Ally Invest Review: Pros and Cons
Ally Invest (formerly TradeKing) offers one of the lowest trade fees, but is it good? Learn the pros and cons and see comparisons with other online brokers in this in-depth review.
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Overall Score | 4.4 | ||
Stock Trading | 5.0 | ||
Options Trading | 5.0 | ||
Banking | 5.0 | ||
Mobile App | 3.5 | ||
Commissions and Fees | 5.0 | ||
Ease of Use | 4.0 | ||
Online Community | 5.0 | ||
Research | 3.5 | ||
Trading Platform | 4.0 | ||
Pros and Cons
- Low commission for stock trades
- No account minimums
- Ally LIVE platform
- No physical locations
Bottom Line
Good low-price discount stock broker for savvy investors
CreditDonkey has done a comparison of the top online brokerages, and now we're taking a more in-depth look at Ally Invest for investors who want to switch their brokerage or are looking to get started. With Ally Invest's low trading costs, you can keep a few more bucks in your pocket than with bigger name brokers.
Is Ally Invest Cheap and Good?
If you're looking to open a basic online brokerage account, Ally Invest might be the perfect fit.
Though not as well-known as its competitors, E*Trade, Fidelity, and TD Ameritrade, Ally Invest's user interface can certainly hold its own against the more popular brokerages. And it consistently ranks near the top of the customer satisfaction ratings.
And best of all, the fees charged by Ally Invest are among the lowest of any online brokerage around.
But how does this budget broker stand up against its more expensive counterparts?
Read on to see if it's right for you.
In this review, you'll find:
Who Ally Invest Works Best For
Ally Invest could be right for you if you are:
- Looking for a simple online brokerage account and have a basic understanding of markets and security types.
- An active trader or a high-volume trader who can take advantage of the lower commission fees.
- An advanced trader who wishes to trade Forex or futures.
If any of the above sound like you, this platform is a great, low-cost alternative to some of the more popular and widely advertised brokerages like E-Trade and TD Ameritrade.
Ally Invest may not be right for you if you are: A beginner investor looking for more hand-holding and guidance in making your investment decisions. In these cases, you are probably better off with a different brokerage account provider.
We'll explain more below. But first, let's highlight the current Ally Invest promotions.
Ally Invest Promotional Codes 2018
Get Up to $3,500 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only. Account must be funded for at least 60 days to be eligible for cash bonus. Terms apply.
Get $50 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only with $10,000 minimum opening deposit. Account must be funded for at least 60 days to be eligible for cash bonus.
Get $200 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only with $25,000 minimum opening deposit. Account must be funded for at least 60 days to be eligible for cash bonus.
Get $300 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only with $100,000 minimum opening deposit. Account must be funded for at least 60 days to be eligible for cash bonus.
Get $600 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only with $250,000 minimum opening deposit. Account must be funded for at least 60 days to be eligible for cash bonus.
Get $1,200 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only with $500,000 minimum opening deposit. Account must be funded for at least 60 days to be eligible for cash bonus.
Get $2,500 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only with $1,000,000 minimum opening deposit. Account must be funded for at least 60 days to be eligible for cash bonus.
Get $3,500 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only with $2,000,000 minimum opening deposit. Account must be funded for at least 60 days to be eligible for cash bonus.
Open an Ally Invest account
Open an Ally Invest IRA today. No IRA fees
OPENING AN ACCOUNT
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You can get started two ways:
- A self-directed account. If you're comfortable trading, you can handle your own investments. There are no account minimums to open a self-direct account. And there are no maintenance or inactivity fees.
If you have a margin account (which is governed by federal regulation), you must maintain a minimum of $2,000, regardless of the brokerage you choose.
- A managed account. If you're a beginner or prefer to be hands-off, you can get an automated managed portfolio. This is a robo-advisor that automatically picks investments for you based on your goals. You need a minimum investment of $2,500 to open. The annual fee is 0.30% of your balance.
