An Online Bank With a Full Range of Products
Digital banking services have been around, and popular, for a while now. And since the pandemic, the number of users is expected to grow significantly, surpassing 200 million by 2022.
While traditional brick-and-mortar banks expand their reach online, digital-only or e-banks have already been the way to go for millions of Americans. They offer online access to many of the account features and services consumers need and want.
Additionally, online banks can save you money. Less overhead — after all, no physical buildings with employees — can translate into lower monthly maintenance fees and higher interest rates for you.
For customers who don’t want to be tied to a physical location and want the freedom to bank from their mobile phone or device wherever they are, an online account is worth exploring.
If You’re Interested in Online Banks, Check Out Ally
Ally Bank is one such online-only financial institution. It’s actually been around for over a century, but you probably didn’t hear about it until the last decade.
Ally has been in the news in 2021 because it eliminated all overdraft fees for its accounts. Ally had put the fees on pause through the pandemic but then decided in June to eliminate them permanently.
The bank started out in 1919 as GMAC, General Motors’ finance division. But in 2009, the company rebranded as Ally Financial, Inc., a leading digital financial services organization that offers everything from checking and savings accounts to home and auto loans to investment accounts.
Ally Financial’s portfolio includes:
- Ally Bank
- Ally Invest
- Ally Home
- Ally Lending, as well as Ally Corporate Finance and Ally Dealer Financial Services.
Our in-depth Ally Bank review paints a full picture of the institution, but specifically focuses on its checking and savings accounts. This review also includes information about Ally’s money market accounts, CDs, loans and investment options, as well as a review of Ally’s mobile app, level of convenience and customer service.
What Is Ally Bank?
Ally Bank is an FDIC-insured online-only banking institution offering an array of personal finance services, beginning with its Online Savings and Interest Checking accounts. You can open a money market account or invest in CDs with High Yield CD, Raise Your Rate CD and No Penalty CD options. Ally Bank also offers competitive home and auto loans (with a history in the automotive business), multiple IRAs and various investment options.
Ally Bank boasts a wide shelf of trophies, including best bank and best online bank awards from organizations such as MONEY Magazine and Kiplinger’s. Check out its latest awards here.
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Pros and Cons of Online Banking With Ally
Let’s weigh the pros and cons of this institution for potential Ally customers.
Pros
There’s plenty to like about Ally Bank:
- Higher annual percentage yield (APY) for savings accounts than the national average.
- No minimum balance requirements.
- No monthly maintenance fees
- Transparency regarding any (monthly) fees.
- No overdraft fees, as of June 2021.
- Free debit card.
- Free access to Allpoint ATMs (and up to $10 reimbursement each month when accessing out-of-network ATMs).
- A highly rated mobile app across all operating systems (Apple, Android, Windows).
Cons
Ally Bank does have some downsides to consider:
- No physical branches.
- No cash deposits (since there’s nowhere to accept cash deposits).
- Low APY for checking accounts.
- Limit of six withdrawals and transfers from your savings account per statement cycle. (There’s a $10 fee for additional transfers that’s currently suspended due to COVID-19.)
Banking with Ally: How We Rate It
Ally Bank has a full suite of products, but this review primarily focuses on the checking and savings account options. Further in this review, you can find information on money market accounts, loans and investment options.
Checking: Ally Interest Checking Account
Grade: A-
Despite being called the Interest Checking account, Ally’s checking option offers a somewhat low interest rate: 0.10% on minimum daily balances below $15,000 and 0.50% on minimum daily balances above $15,000 — though we recommend keeping less in your low-yield checking accounts and more in a high-yield savings account.
That said, the Ally Bank checking account still offers a higher APY than many major players, both online and brick-and-mortar. Also notable: The Interest Checking account includes no minimum deposit or balance requirements, and there are no monthly maintenance or overdraft fees.
Even better, Ally’s checking account can be linked to the online savings or money market account, automatically funding the checking account to accommodate your purchase if you would otherwise overdraft. It will do so in increments of $100. This perk, called overdraft transfer service, is optional and free of charge. And as of June 2021, Ally does not charge overdraft penalty fees.
Though Ally is an online bank, depositing checks and withdrawing cash is easy with free access to any of the 55,000 Allpoint ATMs worldwide. If you’re strapped for time and need to transact with an out-of-network ATM, Ally Bank will reimburse you up to $10/month for usage fees.
The Ally Bank Interest Checking account also includes easy mobile check deposit and money transfers via voice with Ally Skill for Amazon Alexa. You can learn more about enabling this feature here.
