January 3, 2017

Ally Bank Review: Worth Opening Account?

Read more about Ally Bank
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Ally Bank is often named the best online savings account. You get high interest and there's no account minimum. Read on to see if it's what you need.

These days, interest is a joke.

With traditional banks paying an average interest rate of only 0.06%, we’re lucky if we can even find something that offers 1%.

Luckily, web-based banks are trying to provide a better solution. They’re often able to offer a higher interest rate. Over the last several years, Ally Bank has stood out as an online bank with a firm reputation.

Ally Bank has a long history; it was previously known as GMAC (the finance sector for General Motors). In 2010, it was rebranded as Ally Bank, an online bank built on a principle of providing better rates and service to customers.

So does Ally Bank deliver? Particularly in the area of savings accounts?

Read on for a detailed review.

Services Offered

Ally Bank offers a nice range of banking services that satisfy basic checking and savings needs:

    Online Savings Account

    1.45% APY on all balance tiers. $0 minimum opening deposit. No fees to open or maintain account. No minimum daily balance requirement.
    • Consistently Competitive Rates
    • 24/7 Customer Care
    • Ally Bank, Member FDIC

    Interest Checking

    • 0.10% APY for daily balances less than $15,000
    • 0.60% APY for daily balance over $15,000
    • Be reimbursed $10/month for ATMs outside of Ally Network
    • $0 Minimum Opening Deposit
    • No Fees to Open or Maintain Account
    • FDIC insured
    • Daily Compounding Interest

    Money Market

    • 0.90% APY for daily balances up to $25,000
    • 1.00% APY for daily balance over $25,000
    • Unlimited deposits and ATM withdrawals, and up to 6 additional transaction
    • Be reimbursed $10/month for ATMs outside of Ally Network
    • $0 Minimum Opening Deposit
    • No Fees to Open or Maintain Account
    • FDIC insured
    • Daily Compounding Interest

    Term CDs

    • Up to 2.50% APY
    • $0 Minimum Opening Deposit
    • Up to 5 years
    • No monthly maintenance fee
    • FDIC insured
    • Daily Compounding Interest

    Raise Your Rate CDs

    • 2.00% APY
    • 2 or 4-Year Terms
    • Opportunity to increase your rate once over the 2-year term or twice over the 4-year term
    • $0 Minimum Opening Deposit
    • No monthly maintenance fee
    • FDIC insured
    • Daily Compounding Interest

    No Penalty CD

    • Withdraw Full Balance and Interest After 6 Days of CD Funding Date Without Penalty
    • $0 Minimum Opening Deposit
    • Up to 1.50% APY
    • 11 Months
    • No monthly maintenance fee
    • FDIC insured
    • Daily Compounding Interest

Related: Ally Invest

8 Reasons to Save with Ally Bank

This review is mainly for Ally’s online savings account. As far as savings accounts go in the industry, it’s a solid pick. Here are 8 good reasons we like Ally:

    Ally Bank

    Online Savings Account

    1.45% APY on all balance tiers. $0 minimum opening deposit. No fees to open or maintain account. No minimum daily balance requirement.
    • Consistently Competitive Rates
    • 24/7 Customer Care
    • Ally Bank, Member FDIC

  1. Savings account with high interest. Ally Bank offers a very competitive APY for their savings account. While this number may still seem laughably low, sadly, it is quite respectable by today’s standards.

  2. FDIC insured. Security is an extremely important factor when you’re talking about storing your hard-earned money. Ally Bank is FDIC insured. This means that if the bank defaults, the government will pay you every cent you had in the account (up to the FDIC maximum of $250,000).

  3. No minimum deposit and no maintenance fee. Many other savings accounts require a minimum deposit to open an account. And then you have to maintain a certain amount or you’ll be charged a monthly fee. But Ally Bank has no such requirements.

    This means you can open an account with as little as you want and start earning interest right away. If you open an account with no deposit, you must fund it within 30 days of account opening.

  4. User friendly web interface. Ally consistently gets high user ratings for its easy-to-use website. They are completely transparent on their rates, so you won’t be blindsided.