You can fund your account in a variety of ways, including wire transfers, an electronic transfer from your bank, or the good, old-fashioned way - with a check. Within just a few days, you'll be up and running and ready to dive into the market.
You must be a US citizen or legal permanent resident, and have a US address.
Fees & Commissions
Ally Invest has straightforward pricing and boasts one of the lowest fees on the market.
- Stock and ETFs: $4.95 per trade
- Options: $4.95 plus $0.65 per contract
- Mutual funds: $9.95 to buy or sell no-load mutual funds
Is Ally Safe?
Ally's long history started in 1919 when it was founded as GMAC (the financial sector of General Motors). It was originally an auto finance company and slowly expanded its financial services over the decades. In 2009, it was rebranded as Ally Bank.
Ally Bank is an online-only bank, which allows them to strive for high interest rates on their bank accounts with minimal fees.
In 2016, Ally Financial acquired TradeKing, which became Ally Invest. Ally Invest is a member of FINRA and SIPC. SIPC covers customer claims up to $500,000, including a $250,000 limit for cash claims. While SIPC protects against the loss of cash and securities (such as stocks and bonds) in the case that Ally Invest fails, it does not protect against investment losses from the market. And it does not cover Forex or futures trading.
SERVICES AND FEATURES
Ally Invest offers a wide assortment of investment possibilities, including:
- Stocks
- Mutual Funds: Ally offers thousands of mutual funds, but it doesn't have any no-transaction-fee funds.
- ETFs: Unfortunately, Ally doesn't offer no-commission ETFs.
- Fixed Income Securities
- Options Contract: Ally's platform offers very strong tools for options traders. If you're an options trader, it's hard to beat Ally's rate.
- Penny Stocks: Ally Invest charges 1 cent per share added to the regular $4.95 trade fee for stocks under $2. This is somewhat of a testament to the volatility of the penny stock market (also known as pink sheets or over-the-counter bulletin board). Don't let the seemingly harmless name of penny stocks fool you. It's a high-risk market where you can lose your shirt and a lot more if you don't know what you're doing.
- Forex (Foreign Exchange): Forex is the most popular traded market in the world. In a nutshell, Forex is traded in pairs: you're buying one currency while selling another. There's a fair amount of risk involved.
To trade Forex on Ally, you need a minimum deposit of $250. And you need to sign up for a separate Ally Forex account. There's no commission fee to trade Forex.
You can't swim without getting in water. Likewise, you can't master trading Forex without experience. Ally offers a $50,000 virtual practice account with full access to the platforms and tools for 30 days. This practice account is free, and you'll have over 50 pairs of currency to choose from.
- Futures: Futures trading is an agreement to buy or sell an asset at a pre-planned future date and price. To trade futures, you need to open a separate Ally Futures account. The tiered commission plan allows high-volume traders to trade for as low as 45 cents per contract.
- IRA/ROTH IRA: Ally Invest offers different IRA retirement accounts, including the Traditional and Roth IRA. If you're not sure which one is best for you, the Ally Invest FAQ page explains the difference to help you decide. You can also choose a managed IRA account.
Get Up to $3,500 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only. Account must be funded for at least 60 days to be eligible for cash bonus. Terms apply.
PLATFORM AND TOOLS
Ally Invest's platform - called Ally LIVE - is available for free for anyone who opens an account.
It offers tools such as:
- Real-time streaming and quotes
- Fully customizable dashboard where you can drag/remove modules however you want
- 6 chart types with 90 chart studies and drawing tools
- Adding alerts to your charts
- Options tools, including option chains, probability calculator, and profit/loss graph
- Research data, including charts, company quotes, high/low prices, and peer performance comparisons
- Free tools by Recognia
Ally's platform is obviously looking to bat with the big boys. But it's still lacking in some tools, such as heatmaps. It's constantly listening to feedback and making improvements based on customer needs, so hopefully even more tools will come in the future.
Note: The Ally LIVE Platform works only for Windows. Mac users will have to use the web platform, which is not as advanced as the LIVE platform.
