Ally Invest Review: Pros and Cons

Ally Invest offers free trades for stocks and ETFs. But is it good? Find out how it compares to other online brokers.

Though not as well-known as competitors (such as E*TRADE and TD Ameritrade), Ally Invest can certainly hold its own against the big boys. It consistently ranks near the top of customer satisfaction ratings and in most Ally Invest reviews.

And best of all, its trade fees are among the lowest of any online brokerage around.

But there are some drawbacks you'll want to know before opening an account. Read on to find out:

• About Ally Invest
  
• Who Ally Invest Is Best For
  
• Pros & Cons
  
• Ally Invest Promotions
  
• Opening an Account
  
• Types of Accounts
  
• Fees & Commissions
  
• Investment Offerings
  
• Platforms and Tools
  
• Robo Portfolios
  
• Ally Invest Forex
  
• Mobile App
  
• Is Ally Invest Safe?
  
• How It Compares

About Ally Invest

Ally's long history goes back to 1919 when it was founded as GMAC (the financial sector of General Motors). It slowly expanded its financial services and was rebranded as Ally Bank in 2009, offering online banking with high interest rates and minimal fees.

In 2016, Ally Financial acquired TradeKing, which became Ally Invest. New name, new site, and new mobile app. But the same low prices and same trading features.

Who Ally Invest Works Best For

© CreditDonkey

Ally Invest is a good choice for:

• Casual traders who want a simple online brokerage account and have a basic understanding of markets and security types.

• Active traders who can take advantage of the $0 commissions.

• Advanced traders who wish to invest in Forex and/or options.

• Ally banking customers who want investing and banking under one account and app.

• Beginner investors who want completely hands-off easy investing with Ally Invest Robo Portfolios.

If any of the above sound like you, Ally Invest is a great, low-cost alternative to some of the more popular and widely advertised online brokers like E-Trade and TD Ameritrade.

However, Ally Invest doesn't offer fractional shares. So it's not good for small investors who just want to invest a few bucks at a time. Check out one of these micro investment apps (like Robinhood or Stash) instead.

Pros & Cons

PROS:

• $0 online stock and ETF trades
  
• No account minimum to open
  
• Wide variety of investment options
  
• Strong Forex platform
  
• Robo Portfolios option for no advisory fees
  
• Customer support by phone and live chat
  
• Thorough FAQ and education section
  
• Also has full online banking services, so you can invest and bank at the same place
  
• Check out Ally Invest here >>

CONS:

• No fractional shares
  
• No physical locations
  
• No practice trading platform
  
• No transaction-fee-free mutual funds
  
• Research and tools not as extensive as other brokerages
  
• Fee for transferring or closing IRAs

We'll explain more below. But first, let's highlight the current Ally Invest promotions.

Ally Invest Promotional Codes

OPENING AN ACCOUNT

To open an Ally Invest account, you must be a US citizen or legal permanent resident and have a US address. You can get started in two ways:

1. A self-directed account.
   If you're comfortable investing on your own, you can manage your own investment portfolio.

   There is no no account minimum to open a self-directed account. And there are no annual fees, no maintenance, and no inactivity fee.

   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.^[1]
   

2. A managed account.
   If you're a beginner or don't have the time to self manage, the automated robo portfolio offers an easy solution. This is a robo-advisor that will automatically invest and manage your portfolio for you based on your goals.

   You need an account minimum of $100 to open. There are no advisory fees for Robo Portfolio.

You can fund your account via electronic transfer from your bank, wire transfer, or by mailing in a check.

Wire transfer will be the fastest method, while an electronic bank transfer can take 3 business days.

