Ally Bank Review: Competitive Rates for Online Customers

Learn why Ally is one of the top online banks.

Ally Bank is an online-only financial institution that considers itself an alternative to traditional brick-and-mortar banks. But that doesn’t mean that Ally’s history is ankle-deep: The financial institution has been around since 1919. It got its start as the financing division of General Motors: GMAC, which pioneered financing for auto dealerships and customers.

As the decades passed, the business of auto loans evolved, and so did GMAC. In 2009, GMAC Bank rebranded to Ally Bank. Since then, Ally Bank has established itself as one of the best online banks, with exceptional customer service, high annual percentage yields and low fees. In fact, GOBankingRates named Ally the Best Online Bank for the fifth year in a row in its 2019 Best Banks rankings.

You may want to explore all the details of what Ally Bank offers to help you decide if it’s the right online bank for you. Before you dive in, here’s a quick look at the topics this Ally Bank review will cover:

Who Is Ally Bank Best For?

If you think Ally may be the bank for millennials, you’re not wrong. According to Ally Financial’s 2018 annual report, more than half of Ally’s new deposit customers in 2018 were from this age group. However, millennials are not the only customers Ally is interested in. Its banking style is perfect for anyone looking for products and services such as:

  • Savings accounts with no minimum requirements and competitive earnings
  • Free checking accounts
  • Daily compound interest
  • Award-winning, 24/7 customer care

The pros and cons of Ally Bank vary depending on the financial product or service. Plus, because Ally is an online-only bank, it can make it more complicated to access your money. Here’s what you need to know:

Pros and Cons of Ally Bank
ProsCons
Competitive rates for savings account and certificates of depositDepositing cash directly into your Ally bank account is not an option
No monthly feesWithdrawals can take several days
No minimum opening balance requirementsDaily $1,000 limit on ATM cash withdrawals
Over 55,000 Allpoint ATMs available worldwideSome high APY rates are only available with certain daily minimum balance

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Who May Want To Skip Ally Bank?

If banking apps were set up like a popular dating app, would you swipe left if you noticed phrases like “no one-stop shopping” or “inconvenient ATM locations” in a bank’s profile?

Here are some reasons why Ally Bank may not be a match for you:

  • Less personal relationship with bank: If money confuses you or makes you all up in your feelings, then the option to have a face-to-face relationship with tellers and bankers may be better suited for you. Currently, Ally has more than 8,000 team members “committed to doing it right,” but you may never speak to the same member of its team again. Big life and financial choices — like buying a home — may feel more comfortable with someone you’ve seen sit at the same desk for years.
  • ATMs aren’t always convenient: Finding a no-fee ATM for your Ally Bank account takes some sleuthing that you may find annoying. Many ATMs are located in stores with independent hours.
  • No quick access to your money: If you do not have a smartphone or participate in direct deposit, then banking will certainly take longer. The other options for depositing funds are wire transfers from any U.S. bank or mailing the deposit to the bank with a postage-paid envelope.
  • Not a one-stop shop: One-stop shop experiences have become commonplace. You can buy a bike, an Ariana Grande-inspired Starbucks drink and your migraine medication all in one megastore. With Ally Bank, you may have to make multiple phone calls to its customer service team while driving to an ATM if you want that one-stop shopping experience. Being an Ally Bank customer may take more footwork than you’d like.

These drawbacks may sound annoying, but Ally Bank is transparent about this and more on its website. If you’re still interested in Ally Bank, stick around. The bank’s rates and account features are what really make it shine among its competitors.

Here’s an overview of what Ally Bank is best and worst for:

Ally Bank’s Strengths and Weaknesses
Best for:Worst for:
High APY on savings accountATM accessibility
Transparency of fees and chargesUpfront auto loan rates
Earning daily compound interest on a variety of accountsCustomers who make consistent cash deposits and withdrawals
Low or no fees; no deposit minimumsCustomers who prefer face-to-face interactions when making financial decisions or any banking transactions

Related: Here’s Your Ally Bank Routing Number

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Types of Accounts Available

Ally Bank offers savings, checking and money market accounts, as well as certificates of deposit, individual retirement accounts and more. Here’s a look at the different account types, features and rates.

