Thanks to online banking, opening a checking or savings account has never been easier.
However, it’s often difficult to pick the best online bank. There are so many variables to consider — interest rates, fees, account minimums, even how you can deposit or withdraw money. And what about customer service or who to contact if you have an issue?
It’s a lot to take in. Fortunately, some banks make it easier to decide if you should bank with them or not. Ally Bank is one of those.
It’s one of the best-known online banks, and it offers some of the best online banking products on the market. You can easily do all of your banking, borrowing, and investing through Ally Bank. But is it the right choice for you?
What is Ally Bank?
Ally Bank was originally founded by General Motors back in 1919 as General Motors Acceptance Corporation. It got its start offering car loans to customers, and it continues to offer those loans to customers today. In 2010, GMAC re-branded as Ally and became a fully online bank, offering banking products, home and auto loans, credit cards, and a wealth management and brokerage platform.
It’s won a number of awards for its services and products and has thousands of positive customer reviews. Ally has a 4.7 of 5-star rating in the Apple store and a 4 of 5-star rating in the Google Play store. There are some complaints, primarily around the functionality of the app and the interest rates decreasing, but overall, customers are satisfied with Ally Bank’s products and services.
To protect customer data, Ally Bank uses all of the latest standards in online data safety, including encryption, multi-factor authentication, and automatic account monitoring for fraud. They also guarantee that you will not be liable for any unauthorized Online or Mobile Banking transaction as long as you report the unauthorized transaction within 60 days from when your statement is made available.
0.5%
APY Accurate as of September 2020
$0
Min. Opening Deposit No monthly service fee
DollarSprout rating
Ally Bank At a Glance:
Ally Bank is an online bank that offers high-interest checking and savings accounts, along with a suite of other financial products including money market accounts, certificates of deposit, managed portfolios, and auto and home loans. Opening an account is quick and easy, and there is no minimum opening deposit required.
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Ally Bank’s Interest Checking Account
You can get started with an Ally Bank checking account by completing the application and funding your account. Although there is no minimum balance required to open an account, you will want to put money into your checking account as soon as possible. If you don’t fund your account within 30 days of opening it, Ally Bank will close the account.
Customers can earn 0.10% on minimum daily balances under $15,000 and 0.25% on balances over $15,000. This is higher than several of its competitors, making it a good choice for those looking to earn interest on their checking account.
In addition to its higher-than-average interest rates, Ally Bank’s checking accounts come with no account maintenance fees, is FDIC-insured, and there is the option to move the money into a trust. Should you need to withdraw cash, there is a no-fee network of 43,000 Allpoint ATMs you can access. However, if you need to use an out-of-network ATM, you can receive up to $10 per statement in reimbursements for ATM withdrawals.
To fund your account, you can transfer money from another bank account or remote deposit a check using your smartphone with Ally eCheck DepositSM, use a wire transfer, or set up direct deposit. Other options for moving your money between accounts include using Zelle® or Ally Skill™ for Amazon Alexa.
Unfortunately, you can’t deposit cash into your Ally Bank Interest Checking Account. If that’s something that you do often, you might want to consider using a traditional brick-and-mortar bank instead.
Other checking account features
With an Ally Bank Interest Checking account you can also:
- Pay bills using the free online Bill Pay tool
- Send a wire transfer
- Obtain a cashier’s check
- Get cash back when you shop using your debit card
- Request free paper checks should you need to pay with one
Although many of the checking account features and services are free, there are fees for some including stop payments, same-day bill pay, outgoing wires, and rush delivery of debit cards and other products. These are typical of other banks, but since Ally is an online-only institution, they’re able to offer lower fees than brick-and-mortar banks.
Before signing up for an account, make sure to review their fee schedule so you’re not surprised. The fee schedule will also show you how quickly your money is available in your account, helping you plan for purchases, bills, and other expenses.
Ally Bank Online Savings Account
Ally Bank’s Online Saving Account has similar features to its checking account: no monthly maintenance fees, no minimum balance or opening deposit, and offers one of the best online savings accounts with a higher-than-average interest rate (0.80% as of September 2020).
The savings account is also FDIC-insured, and the process to open and fund an account is the same as opening a checking account.
You can fund your account by manually transferring money when it makes sense for you. There’s also the option to use what Ally Bank refers to as boosters — automatic recurring transfers and “surprise savings,” which are deposits Ally Bank makes on your behalf after analyzing your linked checking accounts and determining how much extra you have available to save.
The savings account offers the option for you to divide your money into savings buckets, their version of digital envelopes. You can establish up to ten and you have the freedom to move them around or change them if you need or want to. Users also have the ability to name the buckets and report that the nicknames really help them get a picture of what they’re saving for.