TYPES OF ACCOUNTS

Ally Invest supports the following accounts for self-directed trading:^[2]

• Individual taxable
  
• Joint
  
• Custodial
  
• IRAs (Traditional, Roth, Rollover)
  
• Coverdell

Robo Portfolios support:^[3]

• Individual and joint taxable
  
• IRAs (Traditional, Roth, Rollover)
  
• Custodial

Ally Invest Fees & Commissions

Ally Invest always had one of the lowest fees on the market. And in October 2019, it announced that there will no longer be any commission fees on U.S. listed stocks, ETFs, and options trades.^[4]

• Stock and ETFs: $0 per trade
  
• Options: $0 per trade plus $0.50 per contract
  
• Mutual funds: $9.95 to buy or sell no-load mutual funds
  
• Penny stocks: Additional $0.01 per share for stocks under $2
  
• Bonds: $1 per bond (minimum $10)
  
• Forex: No commission
  
• Broker assisted trades: $20 + regular commission
  
• IRA transfer fee: $50
  
• IRA closure fee: $25

All new accounts (no matter your opening amount) will get commission-free stock trading. But note that option trades still cost 50 cents per contract. This is lower than the standard 65 cents that most other online brokers charge.

INVESTMENT OFFERINGS

Ally Invest offers a wide assortment of investment options:

• Stocks

• Mutual Funds: Ally offers thousands of choices, but it doesn't have any no-transaction-fee funds.

• ETFs: Ally offers 500+ commission-free exchange traded funds from Vanguard, GlobalX, WisdomTree, iShares and more.

• Fixed Income Securities: Corporate, agency, treasuries, municipals, strips & zeros, CDs, and new issues.

• Options (equity & index): Ally's platform offers very strong tools for options traders, such as options chains and profit/loss calculator.

• Penny Stocks: Also known as pink sheets or over-the-counter bulletin board. These are very high-risk if you don't know what you're doing.

• Forex (Foreign Exchange): Ally offers a robust Forex trading platform for investors, plus a free practice account. You need a minimum deposit of $50. Read more about it in detail below.

• Margin trading: This means trading with borrowed money. Ally's margin interest rate is 10.75% for up to $9,999, with lowered rates for higher margins.^[5] This is lower than competitors like TD Ameritrade.^[6] But higher than Robinhood and Webull.^[7][8]

Ally Invest does not offer futures or cryptocurrency. It also doesn't offer fractional shares. You must purchase a full share of stock.

PLATFORM AND TOOLS

Ally's investment platform - called Ally LIVE - is available for free for anyone who opens an account.

It offers trading tools such as:

• Customizable dashboard. You can drag/remove modules however you want.
  
• Streaming charts. 8 chart types (such as candlestick, bar, mountain, and line) with 117 chart studies and 36 drawing tools.
  
• Alerts. Add alerts to your charts
  
• Watchlists. Create customized watchlists.
  
• Research data. See market stats, charts, company quotes, high/low prices, and peer performance comparisons.
  
• Free tools by Recognia.

Ally Invest offers robust tools for options. Options traders will especially find that the platform is well-developed to help you make informed decisions for these risky trades. Options tools include:

• Profit/loss graph: Understand a trade's potential before placing it.
  
• Probability calculator: Uses implied volatility to help you estimate the likelihood of hitting your targets.
  
• Options chains: Easily see what's available and place trades.

Here are some screenshots:

Markets Overview

Options Chains and Probability Calculator

Ally's platform is obviously looking to bat with the big brokers. But it's still lacking in some trading 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.

Managing Tax Strategies

Ally offers a Tax Lot Allocation tool and Maxit Tax Manager to manage the sale of your positions. These tools allow you to pick different tax lot methods to help minimize your tax bill.

Say you bought the same stock at different prices on different dates. Being able to select which lots to sell will affect your gains and losses, which affects how much tax you pay.

When selling securities, the account default is FIFO (first-in, first-out). But you can select a different tax lot method like LIFO (last-in, first-out) or choose specific shares. You must submit the change within 2 business days after execution of the trade.

Robo Portfolio

If you're a beginner or just wants to be hands-off, Ally Invest offers a robo-advisor called Robo Portfolios.

Ally will automatically build a portfolio for you based on your goals and risk tolerance. Your portfolio will be professionally managed so you don't have to worry about maintaining it.

Some features include:

• Diversified portfolio of ETFs
  
• Automatic rebalancing
  
• 4 portfolio options: core, income, tax-optimized, and socially responsible

You just need to invest a minimum of $100 to start. Robo Portfolios is free of advisory fees.This is lower than other robo-advisors like Betterment. However, the catch is that 30% of your portfolio will be held in cash. Read more about it in our detailed review.

Robo Portfolios lacks tax loss harvesting, which is a feature offered by many other robo-advisors.