Ally Bank Accounts at a Glance
AccountFeaturesFeesRates
Savings
  • Interest compounded daily
  • No minimum opening deposit
  • No monthly maintenance fee
  • Overdraft item paid or overdraft item returned (maximum of one fee per day): $25
  • Excessive transactions fee: $10 per transaction
  • Expedited delivery: $15
  • Outgoing domestic wires: $20
  • 1.80% APY on all balance tiers
Money Market Account
  • No minimum deposit or fees to open an account
  • Interest compounded daily
  • Any Allpoint ATM usage in the U.S. is free
  • No monthly maintenance fee
  • Returned deposit item: $7.50
  • Overdraft item paid or overdraft item returned (maximum of one fee per day): $25
  • Excessive transactions fee: $10 per transaction
  • Expedited delivery: $15
  • Outgoing domestic wires: $20
  • 1.00% APY for a minimum daily balance below $25,000
Interest Checking
  • Mobile check deposits
  • No minimum opening deposit
  • No monthly maintenance fee
  • Returned deposit item: $7.50
  • Overdraft item paid or overdraft item returned (maximum of one fee per day): $25
  • Excessive transactions fee: $10 per transaction
  • Expedited delivery: $15
  • Outgoing domestic wires: $20
  • 0.60% APY for a minimum daily balance of $15,000
CDs
  • Interest compounded daily
  • Automatic renewal at maturity
  • 10-day best-rate guarantee
  • Early withdrawal penalty, except for the No Penalty CD
  • High Yield CD: 0.75% APY to 2.30% APY; 2.15% APY for 12 months
  • Raise Your Rate CD: 2.15% APY for 2 years
  • No Penalty CD: 2.00% APY for $25,000 minimum opening deposit
IRA Savings
  • Interest compounded daily
  • Available as traditional, Roth and SEP IRA
  • No minimum opening deposit
  • No monthly maintenance fee
  • Returned deposit item: $7.50
  • Overdraft item paid or overdraft item returned (maximum of one fee per day): $25
  • Excessive transactions fee: $10 per transaction
  • Expedited delivery: $15
  • Outgoing domestic wires: $20
  • 1.90% APY on all balance tiers
IRA CDs
  • Interest compounded daily
  • Available as traditional, Roth and SEP IRA
  • No minimum opening deposit
  • No monthly maintenance fee
  • IRA High Yield CD: 0.75% APY  to 2.45% APY; 12-month CD: 2.35% APY
  • IRA Raise Your Rate CD: 2.30% APY; 2-year CD: 2.30% APY
Managed Portfolios
  • Minimum investment of just $100
  • No advisory fees, annual charges or rebalancing fees
N/A
Self-Directed Trading
  • Comprehensive research and market analysis tools are available
  • Commission-free U.S. exchange-listed stocks, exchange-traded funds and options
  • Customers trading options pay a fee of 50 cents per contract
N/A

Information on accounts and on rates on IRA products is accurate as of Sept. 20, 2019. All other rates are updated weekly.

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Online Savings Account

A high APY and lack of monthly maintenance fees make Ally’s online savings account one of the most appealing options in the industry.

Features

The features of this account speak for themselves:

  • No minimum deposit
  • No monthly maintenance fees
  • Competitive APY
  • Interest compounded daily
  • No fees on standard or expedited ACH transfers
  • Free cashier’s checks
  • Free domestic and international incoming wires

Pros

One of the greatest advantages of Ally’s savings account is its competitive APY on all balance tiers. See for yourself how Ally Bank’s APY compares to the following examples of standard rates that are available at other banks:

Savings Rates at Ally and Other Banks
BankAPY
Ally Bank1.80%
Bank of America0.03%
Capital One1.90%
Chase0.01%
Discover1.90%
Marcus by Goldman Sachs1.90%
U.S. Bank0.04%
Wells Fargo0.05%
Rates are updated weekly.

Cons

Because Ally is an online-only bank, there’s no way to make a cash deposit into your bank account. In addition, withdrawals from this account can take up to three business days, depending on when you initiate the transaction.

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    Money Market Account

    Ally Bank’s money market account is the marriage of a savings account and a checking account. It features rates that start at 0.90% APY and offers instant access to cash via ATMs.

    Features

    Here’s what you need to know about the account:

    • No minimum deposit or fees to open an account
    • Interest compounded daily
    • Any Allpoint ATM usage in the U.S. is free
    • Unlimited ATM withdrawals plus six additional transactions
    • Reimbursement of up to $10 per statement cycle for ATM charges within the U.S.
    • Includes a debit card and free standard checks

    Pros

    Ally Bank’s money market account offers a 1.00% APY for a minimum daily balance of $25,000 and a 0.90% APY for a minimum daily balance below $25,000. Even though there are higher money market account rates available from other banks, Ally Bank’s money market account is still competitive. Plus, the deposit minimums elsewhere will likely be higher.

    Cons

    The account is limited to six non-ATM withdrawals per statement cycle, and a $10 charge applies for each additional withdrawal during the statement period.

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      Interest Checking

      Ally’s interest checking account is much less restrictive than its savings and money market offerings. Here’s a look at its features, pros and cons.

