SoFi vs. Ally: Which Is Better?

Banking

When it comes to online banking, SoFi and Ally are two names that frequently come up. Both institutions have made significant strides in the financial industry, offering a wide range of services that cater to the needs of modern consumers.

SoFi started with a focus on student loan refinancing but has since expanded its offerings to include banking, investing, and personal loans. Ally has transformed from an auto financing company to a comprehensive online bank with a strong emphasis on customer service and competitive interest rates.

woman comparing accounts

Choosing the right financial institution is an important decision that can impact your financial health and goals. With so many options available, it’s essential to find a bank that aligns with your specific needs, whether you’re looking for high-interest savings accounts, low fees, or excellent customer service. This article aims to provide a detailed comparison of SoFi and Ally, evaluating them on various factors to help you make an informed decision.

Company Backgrounds

SoFi

SoFi, short for Social Finance, was founded in 2011 by a group of Stanford Business School students. Initially, SoFi aimed to provide more affordable options for student loan refinancing, helping graduates manage their debt with lower interest rates. Over the years, SoFi’s mission has expanded to include helping people achieve financial independence and realize their goals through a variety of financial products and services.

Overview of Services Offered

SoFi offers a broad range of financial services designed to meet the needs of its diverse customer base:

  • Banking: SoFi provides checking and savings accounts with competitive interest rates, no account fees, and a suite of digital tools to manage your finances.
  • Loans: In addition to student loan refinancing, SoFi offers personal loans, home loans, and even parent loans to help families cover educational expenses.
  • Investments: SoFi Invest allows customers to trade stocks and ETFs with no commission fees, invest in cryptocurrency, and use automated investing tools to grow their portfolios.

Ally

Ally Financial, originally known as GMAC (General Motors Acceptance Corporation), was established in 1919 to provide financing to automotive customers. In 2009, GMAC rebranded as Ally and shifted its focus to online banking and financial services. Ally’s mission is to be a relentless ally for your financial well-being, offering straightforward, customer-focused financial products and services.

Overview of Services Offered

Ally provides a comprehensive suite of financial services to cater to a wide range of needs:

  • Banking: Ally’s banking services include checking and savings accounts, money market accounts, and certificates of deposit (CDs), all with competitive interest rates and no monthly maintenance fees.
  • Auto loans: Continuing its legacy in auto financing, Ally offers a variety of auto loan options, including new and used car loans, lease buyouts, and refinancing.
  • Investments: Through Ally Invest, customers can engage in self-directed trading with stocks, options, and ETFs, or opt for managed portfolios to help grow their investments.

Account Types and Features

Checking Accounts

Interest Rates and Fees

  • SoFi: SoFi offers a checking account with an APY of up to 0.50% for customers who meet certain criteria, such as setting up direct deposit or depositing at least $5,000 monthly. There are no monthly maintenance fees or overdraft fees, and customers have access to over 55,000 fee-free ATMs.
  • Ally: Ally’s Interest Checking account provides an APY of 0.25% for balances below $15,000 and 0.50% for balances of $15,000 or more. Ally also charges no monthly maintenance fees and offers reimbursement for up to $10 per statement cycle for out-of-network ATM fees.

Minimum Balance Requirements

  • SoFi: There are no minimum balance requirements for SoFi checking accounts, making it accessible for all customers regardless of their account balance.
  • Ally: Ally also does not impose any minimum balance requirements, allowing customers to open and maintain accounts without worrying about maintaining a specific balance.

Special Features

  • SoFi: Special features include up to 15% cash back on eligible debit card purchases, fee-free overdraft protection up to $50, and early direct deposit.
  • Ally: Ally provides features such as a mobile app with extensive functionalities, access to over 43,000 fee-free ATMs, and a round-up program that helps customers save by rounding up debit card purchases to the nearest dollar and transferring the difference to savings.

Savings Accounts

Interest Rates and APY

  • SoFi: SoFi offers a savings account with an APY of up to 4.60% for customers who receive direct deposits or have $5,000 or more in qualifying deposits each month. This rate is significantly higher than the national average for savings accounts.
  • Ally: Ally’s Online Savings Account offers an APY of 3.85%, which is also competitive and above the national average.

Minimum Balance Requirements

  • SoFi: There are no minimum balance requirements for SoFi savings accounts, making it easy for anyone to start saving.
  • Ally: Ally does not require a minimum balance for its savings accounts, offering flexibility to customers regardless of their balance.

Automatic Savings Tools and Other Features

  • SoFi: SoFi provides automated savings tools such as Vaults, which allow users to set aside money for specific goals, and Roundups, which automatically round up debit card purchases to the nearest dollar and transfer the difference to savings.
  • Ally: Ally offers features like Buckets, which help users organize their savings for different goals, and Surprise Savings, which analyzes spending and automatically transfers extra money to savings.