Once you're into your account, the platform is pretty simple to use. You'll see menu options across the top of the page. The Dashboard is an overview of your activities and links to other parts of the platform. You'll do all your buying and selling in the Trading tab. The Research tab is where you'll find Ally's news and research for markets, stocks, and options.
MOBILE APPS
Ally Invest offers trading on-the-go with its iPhone and Android apps. They are simplified versions of the desktop platform. The functions are limited, but they have most of the core abilities, such as:
- Trade stocks and options from your phone
- Get live streaming quotes, chart positions, and current news
- Use advanced charting tools
- View your watch lists
- Monitor your investments and check balances
Pros and Cons of Ally Invest
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| © Pictures of Money (CC BY 2.0) via Flickr |
Get Up to $3,500 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only. Account must be funded for at least 60 days to be eligible for cash bonus. Terms apply.
Pros: Why We Like Ally Invest
- Low Pricing. Ally Invest's low trade fees are hard to beat at only $4.95 each for basic stock and ETF trades, regardless of the value of the trade. Options only cost an additional $0.65 per contract on top of the $4.95 base fee. Buying or selling load mutual funds costs $0, while no-load mutual funds cost $9.95.
- Product Variety: You'll have access to almost any investment vehicle you want through the Ally Invest platform. It even offers Forex and futures, which are not available for all brokerages.
The majority of investors looking for an online brokerage account for personal investment will only scratch the surface of the investment possibilities Ally Invest has to offer.
- Research and Tools: Though not as extensive as E-Trade and other online brokerages, Ally Invest's tools and resources are nothing to sneeze at. Ally offers real-time market streaming, quotes, data, and account balances.
- Financial Education: Ally Invest also provides a thorough FAQ page and education section that clearly explains investment terminology that might otherwise scare the novice away. These help investors familiarize themselves with the ins and outs of investing in different types of securities like Forex, ETFs, and options.
- Customer Service. Ally Invest offers 24/7 customer service by phone. And if you want to talk online, it has a 24/7 live chat option as well when you're logged into your account.
Get Up to $3,500 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only. Account must be funded for at least 60 days to be eligible for cash bonus. Terms apply.
Cons: Why You Might Look Elsewhere
- No physical locations. Since Ally is online-only, there are no physical locations where you can just pop in and ask for investment advice. If you may need some guidance, there are other brokerages with physical offices throughout the U.S.
- No transaction-fee-free mutual funds and commission-free ETFs. It's a bummer that Ally doesn't offer any of these, when you can easily trade mutual funds and ETFs with no fees with other brokerages.
- IRA fees: Having the option to invest in an IRA right from your brokerage account is a nice feature, but there is a $50 fee if you transfer or close the account.
How it Compares
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No review of Ally Invest is complete without a look at how Ally Invest compares with E-Trade, Fidelity and TD Ameritrade. Here are the side-by-side comparisons to see how the brokers stack up.
Ally Invest vs Scottrade
Another online brokerage people consider is Scottrade, which will charge you $6.95 per stock and ETF trade. Options are traded at $6.95 plus $0.70 per contract. Scottrade has a more complicated fee structure in general, but it's well laid-out on the website. You'll also need a minimum of $2,500 to open an account with Scottrade, whereas you can essentially be penniless and open an account with Ally Invest. Scottrade has excellent resources and tools, but Ally Invest can definitely give it a run for its (and your) money.
Ally Invest vs E*Trade
While ETrade has higher commission fees, ETrade does offer the opportunity to invest in a select list of commission-free ETFs from WisdomTree, Global X Funds, and db-X. Plus ETrade offers checking account benefits and 30 physical locations across the country.
