | Minimum Deposit | APY |
|---|---|---|
| 3 months | $0 | 0.75% |
| 6 months | $0 | 1.00% |
| 9 months | $0 | 1.25% |
| 1 years | $0 | 2.25% |
| 18 months | $0 | 2.31% |
| 18 months | $5,000 | 2.25% |
| 18 months | $25,000 | 2.30% |
| 3 years | $0 | 2.15% |
| 3 years | $5,000 | 2.25% |
| 3 years | $25,000 | 2.30% |
| 5 years | $0 | 2.40% |
Raise Your Rate CDs
| Term | Minimum Deposit | APY |
|---|---|---|
| 2 years | $0 | 2.25% |
| 4 years | $0 | 2.25% |
No Penalty CD
Withdraw your money with no penalties.
| Term | Minimum Deposit | APY |
|---|---|---|
| 11 months | $0 | 1.65% |
| 11 months | $5,000 | 1.90% |
| 11 months | $25,000 | 2.05% |
Pros and Cons
Pros
- No Fees — Ally Bank charges zero maintenance fees.
- No Account Minimums — No minimum amounts are required to open or maintain an account.
- Interest-Paying Checking — Put your money to work for you with an interest-paying checking account.
- 24/7 Customer Service — You can always reach a live human for assistance.
- Competitive Rates — Ally Bank’s APYs beat the pants off most brick-and-mortar bank accounts and are in line with what other online institutions have to offer.
- Easy-to-Use Online Interface — Ally Bank’s online dashboard is a no-brainer.
- eCheck Deposit — Snap a photo of your check and upload it. You’re done!
- Ally Invest — If you’re looking for one solution to both your banking and investing needs, Ally has you covered there too.
Cons
- Transaction Limits for Savings — After six transactions per month, you’ll have to pay $10 per exchange with the savings accounts. If you intend to withdraw or transfer more than this, check out the money market accounts.
- No Cash Deposits — You can’t deposit cash into your accounts.
- No Brick-and-Mortar Locations — If you still want to have face-to-face contact with a bank employee, Ally is not for you.
Summary
Ally is a solid online bank with good checking and savings account options. After all, you just can’t beat zero fees. And the company has a record of dependable and friendly live customer service, available 24/7.
The company appears to have shed the negative attention brought to GMAC during the financial crisis of the last decade. (And it’s certainly not the only bank that fell on tough times.) With the past behind it, Ally Bank is looking to the future.
As with most online banks, you won’t be able to deposit cash, which is a consideration if you find yourself often needing to do so. And with its savings account, monthly transaction No. 7 and following will be charged a $10 fee.
But if you want to park your money in a savings or even checking account hassle-free, this is a good solution for you.