Certificates of Deposit (CDs)

Interest Rates and Terms

  • SoFi: SoFi’s CD offerings include competitive interest rates with a range of term lengths. Specific rates and terms may vary.
  • Ally: Ally offers a range of CDs with attractive interest rates. For instance, their High Yield CDs offer rates up to 4.85% APY, while their Raise Your Rate CDs and No Penalty CDs provide flexible options for savers.

Early Withdrawal Penalties

  • SoFi: SoFi’s CDs have standard early withdrawal penalties, which vary depending on the term length of the CD.
  • Ally: Ally’s No Penalty CD option allows customers to withdraw their funds without penalty before maturity, providing flexibility for those who may need access to their funds sooner.

Other Accounts

Money Market Accounts

  • SoFi: Currently, SoFi does not offer money market accounts.
  • Ally: Ally offers a money market account with an APY of 4.25%, no monthly maintenance fees, and check-writing privileges, combining the benefits of both savings and checking accounts.

Investment Accounts

  • SoFi: SoFi provides a variety of investment options, including IRAs and brokerage accounts. SoFi Invest allows for commission-free trading of stocks and ETFs, as well as access to automated investing services.
  • Ally: Ally Invest offers self-directed trading accounts with no commission fees on eligible U.S. securities, as well as managed portfolios and IRA options, making it a comprehensive platform for investors.

Digital Banking Experience

Mobile App

User Interface and Ease of Use

  • SoFi: The SoFi mobile app has a sleek, modern design that is intuitive and easy to navigate. Users can quickly access their accounts, view transactions, and manage their finances with just a few taps. The app is designed to provide a seamless experience, making it simple for users to handle their banking needs on the go.
  • Ally: Ally’s mobile app is also highly regarded for its user-friendly interface. The app’s design is straightforward, allowing users to navigate easily between different sections. Essential features are prominently displayed, ensuring that users can efficiently manage their accounts and perform transactions.

Features

  • SoFi: The SoFi app offers a range of features, including mobile check deposit, bill pay, peer-to-peer payments, and automated savings tools like Vaults and Roundups. Users can also track their spending, set financial goals, and access personalized financial advice.
  • Ally: Ally’s app includes mobile check deposit, bill pay, money transfers, and Zelle integration for quick payments. The app also provides tools for budgeting and savings, including Buckets for goal-oriented savings and Surprise Savings for automatic transfers based on spending habits.

Customer Reviews and Ratings

  • SoFi: The SoFi app has received high ratings on both the App Store and Google Play, with users praising its ease of use, functionality, and comprehensive features. It has a rating of 4.8 stars from over 250,000 reviews.
  • Ally: Ally’s app also enjoys high ratings, with users appreciating its reliability and user-friendly design. The app typically scores around 4.7 stars on the App Store and 4.6 stars on Google Play.

Online Banking

Website Usability and Features

  • SoFi: The SoFi website is designed to be clean and easy to navigate. Users can access all of SoFi’s services, including banking, investing, and loans, from a single dashboard. The site offers detailed financial tools and resources to help users make informed decisions.
  • Ally: Ally’s website is equally user-friendly, with a straightforward layout that allows users to manage their accounts, apply for loans, and invest with ease. The site includes various financial calculators and educational resources to assist users in managing their finances effectively.

Integration with Other Financial Tools

  • SoFi: SoFi integrates with several financial tools, including budgeting apps like Mint and YNAB. This allows users to sync their SoFi accounts with these tools for a more comprehensive view of their finances.
  • Ally: Ally also supports integration with various financial management tools and apps. Users can link their Ally accounts with services like Mint, Quicken, and other budgeting software to track spending and manage their money.

Customer Service

Accessibility

Availability of Customer Service

  • SoFi: SoFi offers customer service via phone, email, and live chat. Customer service representatives are available to assist with banking, loan inquiries, and other financial services.
  • Ally: Ally provides customer service through phone, email, and chat as well. Their representatives are available 24/7 for banking support, ensuring that customers can get help at any time.

Hours of Operation

  • SoFi: Customer service hours for SoFi are typically from 5 AM to 7 PM PT on weekdays and 5 AM to 5 PM PT on weekends for phone support. Live chat support is available during similar hours.
  • Ally: Ally offers 24/7 customer service for its banking products, which means customers can reach a representative at any time of day or night.

Quality of Service

Response Time and Helpfulness

  • SoFi: SoFi is known for its responsive and helpful customer service. Customers generally report positive experiences, noting that representatives are knowledgeable and quick to resolve issues.
  • Ally: Ally’s customer service is also highly rated for its responsiveness and quality. Customers appreciate the prompt and effective support they receive, with many noting the professionalism and courtesy of the representatives.

