The banking landscape continues to change, and increasingly, consumers are ditching brick-and-mortar banks for more flexible options. Online banks often come with fewer fees, better customer service, and higher APYs. There is no better example of this than Ally Bank.
Ally Bank is one of the most popular mobile banking options. The online bank offers competitive interest rates and various helpful features and services. This review will give an overview of the bank, so you can decide if it’s the right choice for you.
What is Ally Bank, and how does it work?
Ally Financial was originally founded as GMAC Bank, then rebranded in 2009 as Ally, an online bank. Ally is popular with consumers thanks to its friendly customer service and a wide variety of hassle-free banking options.
Ally Bank offers the following banking products:
- Interest checking accounts
- Online savings accounts
- Money market accounts
- Certificates of deposit (CDs)
- Credit cards
- Home and auto loans
Of course, there is no perfect banking option. But if you’re looking for a convenient, one-stop shop for all your online banking needs, Ally Bank is an excellent choice for you to consider.
Ally Bank’s Key Features and Services
Listed below is a more in-depth look at the main banking features Ally Bank offers, as well as some of the pros and cons of each.
Ally Interest Checking Account
The average national rate for an interest checking account is 0.10%. In comparison, Ally Bank offers an APY of 0.25% on accounts with balances of $15,000 or more.
If your checking account daily balance is less than $15,000, you’ll earn a 0.10% APY, which is still higher than most banks.
Unlike many brick-and-mortar banks, Ally doesn’t charge any monthly maintenance fees. They also don’t charge fees for bank statements, ACH, or wire transfers.
The bank does charge overdraft fees, but they are only $25. And you won’t be hit with more than one overdraft fee per day.
Ally Bank doesn’t have any branches you can visit, so you just snap a photo and deposit checks right from your phone. And if you need to withdraw cash, you can access any Allpoint ATM for free.
Ally Bank Savings Accounts
You’ll get an APY of 0.50% with an Ally Bank Online Savings account, which beats the national average of 0.09%. You’ll earn this rate regardless of how much money you have in your account and there are no minimum balance requirements.
The online savings account does not come with a debit card, but you can easily make transfers from other Ally accounts. You can also utilize mobile deposits or wire transfer the money, but you cannot deposit cash.
The bank doesn’t charge a monthly fee on its savings account, and the account fees it does charge are limited. You can check out the bank’s website to learn more about the kinds of fees you can expect as an Ally customer.
Ally Money Market Account
Ally’s money market account is like a savings and checking account all rolled into one. You earn an APY of 0.50%, but you’re able to spend the money right away. There is no minimum deposit requirement.
When you open a money market account, you’ll receive free checks and a debit card for easy spending. And you’ll receive free access to Allpoint ATMs.
However, due to federal regulations, payments and mobile transfers are limited to six per month. But you can make as many cash withdrawals as you want.
Here are the three different certificate of deposit accounts Ally Bank offers:
- High Yield CD: This CD comes with a 0.55% APY and is available in various term lengths, ranging from three months up to five years. You will be charged a penalty if you withdraw the money before your term is up.
- Raise Your Rate CD: This CD has a 0.55% APY and is available for two-year or four-year term lengths. And you have the option to increase your rate once over the two-year term and twice over the four-year term. Early withdrawal penalties will apply to Raise Your Rate CDs.
- No Penalty CD: This CD is a good option for consumers who think they may need to withdraw their money early. The term length is 11 months, and the APY varies depending on the size of your deposit.
Does Ally Bank charge any fees?
Yes, but the fees are limited. And all of Ally’s most commonly used financial services don’t come with any fees. For instance, there are no monthly maintenance fees, incoming wire transfer fees, ACH transfers, online statements, or cashier’s checks.
Here is an overview of the fees the bank does charge, per Ally’s website:
- Returned deposit: $7.50
- Overdraft fee: $25, limited to once per day
- Excessive transactions: $10 per transaction
- Expedited delivery: $15
- Outgoing wire transfer fees: $20
- Account research fee: $25 per hour
Pros and Cons of Ally Bank
- There are no minimum deposit requirements
- Competitive APYs
- There are no monthly fees
- The fees are pretty low
- 24/7 customer support
- Easy-to-use online interface
- Free ATM access
- No local branches
- The money market pays less than the savings account
- Savings accounts don’t come with an ATM card
- There are transaction limits on money market and savings accounts
Who is Ally Bank best for?
If you’re looking for convenient, mobile banking options, Ally is tough to beat. It’s a one-stop shop for most of your banking needs.
Ally Bank customers will earn a competitive interest rate on savings and CDs. And you never have to worry about maintaining a monthly minimum balance on any Ally Bank account.
A bank account from Ally is a great option for anyone who feels annoyed by monthly fees and is looking for a straightforward, hassle-free approach to banking.
That being said, Ally Bank isn’t going to be the right option for everyone. If you would like to have the option to visit a branch location that accepts cash deposits, then Ally will not be the right choice for you.
And the money market rates are lower than what you could get by opening a savings account. So if you’re looking for a money market account, you’ll be able to find better rates with Marcus by Goldman Sachs, Discover Bank, or Barclays.
Ally Bank could be a good choice for a checking account, online savings account, or CD depending on your banking needs. However, you won’t find the best money market rates, so you can probably find better options elsewhere.
But Ally Bank is top-notch in terms of flexibility and customer support. Ally Bank offers 24/7 customer service, so there is always someone available to help you get the information you need.