Savings: Ally Online Savings Account
Grade: A
Ally Bank is one of the best options as far as savings accounts go, especially if you are comfortable with an online-only institution. The Online Savings account currently offers a 0.06% APY that compounds daily; that APY is 5x higher than the national average and is much better than what most traditional banks will offer.
Two other hallmarks of Ally’s Online Savings account: It carries no typical monthly maintenance fees and has no minimum balance requirements. Ally is transparent about the fees it does have, which include excessive transaction fees ($10/transaction — currently suspended) and outgoing domestic wires ($20; incoming wires are free), among a few others.
Ally also offers a few tools that make its Online Savings account even more appealing:
- Savings Buckets: You can categorize your savings into up to 10 buckets for various savings goals, like a vacation, a wedding and a house down payment. No matter which bucket your funds sit in, they’ll still earn the same interest rate and coexist within your online savings account.
- Savings Boosters, or Recurring Transfers: You can “set it and forget it” by setting up recurring transfers from your checking account, forcing you to routinely put money into savings.
- Surprise Savings: Ally does the hard work for you, analyzing your checking account to identify “safe-to-save money” and transferring it from your checking account to your savings account for you.
Convenience: Great Features, But Online Only
Grade: B
In an increasingly digital world, Ally Bank is highly convenient. It offers intuitive mobile check deposit and easy money transfer (via voice, no less!). The mobile app and website (more on that in a second) are both easy to use, and you can easily link checking and savings accounts to fund one another as necessary. The Allpoint network of ATMs is extensive and free to use.
So why not an A+ rating? Ally Bank’s one true detriment — and the detriment of all online-only banking institutions — is the lack of a brick-and-mortar location.
Though you can handle all your transactions and banking online with Ally, many customers still prefer physical locations for their sense of security and the feeling of in-person help. While COVID-19 ushered in a newfound acceptance of digital everything, many customers will likely still appreciate physical bank visits for years to come.
Mobile Banking: Ally Mobile App Review
Grade: A
As an online-only institution, Ally Bank offers an intuitive website and highly rated mobile app, available for Windows, Apple and Android devices. You can use the website for a full range of services, but when you are on the go, the app should do just fine.
With the Ally Bank mobile app, you can:
- View account balances.
- Use Ally Assist (Apple only)
- Transfer funds
- Manage one-time and recurring transfers
- Deposit checks via Ally eCheck Deposit
- Pay bills (Apple and Android only)
- Send money with Zelle
At the time of writing, the Ally Mobile app had a 4.7-star rating on the App Store and a 3.7-star rating on Google Play Store. The app is free.
Small Business Banking Options
Currently, Ally does not have small business checking or savings accounts. However, the bank does offer IRA Online Savings available as a SEP (Simplified Employee Pension). Any employer, including self-employed individuals, can open a SEP-IRA to contribute toward their retirement savings.
If you’re looking to set up a dedicated checking or savings account for your business, though, you’ll want to shop around. Instead, consider these alternative banks for small businesses:
- Wells Fargo Initiate Business Checking Account and Business Market Rate Savings Account, loans up to $100,000 and a 1.5% cash-back credit card.
- Chase Business Complete Checking and Business Total Savings, SBA Express line of credit up to $350,000 and Ink Business credit cards.
- Capital One Spark Business Checking and Savings, and 1%, 1.5% or 2% cash-back credit cards.
- Axos Basic Business Checking or Business Interest Checking, Business Savings, and lines of credit or commercial loans starting at $250,000.
- Navy Federal Credit Union for business owners who are veterans, active-duty military, employees of qualified government agencies and their immediate family.
- BlueVine is a financial technology company that offers online-only, fee-free and 1%-interest-earning (yes, really) business checking.
Here are other online banks and credit unions, in general, if you decide that’s your preferred way to bank.
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Ally Bank Account Fees
Ally Bank prides itself on its lack of monthly maintenance fees. In addition, Ally promises no fees for standard or expedited ACH transfers, copies of online statements, incoming wires, postage-paid deposit envelopes or official/cashier’s checks.
However, Ally does have some fees and is transparent about those upon account signup. These fees include:
- Returned deposit items: $7.50
- Excessive transactions: $10 per transaction
- Expedited delivery: $15
- Outgoing domestic wires: $20
- Account research: $25 per hour
Other Ally Bank Products
You can find the full breadth of products on the Ally Bank website, but here’s a good starting point:
Ally Money Market Account
The Ally Bank Money Market Account offers a 0.50% APY and requires no minimum balance. You’ll earn 0.50% whether you have a daily balance of $1,000 — or $100,000 — with this money market account, though keep in mind rates are variable and may change.