Ally Invest | E*TRADE | |
|---|---|---|
Benefits and Features | ||
| Stock Trading | $4.95 per trade ($3.95 per equity trade special pricing for high-volume/high-balance traders) | $6.95 per trade $4.95 per trade if you make 30+ trades a quarter |
| Options Trading | $4.95 base + $0.65 per contract (50 cents per options contract special pricing for high-volume/high-balance traders) | $6.95 + $0.75 per contract $4.95 + $0.50 per contract if you make 30+ trades a quarter |
| Minimum Deposit | $500 for brokerage accounts No account minimum for retirement accounts | |
| Mutual Fund Trading | $0 to buy/sell load mutual funds $9.95 to buy/sell no load mutual funds | $0 for no-load, no-transaction-fee funds $19.99 for transaction-fee funds |
| Commission Free ETFs | 200+ including ETFs from WisdomTree, Global X Funds, and db-X Deutsche Bank | |
| Penny Stocks | $0.01 per share on the entire order for stocks priced less than $2.00. Maximum commission per order not to exceed 5% of the trade value, with minimum commission of $4.95. |  |
| Broker Assisted Trades | ||
| Customer Service | ||
| Inactivity Fee | ||
| Maintenance Fee | ||
| Banking | Integrated with banking on ally.com. Manage your Ally banking and investment accounts in one place. | Checking account offers no minimum balance requirements, free online bill pay, and unlimited debit card and check transactions. |
| Mobile App | | |
| Desktop App | E*TRADE Pro (requires you execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000) | |
| Forex Trading | | |
| Futures Trading | | |
| Locations | ||
| Online Community | Trader Network to connect with other investors | ETrade Community lets you exchange trading and investing ideas with other ETrade customers. |
| Seminars | Live events and educational seminars at local branches. | |
| Stock Trading |  |  |
| Options Trading | | |
| Banking | | |
| Mobile App |  | |
| Commissions and Fees | | |
| Ease of Use | | |
| Online Community | | |
| Research | | |
| Trading Platform | | |
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Ally Invest: Pricing information from published website as of 09/18/2017 E*TRADE: Pricing information from published website as of 03/13/2017 | ||
Ally Invest vs Fidelity
Fidelity has 91 commission-free ETFs and more than 180 branch locations.
But you'll need a $2,500 minimum deposit to open an account with Fidelity. In comparison, Ally Invest has no minimum deposit.
Ally Invest | Fidelity | |
|---|---|---|
Benefits and Features | ||
| Stock Trading | $4.95 per trade ($3.95 per equity trade special pricing for high-volume/high-balance traders) | |
| Options Trading | $4.95 base + $0.65 per contract (50 cents per options contract special pricing for high-volume/high-balance traders) | $4.95 per online trade, plus $0.65 per contract |
| Minimum Deposit | ||
| Mutual Fund Trading | $0 to buy/sell load mutual funds $9.95 to buy/sell no load mutual funds | $0 transaction fee for Fidelity funds $0 on purchase for NTF (no transaction fee) non-Fidelity funds. ($49.95 on redemption if held less than 60 days) $49.95 on purchase for non-Fidelity funds; $0 on redemption. (Certain funds may have a $75 transaction fee). |
| Commission Free ETFs | 93 including 8 Fidelity Factor ETFs, 11 Fidelity Sector ETFs, 3 Fidelity Bond ETFs, Fidelity ONEQ, and 70 commission-free funds from iShares ETFs | |
| Penny Stocks | $0.01 per share on the entire order for stocks priced less than $2.00. Maximum commission per order not to exceed 5% of the trade value, with minimum commission of $4.95. | |
| Broker Assisted Trades | $32.95 per trade for representative-assisted trades. | |
| Customer Service | ||
| Inactivity Fee | ||
| Maintenance Fee | $12 per year for each noncore Fidelity fund under $2,000. $25 per year for SIMPLE IRAs. $48 per year ($12 per quarter) administrative fee for Fidelity HSA. | |
| Banking | Integrated with banking on ally.com. Manage your Ally banking and investment accounts in one place. | Fidelity Cash Management Account includes reimbursed ATM fees, no monthly fee, no minimum balance requirement, FDIC insurance, mobile check deposit, free billpay and free checkwriting. |
| Mobile App | | |
| Desktop App | Active Trader Pro (requires you trade 36 times or more in a rolling 12 month period) | |
| Forex Trading | | |
| Futures Trading | | |
| Locations | ||
| Online Community | Trader Network to connect with other investors | |
| Virtual Trading | | |
| Stock Trading | | |
| Options Trading | | |
| Banking | | |
| Mobile App | | |
| Commissions and Fees | | |
| Ease of Use | | |
| Online Community | | |
| Research | | |
| Trading Platform | | |
| Mutual Fund Trading | | |
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Ally Invest: Pricing information from published website as of 09/18/2017 Fidelity: Pricing information from published website as of 02/28/2017 | ||
Ally Invest vs TD Ameritrade
Ally Invest's commission for stock trades is less than TD Ameritrade, but TD Ameritrade investors have access to 100 locations in 34 states. Their cash management account features will appeal to buy-and-hold investors who value service over commission and do not plan to trade frequently.
