Ally Bank Review – Online Bank With No Minimum Balance Required

Online banks are powerful personal finance tools that offer convenient access to funds – but, not all are created equal. As one of the first online-only institutions, Ally Bank has developed a reputation for responsive customer service, high interest rates on checking and savings accounts, and reasonable fees.

Like many online banks, Ally has no physical branches, but it is an FDIC member, which means its customers’ deposits are insured up to $250,000. Despite the lack of a physical footprint, it has one of the most generous ATM fee reimbursement schemes around. Ally customers enjoy fee-free access to virtually every U.S. ATM.

Since its spinoff from GMAC in 2009, Salt Lake City-based Ally has accumulated nearly a million customers. With $54 billion in total deposits, it’s currently the 29th largest U.S. bank.

Ally Bank’s noteworthy features include the following:

Ally customers can open an interest-bearing checking account that comes with free checks and a MasterCard debit card. It doesn’t require a minimum balance to open, nor does it charge a monthly or annual maintenance fee. However, like all other Ally accounts, you can’t make deposits in physical cash.

At the moment, Ally’s interest checking accounts pay a competitive interest rate: 0.10% for balances of less than $15,000 and 0.65% for balances above $15,000.

Like its interest checking account, Ally’s savings account lacks opening deposit and minimum balance requirements, as well as monthly maintenance fees. Federal regulations allow for up to six outbound transfers per 30-day statement period.

Currently, the high yield savings account yields 1.25%, although this figure may fluctuate on a daily, weekly, or monthly basis. You can make six free outbound transfers per month. Ally charges $10 apiece for any transfers that exceed this limit.

Ally offers three CD products. All come with 10-day best rate guarantees, meaning new accounts are automatically bumped up to higher yields if rates rise within 10 days of opening.

Ally’s CD Ladders are designed to mitigate one of the major drawbacks of long-term CDs: their tendency to tie up holders’ funds for years. Ladders consist of identically sized CDs whose terms range in length from one to five years. Upon maturity, each CD is automatically renewed at your maximum specified term, ensuring you have access to it on the same date every year. If you withdraw funds from a maturing CD, the other CDs in the ladder won’t be affected.

This product lacks monthly balance requirements, fees, and minimum deposits, and comes with a Visa debit card. Outbound transfers, including point-of-sale purchases with the debit card, are limited to six per statement period. However, there’s no limit on ATM withdrawals.

It currently yields 0.90%, far more than competitors such as Wells Fargo and U.S. Bank.

Ally’s IRA accounts allow you to invest in standard CDs, savings accounts, or Raise Your Rate CDs. These all follow the same rules and are available in the same term lengths as their non-IRA counterparts. You can open a Roth, traditional, or a SEP IRA if you’re a small business owner.

With a separate log-in area for auto loan customers, Ally has a whole suite of auto financing products for individuals and fleets that buy or lease. It also offers a Buyer’s Choice option that allows you to sell your vehicle to Ally after making 48 monthly payments. For specific information about rates and terms, visit a dealership and begin the pre-qualification process.

You Might Also Like: If you’re in the market for a different vehicle right now, check out our guide to choosing between a new or used car. And, if you’re a DIYer at heart, review our comprehensive primer on selling a car in a private party transaction.

Through Ally Financial, its parent company, Ally Bank offers commercial financing solutions for businesses with revenues of at least $50 million. These include term loans with fixed principal amounts which must be repaid within a specified timeframe.

Ally also offers revolving credit lines, which can be tapped or repaid within pre-set limits at your discretion. These products are designed to finance activities such as leveraged buyouts, mergers, and operational restructuring.

Check directly with Ally for more information about its commercial financing products.

Ally’s banking services are mobile-friendly. You can access all parts of your account, including balances, transfers, automatic bill-pay, and Ally’s ATM-finding tool, from your smartphone or tablet. You can also use the e-Check Deposit tool by taking a photo of the front and back of your endorsed check.

Ally’s P2P transfer feature lets you transfer funds between your checking or savings accounts and the U.S.-based bank accounts of your friends, family members, third-party vendors, and business associates. This mobile-friendly platform doesn’t require you to exchange bank account information, just email addresses or phone numbers.

Ally offers free downloads of Webroot SecureAnywhere AntiVirus software for all account holders. It also uses standard, federally compliant encryption and other security features in its online banking suite.

 

Ally Bank offers revocable and irrevocable living trusts, which can be efficient ways to preserve wealth or set aside gifts for others.

Revocable trusts can be altered or canceled by the grantors who set them up, with earnings and assets remaining under their control until death. They’re sometimes known as trust funds for this reason. Irrevocable trusts can only be changed by their beneficiaries.

Any Ally account can be opened as a trust, and the company’s employees can walk you through the process online or over the phone.

You can tie your checking account to an Ally savings or money market account and opt into the bank’s free Overdraft Checking Service.

In the event of an overdraft, Ally automatically transfers funds to your checking account in increments of $100. Each increment counts as one of six withdrawals that can be made from savings and money market accounts per statement period. Ally charges $10 per outbound transfer over that limit until the period’s end.

Ally reserves the right to decline the Overdraft Transfer Service and levy a $9-per-item fee if you overdraft repeatedly or are otherwise not in good standing with the bank.

Ally’s banking customer service team is available by phone 24/7. Wait times are posted on the website in real time. They’re usually minimal – the longest I’ve seen is eight minutes.

Ally’s auto service team is available 8am to 11pm Eastern on weekdays, with shorter hours on the weekend. Hours for other verticals, such as commercial financing, may vary.

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Ally Bank has nearly a million individual customers and is among the 30 largest banks in the U.S. by deposit size. It has several advantages over its peers, including generous yields on its savings vehicles, a lax fee and balance structure that favors smaller depositors, a robust auto lending department, and a responsive customer service team that’s always available. Its drawbacks may prevent it from being a one-stop shop for all your saving needs, but if you’re willing to have your mortgage and brokerage accounts elsewhere, Ally is a good option.

Do you have an account with Ally Bank?

Ally Bank is a full-service online bank that’s great for consumers seeking above-average yields on savings, money market, and CD accounts. It’s known for customer-friendly touches like the No Penalty CD and 24/7 phone support with shorter-than-average wait times. And, unlike many online banks, it has an auto lending arm, making it a one-stop spending and saving resource for millions of car buyers. On the other hand, Ally can’t help you if you’re looking to buy a house or build a diversified retirement portfolio.

Key benefits include 24/7 customer service with short wait times, ATM fee reimbursement, above-average deposit account yields, flexible Raise Your Rate CDs, comprehensive auto financing services, free overdraft payment, flexible transfers and billpay, and the 10-day best rate guarantee on CDs. Drawbacks include no mortgage or brokerage services, limited options for small business owners, no account opening bonuses, no framework for cash deposits, and limited overdraft protection.

Categories: Banking, Money Management, Reviews

Brian Martucci writes about frugal living, entrepreneurship, and innovative ideas. When he’s not interviewing small business owners or investigating time- and money-saving strategies for Money Crashers readers, he’s probably out exploring a new trail or sampling a novel cuisine. Find him on Twitter @Brian_Martucci.

Comments Disclosure: The below responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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