      Features

      Ally Bank’s interest checking account offers features that are tailored toward its unique digital banking, including the following: 

      • Interest compounded daily
      • Mobile check deposits
      • Any Allpoint ATM usage in the U.S. is free
      • Reimbursement of up to $10 per statement cycle for ATM charges within the U.S.
      • Free standard checks and debit card

      Pros

      The amount of money you have on deposit can get you some outstanding results. Although Ally’s interest checking account features a 0.10% APY for a minimum daily balance of less than $15,000, it jumps to 0.60% for a minimum daily balance of $15,000. For balances of $15,000 and above, Ally’s rate is very competitive.

      Cons

      The cons of an interest checking account depend on your preferences. Here is one possible inconvenience: Ally does not have physical branches, so face-to-face transactions are not available.

      Ultimately, this account works best for those who are set up for success with a $15,000 minimum daily balance and the ability to do the majority of their banking transactions online or with a card.

      See: 11 Banks Offering Free Checking With No Minimum Balance

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        CDs

        Ally offers a variety of CD rates and terms, from three months to five years, depending on which CD you choose. Some CDs can be easily liquidated, whereas you can earn high interest with more standard options.

        Features

        All CDs have these features in common:

        • Interest compounded daily
        • Automatic renewal at maturity
        • Ten-day best-rate guarantee: If you fund your CD within 10 days of your opening date and the rate rises during that period, you’ll receive the best rate Ally offers for your balance and term

        Pros

        Each different type of CD offered by Ally has competitive rates. For example, the bank’s High Yield CD — which offers terms of three months to five years and rates from 0.75% APY to 2.45% APY — has a 12-month APY of 2.35%. At this rate with a $5,000 deposit, you can earn $117.50 a year.

        The Raise Your Rate CD has two-year and four-year terms, with an APY of 2.30% for both terms. With this CD, you have the option to increase the rate once over the two-year term or twice over the four-year term if Ally’s rate on your term and balance tier rises. With a $5,000 deposit at 2.30% APY, you could earn $232.64 over the two-year term.

        Ally’s No Penalty CD offers lower rates of 1.70% APY to 2.10% APY, with an 11-month term. With a $5,000 minimum balance, you can earn 1.95% APY — or $89.30 per year. In addition, complete withdrawal of funds is available after the first six days following the date you funded your CD, and you can keep the interest earned.

        In addition, Ally is currently offering a 0.05% Loyalty Reward when you renew your High Yield, Raise Your Rate or No Penalty CD to any of the CDs the bank offers. 

        Cons

        The biggest con for Ally’s High Yield and Raise Your Rate CDs are the withdrawal penalties, which are common among banks. The way to avoid these penalties is to opt for the No Penalty CD, which will allow you to withdraw your money completely after the first six days following funding with no fees. However, you won’t get as high a rate for the flexibility.

        Check Out: Investing In Certificates of Deposit — The Ultimate Guide

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          Individual Retirement Accounts

          Even if you don’t have large chunks of money to squirrel away or haven’t even started to plan, Ally Bank has you covered. It offers a variety of IRAs, with many different APYs available.

          Features

          Ally Bank’s IRA options — IRA High Yield CD, IRA Raise Your Rate CD and IRA Online Savings — all have these features in common:

          • Interest compounded daily
          • Available as a traditional, Roth and SEP IRA

          Pros

          As with its CD rates, Ally Bank’s APYs for IRA products are some of the highest among its competitors — especially when compared to traditional brick-and-mortar banks. Ally also offers a 90-day best-rate guarantee for the High Yield and Raise Your Rate CDs — meaning if you fund within the first 90 days, you’ll receive the best rate Ally offers on your term and balance on the date of opening or the date of funding.

          Cons

            The cons for IRA CD accounts are the potential fees you might have to pay if you happen to withdraw your money early. Plus, IRA Online Savings’ rate is variable and may change after you open the account.

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              Investment Options

              Ally Invest offers investment options for its customers, depending on whether you want to do it yourself or use Ally’s automated service. Here’s a look at both.

              Features

              Whether you are a self-directed investor or need a managed portfolio, Ally Bank offers unique features:

              • Choice of self-directed trading or automated portfolios managed by investment specialists
              • Account access across multiple devices, including via mobile apps for iPhone and Android
              • 24/7 access to brokers for investment questions
              • Member of the Securities Investor Protection Corp., which covers customer claims up to $500,000, including $250,000 in cash

              Pros

              Ally Invest Managed Portfolios, which offers a portfolio for every type of individual investor, requires a minimum investment of just $100, with no advisory, annual or rebalancing fees.

              As of Oct. 9, Ally Invest Self-Directed Trading features commission-free U.S. exchange-listed stocks, ETFs and options. Customers trading options pay a fee of 50 cents per contract. No minimums or hidden fees apply. In addition, comprehensive research and market analysis tools are available to support a variety of investment strategies.