There are no monthly maintenance fees, and the account can be opened in the name of a trust. You’re also eligible for a free debit card and checks with the Ally Bank Money Market account. (Note: You’ll need a separate debit card for each checking or money market account you open).
Certificates of Deposit
If you are interested in investing but are risk-averse, consider a certificate of deposit (CD) through Ally Bank. (For beginner investors, check out this intro to CDs.)
Ally Bank offers three CD products. Note: Interest rates vary based on opening deposits and terms. Here are rates for a $25,000 opening deposit in the state of California:
- High Yield CD: 0.55% for a 12-month term; terms range from three months to five years at competitive fixed rates.
- Raise Your Rate CD: 0.55% for a two-year term; two- or four-year terms, and the opportunity to increase rate once over two-year term or twice over four-year term.
- No Penalty CD: 0.50% for an 11-month term; the ability to withdraw all money six days after funding while keeping earned interest and avoiding penalty.
Note: These rates are accurate as of June 24, 2021.
IRAs
You can invest in your retirement through Ally Bank with multiple IRA options:
- Traditional IRA (pretax contributions)
- Roth IRA (after-tax contributions)
- Rollover IRA (if you want to consolidate your 401(k) or 403(b) into a single IRA)
You’ll pay no annual, monthly maintenance or transfer (for rollover IRAs) fees. Ally is also consistent with sharing fees when they do apply. For instance, there’s a $25 IRA account closure fee.
Auto Loans
Ally Bank offers both personal vehicle financing and business vehicle financing. You can also use Ally Bank for a vehicle service contract. Learn more about Ally’s full suite of auto products here.
Personal Loans
Ally Lending helps consumers secure funds for an array of personal needs, from medical treatments to home repairs. Ally offers installment loans, interest promotions (for amounts you feel comfortable paying off quicker) and a fixed annual percentage rate.
Mortgages
With Ally Home, you can choose between a fixed-rate or adjustable-rate loan (or a “jumbo loan” for a high-priced home). Ally offers numerous products and term lengths with down payments as low as 3%.
Already have a mortgage? Ally Bank also has refinancing options available.
Investment Options
Interested in investing? Ally Bank offers plenty of options, including stocks and EFTs, commission-free EFTs, bonds, mutual funds and more. With Ally, you can opt for self-directed trading or a managed portfolio (recommended for beginners).
Ally Bank Offer
Until Sept. 30, 2021, new Ally Invest account holders are eligible for a cash bonus. The minimum deposit to receive a bonus is $10,000. If you meet the requirements and pass the 60-day review period, you’ll be rewarded with between $100 and $3,000 in cash, credited to your account.
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Ally Bank Customer Service
Ally Bank offers 24/7 customer support with an estimated wait time listed on the website.
- Phone Number: 1-877-247-2559
- Phone Number (Outside the U.S.): +1-757-247-2559
- Secure Email: Log in to your account to send a secure message.
- Chat: Available online
Ally offers additional customer service numbers for various products. View the full list here
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Is Ally Bank Right for You?
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Ally Bank is one of the top choices if you are open to the idea of switching to an online bank. The institution offers a full suite of products, so you can move all your banking needs there, or just open one or two accounts and keep other accounts with your current bank or credit union.
Ally Bank might be a good fit if:
- You’re looking for a high-interest savings account.
- You have various savings goals that you need help organizing.
- You’re comfortable with mobile check deposits.
- You’re tech-savvy.
- You’d like a bank with a full suite of products, including loans and investments.
Ally Bank might not be a good fit if:
- You prefer to do your banking in-person at physical branches.
- You need small business banking.
- You make cash deposits regularly.
Our Bank Review Methodology
The Penny Hoarder’s editorial team considers more than 25 factors in its bank account reviews, including fees, minimum daily balance requirements, APYs, overdraft charges, ATM access, number of physical locations, customer service support access and mobile features.
To determine how we weigh each factor, The Penny Hoarder surveyed 1,500 people to find out what banking features matter most to you.
For example, we give top grades to banks that have low fees because our survey showed that this is the No. 1 thing you look for in a bank. Because more than 70% of you said you visited a physical bank branch last year, we consider the number of brick-and-mortar locations. But more than one-third of you use mobile apps for more than 75% of your banking, so digital features are also considered carefully.
Ratings are assigned on a scale of one (worst) to five (best) stars across the following categories:
- Personal checking accounts
- Personal savings accounts
- Convenience
- Mobile banking
- Small-business banking
Credit card and loan products are not currently considered.
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Timothy Moore and Kathleen Garvin are verteran writers on personal finance topics and frequent contributes to The Penny Hoarder.
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