Customer Reviews and Ratings

  • SoFi: SoFi receives strong reviews for its customer service, with many users highlighting the ease of getting help and the effectiveness of the support provided.
  • Ally: Ally’s customer service ratings are similarly positive, with users frequently mentioning the high level of satisfaction with the support they receive, especially the 24/7 availability.

Fees and Charges

Monthly Fees

Comparison of Maintenance Fees

  • SoFi: SoFi does not charge any monthly maintenance fees for its checking or savings accounts. This fee-free structure is designed to make banking accessible and affordable for all customers.
  • Ally: Ally also does not charge monthly maintenance fees for its checking or savings accounts. Like SoFi, Ally aims to provide a cost-effective banking solution with no hidden fees.

Conditions for Fee Waivers

  • SoFi: Since SoFi does not have monthly maintenance fees, there are no conditions required for fee waivers.
  • Ally: Ally does not have monthly maintenance fees, so no conditions need to be met to avoid such fees.

Transaction Fees

ATM Fees

  • SoFi: SoFi provides access to over 55,000 fee-free ATMs through the Allpoint network. If you use an out-of-network ATM, SoFi does not charge a fee, but the ATM operator may impose a fee.
  • Ally: Ally offers fee-free access to over 43,000 Allpoint ATMs. Additionally, Ally reimburses up to $10 per statement cycle for fees charged by other ATM operators.

Overdraft Fees

  • SoFi: SoFi offers fee-free overdraft protection for overdrafts up to $50, provided you have a qualifying direct deposit. For overdrafts above this amount, the transaction may be declined.
  • Ally: Ally does not charge overdraft fees. Instead, they offer an overdraft transfer service, which automatically transfers funds from a linked Ally savings or money market account to cover overdrafts. There is no fee for this service.

Foreign Transaction Fees

  • SoFi: SoFi does not charge foreign transaction fees on purchases made abroad with its debit card, making it a suitable option for frequent travelers.
  • Ally: Ally also does not charge foreign transaction fees on its debit card, allowing customers to use their card internationally without incurring extra costs.

Additional Services

Loans and Credit

Personal Loans

  • SoFi: SoFi offers personal loans with competitive interest rates, no origination fees, and flexible repayment terms. These loans can be used for various purposes, including debt consolidation, home improvements, and major purchases. SoFi’s personal loans range from $5,000 to $100,000 with APRs starting around 5.99%, depending on creditworthiness and other factors.
  • Ally: Ally provides personal loans through its partnership with LendingClub. The terms and rates vary based on the borrower’s credit profile and loan amount. This partnership allows Ally to offer a broader range of loan products without directly managing them.

Home Loans

  • SoFi: SoFi offers mortgage refinancing, home purchase loans, and home equity loans. SoFi’s home loans are known for their competitive rates, easy online application process, and the ability to pre-qualify without affecting your credit score.
  • Ally: Ally Home offers mortgage loans with competitive rates, a streamlined online application process, and various loan options, including fixed-rate, adjustable-rate, and jumbo loans. Ally also provides a Price Match Guarantee, ensuring you get the best possible rate.

Auto Loans

  • SoFi: SoFi does not currently offer direct auto loans, but customers can use personal loans for vehicle purchases.
  • Ally: Ally has a long history in auto financing and offers a range of auto loan products, including new and used car loans, lease buyouts, and refinancing options. Ally provides competitive rates and flexible terms, making it a strong choice for auto financing.

Credit Cards

  • SoFi: SoFi offers a credit card that rewards users with 2% cash back on all eligible purchases when redeemed into SoFi products, such as a SoFi Money account, SoFi Invest account, or used to pay down a SoFi loan.
  • Ally: Ally provides credit cards through its partnership with TD Bank, offering cash back rewards and various benefits tailored to different spending habits and financial goals.

Investments

Robo-Advisors

  • SoFi: SoFi Invest includes automated investing (robo-advisor) services, where users can set up a diversified portfolio based on their risk tolerance and financial goals. The robo-advisor automatically manages and rebalances the portfolio.
  • Ally: Ally Invest Managed Portfolios offer robo-advisor services with multiple investment options and low management fees. Customers can choose portfolios based on their risk tolerance and investment preferences.

Self-Directed Trading

  • SoFi: SoFi Invest allows for commission-free trading of stocks, ETFs, and cryptocurrencies. Users can also participate in IPO investing and fractional shares.
  • Ally: Ally Invest provides a comprehensive self-directed trading platform with no commission fees on eligible U.S. stocks, ETFs, and options. The platform offers advanced trading tools and research resources for more experienced investors.