Ally Invest | TD Ameritrade | |
|---|---|---|
Benefits and Features | ||
| Stock Trading | $4.95 per trade ($3.95 per equity trade special pricing for high-volume/high-balance traders) | |
| Options Trading | $4.95 base + $0.65 per contract (50 cents per options contract special pricing for high-volume/high-balance traders) | |
| Minimum Deposit | ||
| Mutual Fund Trading | $0 to buy/sell load mutual funds $9.95 to buy/sell no load mutual funds | $0 for no-transaction-fee mutual funds $49.99 for no-load mutual funds $0 for load mutual funds |
| Commission Free ETFs | ||
| Penny Stocks | $0.01 per share on the entire order for stocks priced less than $2.00. Maximum commission per order not to exceed 5% of the trade value, with minimum commission of $4.95. | |
| Broker Assisted Trades | ||
| Customer Service | ||
| Inactivity Fee | ||
| Maintenance Fee | ||
| Banking | Integrated with banking on ally.com. Manage your Ally banking and investment accounts in one place. | Cash Management account offers free ATM withdrawals, no monthly maintenance fees, free online bill pay, and free check writing. |
| Mobile App | | |
| Desktop App | ||
| Forex Trading | | |
| Futures Trading | | $2.25 per contract (plus exchange & regulatory fees) |
| Locations | More than 100 locations in 34 states | |
| Online Community | Trader Network to connect with other investors | |
| Seminars | ||
| Virtual Trading | Paper Trading to practice/test strategies and ideas. | |
| Stock Trading | | |
| Options Trading | | |
| Banking | | |
| Mobile App | | |
| Commissions and Fees | | |
| Ease of Use | | |
| Online Community | | |
| Research | | |
| Trading Platform | | |
Blank fields may indicate the information is not available, not applicable, or not known to CreditDonkey. Please visit the product website for details. Ally Invest: Pricing information from published website as of 09/18/2017 TD Ameritrade: Pricing information from published website as of 03/13/2017 | ||
BOTTOM LINE: Why Use Ally Invest
It's hard to beat Ally Invest's low $4.95 price per trade. But you still need to do your research and thoroughly investigate to see if it's the most palatable for you. At first glance, the website's lack of bells and whistles might turn off the first-timer. However, spending a little more time learning about what Ally Invest has to offer and how to initiate a trade will help truly determine if it's the place for you. It's good if you want to trade options, futures, or Forex, as those have strong platforms.
Ally Invest's low price does not make it a lesser platform. The resources it offers can challenge even the most heralded online broker. The website might not be as colorful and fancy or have a research database that's as extensive as others, but it can definitely hold its own and is worth considering as your online brokerage.
Get Up to $3,500 Cash Bonus and Commission Free Trades for 90 Days
New Ally Invest customers only. Account must be funded for at least 60 days to be eligible for cash bonus. Terms apply.
Cynthia Cohen is a retail analyst at CreditDonkey, a stock broker comparison and financial education website. Write to Cynthia Cohen at cynthia@creditdonkey.com. Our data-driven analysis has been recognized by major news outlets across the country and has helped families make savvy financial and lifestyle decisions.
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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