Ally Bank also provides personalized recommendations to help you save more.
As with the checking account, make sure you read and review the fee schedule to see which transactions and features come with a fee and which do not.
Withdrawal limits
According to its website, you can only withdraw or transfer money up to six times per month from your savings account. This is typically the limit for “convenient” transfers, which include mobile and online transfers, set by the Federal Reserve. However, the Federal Reserve has recently changed that requirement due to the impacts of COVID-19.
Ally’s customer service confirmed that the bank still has six-transfer limit for its savings accounts. However, the bank is currently refunding the $10 excessive transaction fee for transfers that exceed this limit.
CDs and Money Market Accounts
In addition to traditional checking and savings accounts, customers have access to CDs and money market accounts through Ally Bank.
Types of CDs
Certificates of deposit (CDs) are long-term savings vehicles that let you sacrifice some flexibility for increased interest rates. Ally offers three types of CDs:
- High Yield CD: a standard certificate of deposit with terms from 3 to 60 months.
- Raise Your Rate CD: Two- and four-year terms. You’ll also have the opportunity to increase your rate over the course of your term period if your balance tier goes up.
- No Penalty CD: Eleven-month term. You can make a withdrawal at any time, penalty-free, and keep your accumulated interest.
All of Ally Bank’s CDs come with a loyalty reward of 0.05% when you renew a CD into another Ally Bank CD at the end of your term. They are FDIC-insured, come with no maintenance fees, and you can access them from the app. Ally Bank also offers the option to build a CD ladder, and the High Yield and Raise Your Rate CD are available as IRAs as well.
You can fund your CDs by transferring money from a linked account, check, or wire transfer. There is no minimum to open a CD, but you must fund the account within 60 days or it will be closed.
All CD accounts have a maturity grace period of ten days. During this period, you can either withdraw funds, including interest, without penalty, add funds to the account, or let it automatically renew.
Early withdrawal penalties
One risk of opening a CD versus a traditional savings account is the penalties involved if you need to access your money before the maturity period. With Ally Bank’s CDs, the early withdrawal penalties vary depending on the CD you purchase. For example, if you purchase a five-year High Yield CD, your early withdrawal penalty is 150 days of interest.
However, if you purchase a No Penalty CD, there is no penalty and you can withdraw your full balance and interest any time after the first six days following the date you funded the account, according to the site.
Money Market Account
The Ally Bank money market account (MMA) is similar to its checking account but with one key difference — you earn a higher interest rate. At 0.50% APY, it’s a higher rate than many of its competitors and that rate applies to all balance tiers.
You get the same functionality with an MMA as you do the checking account. This includes the ability to access the fee-free Allpoint ATM network, deposit checks remotely, and no monthly maintenance fees.
You fund your account the same way you would an Ally Bank checking and saving account, and, like the checking and savings accounts, there is no minimum balance requirement. There is also the same 30-day requirement to add money to the account or risk the bank closing it.
You can view the fee schedule to see which features are fee-free and which ones aren’t.
MMA vs. checking vs. savings
Which account you choose depends on your goals for your money
In some instances, the MMA makes more sense. For instance, if you want a higher interest rate with the functionality of a checking account, the MMA is probably best. However, unlike the checking account, you are subject to the six-withdrawal limit and you can’t use the bill pay feature. If you plan to withdraw a lot of cash or want an easy way to pay bills online, you might prefer the checking account.
It also has a lower interest rate than Ally Bank’s savings account. If you’re looking to use this as a way to save money for a long- or short-term goal, the savings account is likely your best option.
Related: The Best Money Market Accounts of the Month
Other Ally Bank Services
Ally Bank offers a wide variety of other banking services, including:
- Credit cards
- Auto lending
- Home lending
- Home refinancing
- No-Fee Individual Retirement Accounts (IRAs)
- Professionally managed investment portfolios
- Self-directed investing
- Foreign exchange trading
Ally Bank generally has low fees for all its banking products and services. While its best features are the checking and savings accounts, it might be worth researching the company’s other products. The convenience factor of having your investments and loans with the same bank might make it a smart decision.
However, for investing and lending, you should consider comparison shopping with other banks or platforms like Robinhood or M1 Finance. You can also check out our list of best online brokers to help you make an informed decision.
Ally Bank Review Summary
Ally Bank offers no minimum balance or opening deposits, low to no fees on features and services, and quality customer service. It is also transparent about how their services work, how customers feel about their products, and strives to make their products accessible for all, regardless of income. The above-average interest rates and easy-to-use platform make it a solid choice for customers looking for an online bank.
You might be able to find better investing and loan products elsewhere, but it is worth it to check out what they offer, especially if you prefer keeping all of your accounts in one place.