  5. Deposit checks by phone. Got a check deposit? It’s easy to move it straight into your Ally savings account. Just take a picture on your phone and send it through the mobile app.

  6. 24/7 customer service support by phone and live chat. Completely web-based banking may make some people nervous because you lose the personal touch. But rest assured that Ally has a real human person who can help you at any time of the day.

  7. Unlimited number of accounts. You can open as many savings accounts as you want. This is great if you are saving for multiple goals. For example, you can have one account as the emergency fund, one for a future vacation, one for a car down payment, etc.

  8. You can link up to 20 external accounts. This comes in handy if you have a lot of other accounts that you want to transfer money to/from.

3 Reasons to Look Elsewhere

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

  1. You want a one-stop shop for all your banking needs. Ally is great if you’re just looking for checking and savings. But if you want something that’s more of an all-in-one financial services center, you may want to consider other banks.

    Did you know: Ally acquired TradeKing in 2016 and recently launched Ally Invest? Ally Invest offers a range of investment products with some of the lowest fees.

  2. No ATM card for savings account. This may be a downside for some. The savings account doesn’t come with an ATM card, so you can’t make quick withdrawals at ATM machines. Instead, if you need some funds, you’d have to do an online transfer (or by wire, telephone, or check), which may take a few days.

    Keep in mind: In accordance with federal law, you can only make 6 withdrawals a month. If you exceed that, you’ll be charged a fee of $10 per transfer.

  3. Checking Fees: If you want to use Ally for checking as well, the fees do seem to be rising lately. It used to be that Ally offered unlimited ATM reimbursement (for the checking account), but now it’s $10 a month. The overdraft fee is $25.

How It Compares

Picking a place to park your money deserves some thought. It’s smart to compare to a couple of other options. Let’s take a look at how Ally measures up to other online savings accounts.

If you want a savings account with an ATM card:

    Synchrony Bank

    High Yield Savings

    1.55% APY. $0 minimum opening deposit. No minimum balance requirement. No fees to open or maintain account.
    • Great Rates + Safety = Peace of Mind
    • Member FDIC

Synchrony (which used to be part of General Electric) also doesn't require a minimum deposit or a minimum balance. And there's no monthly service fee either.

The biggest plus is that Synchrony comes with an ATM card. So you can withdraw savings quickly (up to 6 per statement cycle) instead of having to wait a few days for the transfer to be completed.

However, a downside is that they don’t have a real human available 24/7. So if you need help in the middle of the night or on a Sunday, you may be out of luck.

If you have $5,000 to save:

The Popular Direct Savings Account offers one of the highest interest rates. However, the minimum deposit is a whopping $5,000. And you must maintain a $500 balance in the account or else you'll be charged a monthly fee. If you close the account within 180 days, there's an early closing fee of $25.

This option is better for those who have more to save and don’t need to move money around too often.

You might also consider:

    CIT Bank

    Premier High Yield Savings Account

    • 1.55% APY
    • $100 Minimum Opening Deposit
    • No Fees to Open or Maintain Account
    • Daily Compounding Interest
    • No Minimum Daily Balance Requirement
    • FDIC Insured
    Barclays

    Online Savings Account

    1.50% APY. No monthly maintenance fees. No minimum balances to open.

    Citizens Bank

    GoalTrack Savings Program – up to $250 in Gift Cards

    Add the GoalTrack Savings programs to any eligible Citizens Bank savings account and be rewarded for reaching your goals. Select a target timeframe and monthly savings goal amount. If you achieve your goal, you will receive a gift card. The amount varies based on your monthly savings and the timeframe. To get the minimum bonus, you must save at least $25/month for 8 months (above your existing balance). The most you can receive is a $250 gift card if you save $400/month for 36 months (above your existing balance). Only available to residents of CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT.

Bottom Line

Ally Bank is one of the most reputable online banks in the industry. Its savings account is great for anyone, whether you’re just thinking about saving or need a better place to store your money. It has no minimum deposit, no account minimum, and no maintenance fees. So anyone can set up an account and start saving.

The interest is pretty solid for today’s standards. And you may feel at ease knowing you can reach a real person at any hour of any day. There’s no real downside to opening an Ally account, since there are no fees.

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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