Managed Portfolios

  • SoFi: SoFi offers managed portfolios through its automated investing service, which includes personalized portfolio recommendations and automatic rebalancing.
  • Ally: Ally Invest Managed Portfolios are tailored to individual risk profiles and financial goals, with features like automatic rebalancing and a low annual advisory fee.

Insurance and Other Services

Insurance Products (Home, Auto, Life)

  • SoFi: SoFi partners with various insurance providers to offer home, auto, and life insurance. Customers can easily get quotes and purchase policies through SoFi’s platform, often at discounted rates.
  • Ally: Ally offers auto insurance through its Ally Premier Protection program, which includes coverage for mechanical repairs and other auto-related services. Additionally, Ally partners with third-party providers to offer home and life insurance.

Other Financial Services

  • SoFi: In addition to banking and lending, SoFi provides a range of other financial services, including financial planning, student loan refinancing, and career coaching. SoFi members also have access to exclusive events and resources to help them achieve their financial goals.
  • Ally: Ally offers financial planning services, investment management, and retirement planning through its Ally Invest platform. Additionally, Ally provides educational resources and tools to help customers make informed financial decisions.

Pros and Cons

SoFi

Advantages

  • No fees: SoFi stands out for its no-fee structure. There are no monthly maintenance fees, overdraft fees, or ATM fees within the Allpoint network. This makes it an attractive option for customers looking to minimize banking costs.
  • High APY: SoFi offers a highly competitive APY on its savings accounts, up to 4.60% for those who meet the criteria (direct deposit or $5,000 in monthly deposits). This rate is significantly higher than many traditional banks.
  • Comprehensive services: SoFi provides a wide range of financial services, including banking, loans, investing, and insurance. This all-in-one approach can be convenient for users looking to manage multiple financial needs through one institution.
  • Member benefits: SoFi members enjoy various perks, such as access to financial advisors, career coaching, and exclusive events. These benefits can provide additional value beyond basic banking services.

Disadvantages

  • Limited branch access: SoFi is an online-only bank, which means there are no physical branches for in-person service. This might be a drawback for customers who prefer face-to-face interactions for certain banking needs.
  • Cash deposit fees: While SoFi offers many fee-free services, there is a $4.95 fee for depositing cash at participating retail locations. This could be a disadvantage for customers who frequently need to deposit cash.

Ally

Advantages

  • Competitive rates: Ally offers competitive interest rates on its savings accounts (3.85% APY) and CDs, making it a strong option for savers. The bank also offers interest on checking accounts, which is relatively rare.
  • Wide range of products: Ally provides a comprehensive suite of financial products, including banking, auto loans, home loans, and investments. This diversity allows customers to meet various financial needs in one place.
  • 24/7 customer service: Ally offers customer support 24/7 via phone, which is a significant advantage for those who need assistance outside of typical banking hours.
  • No overdraft fees: Ally’s overdraft protection services are fee-free, which can save customers money and provide peace of mind.

Disadvantages

  • Limited physical presence: Like SoFi, Ally is an online-only bank with no physical branches. Customers who prefer in-person banking services may find this limiting.
  • ATM fee reimbursement cap: Ally reimburses up to $10 per statement cycle for out-of-network ATM fees. While this is helpful, heavy ATM users might find this cap restrictive.

Conclusion

In this comparison, both SoFi and Ally demonstrate strong offerings in the realm of online banking. SoFi excels with its no-fee structure and high APY for savings accounts, making it ideal for users seeking low-cost banking with high returns on savings. Additionally, SoFi’s wide range of financial services and member benefits add significant value.

Ally also stands out with competitive rates on savings accounts and CDs, a broad array of financial products, and 24/7 customer service. Ally’s fee-free overdraft protection and interest-bearing checking accounts are notable advantages, though its cap on ATM fee reimbursements and lack of physical branches may be considerations for some users.

Recommendations

  • Best for Tech-Savvy Users: SoFi is an excellent choice for tech-savvy individuals who are comfortable with online banking and want to benefit from high APY savings and a no-fee structure. The additional financial services and member benefits are a plus for those seeking a comprehensive financial solution.
  • Best for High APY Seekers: SoFi’s high APY on savings accounts makes it a top contender for those prioritizing earning potential on their savings.
  • Best for Comprehensive Banking Needs: Ally is suitable for customers looking for a full range of banking and investment products. The 24/7 customer service and competitive rates across multiple products provide a strong value proposition.

Final Thoughts

When deciding between SoFi and Ally, it’s essential to assess your own needs and preferences. Consider factors like the importance of high APY, fee structures, customer service availability, and the range of financial products offered. Both SoFi and Ally provide excellent online banking experiences, but the best choice will depend on what aligns most closely with your financial goals and lifestyle.

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