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In this Ally Bank review, we’re going to cover the pros and cons of Ally’s four main banking products:
- Online checking
- Online savings
- Certificates of Deposit
- Money market accounts
Banks have never been the most exciting businesses to run or work with. Everyone needs a bank account, but it’s hard to tell the difference between two banks.
One thing that has made the banking world more exciting in recent years is the rise of online banking. Where before you had to physically visit a bank to deposit money, make a withdrawal, or set up transfers, online banks put that power in the palm of your hand.
Even better, online banks are much cheaper to run than traditional brick-and-mortar operations. While many banks nickel and dime their customers to squeeze out extra profit, online banks are able to offer low fees and great rates while making enough to keep operating.
The combination of their convenience and low cost makes online banks the way to go, especially if you’re tech-savvy.
Ally Bank is 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, no problem. Still, you want to know all the details before you commit.
Ally Bank Review at a Glance
- Great interest rates. You’ll be hard-pressed to earn more elsewhere.
- No or low fees. You can easily do all of your banking for free with Ally.
- Easy access to your money. $10 in ATM fee waivers each statement makes it easy to use any ATM you want.
- Great customer service. You can reach Ally by phone or email 24 hours a day.
- No physical branches. If you like visiting your bank and speaking to people face-to-face, look for a more traditional bank.
- Some products are unnecessary. For example, the No Penalty CD is generally inferior to the Online Savings account. The only time it would be better is if there is a huge drop in interest rates, which is uncommon.
Best for: Ally Bank is a great fit for almost anyone. However, if you prefer to do your banking in person, you’ll either need to look elsewhere or open another account with a local bank.
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.
In short, the company has nearly a century of experience in providing banking services, so you can rest easy knowing that many satisfied customers have come before you.
Interest Checking Ally Bank Account
Everyone needs a checking account. Ally Bank’s aim is to be a full-service banking operation, so it offers its own interest checking account.
Unlike most brick-and-mortar banks, which barely pay interest on savings account balances, Ally Bank pays interest even on the money in your checking account. While the rate is nothing to write home about, it’s exciting to get paid to have a checking account instead of the other way around.
You can earn an increased rate if you keep at least $15,000 in your Ally checking account. However, the Ally Bank online savings account pays far more interest, so it makes more sense to keep your extra cash in a linked savings account to maximize your interest earnings.
No Maintenance Fees or Minimum Balance
One of the most important aspects of a bank account is its maintenance fee. You should never pay a bank a fee for the privilege of storing your money. Banks should pay you because they use your deposits to finance their other activities.
Ally is true to this ideal, not charging any monthly maintenance fees and not forcing you to jump through hoops to avoid penalties.
Even better, there’s no minimum balance required to open the account or keep it open.
ATM Fee Refunds
If you like to pay with cash, you probably visit ATMs on a regular basis. The trouble with ATMs is that many of them charge fees when you use them.
Ally offers up to $10 in ATM fee reimbursement per statement cycle. That means you can use any ATM you’d like without having to worry about paying to access your funds.
No Fees for Checks
Most payments nowadays are made online. However, there are still certain occasions when paper checks are the best (or only) option. Ally offers free checks to its customers, so you don’t have to pay for a checkbook you’ll hardly ever use.
Online Savings Ally Bank Account
The purpose of a savings account is to keep your money safe and, ideally, earn some interest in the process. Ally’s Online Savings Account accomplishes both.
These days, most brick-and-mortar banks offer around .1% interest on your savings account deposits. Some banks pay as little as .01%, which might as well be nothing at all.
One of the hallmarks of online banks is their high interest rates on deposits. Ally is no different, offering rates ten, twenty, or fifty times higher than brick-and-mortar banks.
Interest rates are constantly changing, so you’re best off visiting Ally’s site to get the most recent rates.
No Maintenance Fees or Minimum Balance
As I mentioned before, you should never pay a bank for the privilege of keeping your money in an account. Ally charges no monthly maintenance fees for its savings account.
Ally Bank CD Rates and Types
Certificates of deposit are long-term savings vehicles that let you sacrifice some flexibility for increased interest rates.
Ally offers three types of CDs: the High Yield CD, the Raise Your Rate CD, and the No Penalty CD:
High Yield CD: a standard certificate of deposit with terms from 3 to 60 months.
Raise Your Rate CD: 2- and 4-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: 11-month term. You can make a withdrawal at any time, penalty-free, and keep your accumulated interest.
Ally Bank CD rates, other than the No Penalty CD, are higher than its online savings account. If you’re able to commit your money and want to earn the extra interest, then consider opening a CD account.
There’s little reason to open a No Penalty CD, however. It functions more like a savings account than a CD, but it pays a lower rate, so you get no benefit from opening the account.
Like savings and checking accounts, all of Ally Bank’s CDs are protected by the FDIC. They offer a great way to earn a bit more interest while keeping your money safe.
Money Market Account
Allly Bank’s money market accounts combine the interest rates of savings accounts with the flexibility of checking accounts.
The main difference between Ally’s checking and money market accounts is the way you access your money. With a money market account, you can use a debit card and checks to pay for purchases from your account.
Ally’s money market account offers three rate tiers based on the balance in your money market accounts. The rates tiers are:
- Less than $5,000
- $5,000 – $24,999.99
- More than $25,000
Regardless of your balance, you’ll earn a much lower rate than you would earn from an Ally Bank Online Savings Account. If you want to maximize your interest earnings, you should open separate checking and savings accounts.
No Maintenance Fees
If you do decide to open a money market account, you can rest easy knowing that there are no monthly maintenance fees or minimum balances.
Ally Bank FAQs
We’ve covered the main benefits of Ally’s primary banking products. Now let’s take a look at some of the most common questions you might still be asking.
Is Ally Bank Safe?
One of the first things you want to know about your bank is whether it’s a safe place to keep your money. You can rest assured that Ally Bank is just as safe as any other bank in the United States.
Ally is insured by the FDIC up to the $250,000 maximum allowed by law. If Ally goes under, you’ll be reimbursed for the amount you lost, up to $250,000.
Protection from Hackers
As an online bank, it’s understandable that you’d be worried that Ally could be susceptible to cyber attacks, putting your money at risk.
Ally uses all of the latest standards in online data safety, including encryption, multi-factor authentication, and automatic account monitoring for fraud.
What Other Services Does Ally Bank Offer?
Ally offers a wide variety of other banking services, making it possible to manage your entire financial life with a single bank. Some of the services offered by Ally Bank are:
- Credit cards
- Auto lending
- Home lending
- Home refinancing
- No-Fee Individual Retirement Accounts (IRAs)
- Self-directed investing
- Professionally managed investment portfolios
- Foreign exchange trading
Ally generally has low fees for all its banking products and service. While its best services are in the world of banking and lending, the convenience factor of having your investments with the same institution is worth considering.
Ally Bank Review Conclusion
Overall, I would highly recommend working with Ally Bank. It offers high rates, low fees, an easy-to-use app, and great customer service. There’s not much that can go wrong if you bank with Ally.
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