If you’re looking for excellent interest rates and a bank account with no minimum deposit, perhaps Ally Bank is the right bank for you. One of the United States’ most popular online banks, Ally offers customers a range of excellent services to help them to make the most of their money and this Ally Bank reviews will tell you how!
What Is Ally Bank?
Unusually for a banking service, Ally Bank has its roots in the automotive industry, originally formed as GMAC, an offshoot of General Motors, which offered customers finance in order to buy vehicles. Over time, GMAC grew and started to offer further banking services, eventually rebranding as Ally Bank in 2010.
Today Ally Bank has over 1 million happy customers, offering a complete online banking service which includes savings accounts, checking accounts, insurance and loans. There are no physical banks, meaning that the service is entirely conducted online, bringing banking one step further into the future.
How Does Ally Bank Work?
Ally Bank offers customers a range of excellent financial services, including savings accounts, money markets and CDs (a form of savings account where you pledge to keep your money locked in for a certain term). Ally Bank has great interest rates, far more competitive than most high street banks and lenders, and one of the best online services too. Checking accounts are available which also benefit from these interest rates, creating a checking account that actually pays you! Even better, there are no minimum account balances or maintenance fees included with any accounts.
Ally also offers mortgages and loans, investment services and help with savings, credit cards and personal financial advice, making this online banking service a one-stop shop for all financial needs. Ally is FDIC-insured, so your money is completely protected for up to $250,000 per depositor.
Although there are no physical banks, a 24-hour customer service line helps to deal with issues around the clock, 7 days a week, and you should always be able to get ahold of a customer service representative when you need to.
Signing up is easy. All you need to do is to head to the website (https://www.ally.com/) and use the online form to fill out your personal details, including financial information and your social security number. You’ll have to answer a few standard questions, but nothing different than you would be asked when signing up to any bank account. Once you’re ready to go you can pick and choose the financial services you would like to take advantage of, all from one screen. Pick as many as you’d like, and if you have any questions there is a dedicated team of customer service staff on hand to help you out.
Types of Ally Bank Accounts
1. Online Savings Account
A simple savings account with a bit extra, Ally’s Online Savings Account currently offers an APY of 2%, which is very good for an online bank, and far better than most physical banks. There is no minimum initial deposit and you aren’t tied into keeping a balance in order to keep your account open. You’ll be able to transfer money from another account into this one and benefit from the great interest rate, and then transfer it back to your account when you need it. You can also deposit eChecks quickly and simply using your mobile phone. There is no ATM card for this account, so if you’d prefer to have a card there are other options which may be better for you.
2. Money Market Account
The Money Market Account does include ATM card and works as a sort of hybrid of standard checking accounts and a savings account. This means that whilst you are able to access and withdraw your money instantly, it will still be earning interest whilst it is in your account. You can earn 0.90% on balances below $25,000 and 1% on any amount higher than $25,000. This account also benefits from no monthly or maintenance fees, although certain withdrawals are limited to six a month, including transfers to other accounts (according to federal laws). However you can use your debit card to withdraw as much cash as you need, meaning that you always have access to your money.
3. Interest Checking Account
This is a free checking account that earns interest at 0.10% on balances of less than $15,000 and 0.60% on balances greater and as with the previous accounts, there are no monthly maintenance fees. You’ll be able to withdraw cash with your ATM card at any Allpoint ATM for free (there are more than 43,000 countrywide). If you do have to pay fees from using other ATMs you’ll receive a rebate of up to $10 per statement cycle to refund you.
This account allows you to deposit checks quickly and simply with the Ally mobile app, and send cash to friends via the Zelle P2P service. Pay bills on demand or schedule recurring payments.
The Interest Checking Account is the perfect account for everyday spending. However, for better consumer protection, some customers prefer to use a credit card for their everyday purchases and then use their checking account to pay off the bill in full each month.
4. CD Accounts
There are different types of CDs to choose from, including:
● Raise your rate CDs – these CDs have variable rates so you don’t get stuck with a low rate for years. You can request a raise to your rate if and when Ally raises the rates for any product you own. With a two year CD you can do this once, and with a four year CD you can do it twice.
● High-Yield CDs – you are required to leave funds in the bank for a pre-agreed term with a high-yield CD in order to benefit from it, but in return these offer higher yields over time. Be mindful that if you do cash out early you may have to pay a penalty.
● No Penalty CDs – the only CD where you do not have to commit to leaving your cash in the CD for the full term. You can cash out any time after you have deposited cash, with a minimum wait of 6 days. You earn 1.75% if you deposit less than $5000, 2.05% between $5000 and $25000, and 2.20% for more than $25000.
5. IRA and Trust Accounts
Ally Bank offers Traditional, Roth and SEP IRAs, and you can use High Yield or Raise Your Rate CDs in conjunction with these to help boost your retirement fund that much more. Trust options are available and the dedicated customer service team can help you to decide which options suit your requirements and finances best.
6. Investment Options
There are two main investment options for Ally customers. Self-directed trading accounts offer investors the opportunity to take full control over their own investments, making their own decisions and choosing their own stocks, bonds, ETFs and mutual funds. This option is ideal for those who are comfortable with investing and already have some experience. For those who have an interest in investing but are less confident, there is also Ally Invest. This is an automated investing platform for hands-off investors. Investment accounts are not FDIC insured so be aware that the risks you take investing with Ally Bank are the same that you would take elsewhere, investing on your own.
7. Loan Options
Ally Bank offers several types of loans including credit card loans, auto loans and home loans, both for purchases and refinancing. A customer service representative should be able to talk you through the process and help you to decide what loans are suitable for you.
Pros and Cons of Ally Bank
- 24/7 customer service. You can get help from customer service representatives both online and over the phone.
- No account minimums or maintenance fees.
- Interest paying checking accounts help your own money to work for you, paying you simply for keeping your money in your account.
- One stop shop for all financial needs.
- eCheck Deposit and over the phone makes depositing money simple.
- User friendly web interface.
- Checking fees. In the past, refunds on fees for ATM transactions used to be unlimited but now you can only claim $10 back per month.
- No physical locations can make some customers feel uncomfortable.
- No cash deposits.
- No ATM card for savings accounts, making it a little more difficult to take money out when you need it.
As the world moves further into the digital age, it seems inevitable that banking will eventually become entirely online, with physical banks seeming dated even now. Ally is a great way to get started with an entirely online banking experience, as the benefits outweigh the risks and you get to enjoy excellent interest rates just for depositing cash. With around-the-clock advice and support from a dedicated financial team, and an entire range of financial services available, there is certainly no harm in giving this bank a try. You might even find that you decide to switch all of your accounts over soon enough!