                Cons

                Ally does not offer direct access routing. Although this potential drawback may not be a big deal for passive investors, more serious investors might be disappointed. Direct access routing allows you to achieve the best and most efficient liquidity and also be eligible to earn commission rebates.

                Also See: Best Investment Apps of 2019-2020

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                    Loans

                    Ally offers auto and home loans as part of its suite of products and services. Here are the features, pros and cons.

                      Features

                      Both Ally Bank’s auto financing options and home loans have features that can fit your financial needs, including the following:

                      • Accessible customer service and support from loan expert team to assist you during the home loan process
                      • Flexible auto financing or leasing terms

                      Pros

                      Ally will assign you a dedicated home team to help guide you through the home loan process, keep you updated and answer any questions you may have. Plus, Ally customers with an existing account can take advantage of $500 off closing costs.

                      Ally offers both purchase and lease options for customers who are looking to finance a car. Online account management and a mobile pay app are also available.

                      Cons

                      Some might find the available types of home loan options to be limited. In addition, Ally doesn’t list its auto loan rates on its website. Instead, you’ll have to visit a dealer that offers Ally auto financing options and negotiate from there.

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                          How To Bank With Ally

                          Ally Bank is strictly online. Navigating your finances without being able to visit a branch in person is made easy via online banking and 24/7 customer service. Plus, as an Ally Bank customer, you can access Allpoint ATMs — which are available in multiple countries — for free in the U.S.

                          Technology

                          Ally’s mobile app is user-friendly and is comparable to all major mobile banking apps for iOS and Android. You can also move your money into another account using your voice via Ally Skill on Amazon’s Alexa  — or with your fingertips via Zelle.

                          How To Make a Deposit

                          The biggest difference between Ally and brick-and-mortar banks is depositing cash. Ally does not accept cash deposits, but it does offer various ways to add money to your accounts, including transferring money from another bank or an Ally account — or by using Ally eCheck Deposit. Wire transfers or mailing a check are other options.

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                            Fees

                            Ally Bank does charge fees in relation to some of its products, but overall, they are reasonable when compared to average fees charged by other banks. For example, Ally charges an overdraft fee of $25 if you exceed the balance in your checking account. In contrast, the typical overdraft fee that banks charge is $35, according to the Center for Responsible Lending, which makes Ally’s overdraft fee $10 cheaper.

                            Also, the bank only charges one overdraft fee per day — no matter if you have multiple items presented. And you won’t be charged an additional fee if your account balance is negative over an extended period.

                            For returned items, Ally charges only $7.50 per item.

                            At Ally, you’ll never pay fees for any of these products or services:

                            • Monthly maintenance
                            • Domestic or international incoming wires
                            • Cashier’s checks
                            • Standard or expedited ACH transfers
                            • Standard checks for interest checking and money market accounts

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                            Availability of Funds

                            Your funds are available to you with every Ally account, and interest checking and money market balances can be accessed via ATM or by using the cash-back feature during a point-of-sale transaction. Here are some potential issues with accessing funds on the spot:

                            • Proximity to Allpoint ATMs and whether ATMs have 24-hour access
                            • With most CDs, early withdrawal penalty applies
                            • Savings withdrawals are only available via online funds transfer, outgoing wire transfer, telephone transfer or check request

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                              Is Ally the Bank for You?

                              Now that you’ve learned all about what Ally Bank offers, here’s a quick recap of where the bank shines and where it might fall short.

                              Benefits

                              • A range of accounts earn daily compound interest
                              • High APY for savings account
                              • No minimum balance to open checking or savings account

                              Drawbacks

                              • No physical branches, which means no face-to-face relationships with bankers
                              • No-fee ATMs are not readily accessible everywhere, and you might find it to be a bit of a chore to find one near you
                              • You can’t deposit cash directly into your accounts

                              Ally Bank reflects the future of banking with its online business model that includes a full suite of products and services. This departure from the traditional brick-and-mortar institution may be most appealing to technologically fluent millennials, but Ally Bank welcomes everyone.

                              Even if the prospect of an online-only bank isn’t entirely appealing to traditional bank customers, some may be able to be swayed by the bank’s competitive APY rates and 24/7 customer service and give banking at Ally a chance.

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                                More From GOBankingRates

                                Unless otherwise noted, information on accounts and rates is accurate as of Sept. 20, 2019. This content is not provided by Ally Bank. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by Ally Bank.

                                About the Author

                                Jared Nigro is from Pittsburgh, which is obvious by the way he gravitates toward cheese at parties. He is a comedy writer from The Groundlings Sunday Company, Upright Citizens Brigade and has his own digital show on Comedy Central called “Broken People.” When he isn’t being funny, he’s reading books on debt and finance and listening to his favorite finance podcast, ChooseFI.