ALLY INVEST FOREX

For Forex traders, you must sign up for an entirely separate platform and mobile app. Ally Invest Forex is a separate, but affiliated, company from Ally Invest.

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.

Ally offers two forex platforms: their own Ally Invest Forex and MetaTrader 4. Both allow you to trade over 80 currency pairs and offer fractional pricing.

Ally's Forex platform features include:

• Customized layout. You can choose from pre-set layouts or create your own to your preferences.

• Advanced charting. Includes more than 80 technical indicators, drawing tools, and integrated order management features. You can overlay technical studies and flip between charts and trade setups. You can even track, trade, and modify orders directly on the charts.

• Automation. You can create a custom trading strategy and automate it for real-time buy and sell signals.

• Research. Stay on top of the market with streaming updates, forecasted results, and potential impacts.

• Practice platform. You get a free $50,000 virtual practice account with full access to the platforms and tools for 30 days.

You need at least $50 to open an Ally Forex account, and $500 for MetaTrader 4. But it's recommended to start with at least $2,500 so you have more flexibility and better risk management.^[9]

MOBILE APP

Ally Invest offers trading on-the-go with its iPhone and Android apps - Ally Mobile. It's the same app as the Ally online banking. So if you use banking services as well, you can bank and invest under one roof.

Ally Mobile app has an average 4.8-star rating on the App Store. It provides investors with a single access to your banking and investing life. The reviews tend to highlight the ease of use.

The app offers a simplified version of the desktop platform. The functions are limited, but they have most of the core abilities, such as:

• Buy and sell stocks and options from your phone
  
• Get real-time streaming quotes, chart positions, and current news
  
• Use charting tools
  
• View your watch lists
  
• Monitor your investments and check balances

Is Ally Safe?

Ally Invest is a member of SIPC and FINRA (CRD #136131). SIPC, created under federal law, protects your securities (up to $500,000) and cash (up to $250,000) if your brokerage firm fails. FINRA ensures compliance with industry regulations. Additionally, Ally has a track-record going back to 1919.

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. Forex accounts are not protected by the SIPC.

Ally Invest's clearing firm, Apex Clearing, also has an additional insurance policy through London Underwriters to supplement SIPC protection. This additional insurance policy covers you if the SIPC limits are exhausted, for up to $150 million.^[10]

CUSTOMER SERVICE

Besides low fees, Ally Invest has high user satisfaction ratings. It offers good customer support with a human. You can reach Ally Invest by:

• Phone: 1-855-880-2559
  
• Live chat online
  
• Email: support@invest.ally.com

How It Compares to Other Online Brokers

No review of Ally Invest is complete without a look at how Ally Invest compares with industry heavyweights Fidelity, E*TRADE, and TD Ameritrade. Here are the side-by-side comparisons to see how the brokers compare.

Ally Invest vs E*TRADE

E*TRADE also made the move to commission-free trades. But it offers a large selection of no-transaction-fee mutual funds, which Ally Invest does not have. The better one for you depends on what you want to invest in.

E*TRADE's investment platform is top notch when it comes to research and trading tools. Investors with more experience may find more value in E*TRADE.

E*TRADE also offers checking account benefits and 30 physical locations across the country.

	Ally Invest	E*TRADE
	Benefits and Features
Stock Trading	$0 per trade	$0 per trade
Options Trading	$0 base + $0.50 per contract	$0 per trade + $0.65 per contract $0 per trade + $0.50 per contract if you make 30+ trades a quarter
Minimum Deposit	$0	$0 for self-directed brokerage accounts; Managed portfolios start at $500 minimum
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	500+	250+
Penny Stocks	$0.01 per share on the entire order for stocks priced less than $2.00.
Broker Assisted Trades	$20 + Regular Commission	$25 + Regular Commission
Customer Service	(855) 880-2559	800-387-2331
Inactivity Fee		$0
Maintenance Fee		$0
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 to execute at least 30 trades during a calendar quarter or maintain brokerage account balance of at least $250,000)
Forex Trading
Futures Trading		$1.50 per contract, per side + fees (excluding bitcoin futures)
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 04/01/2021. E*TRADE: Pricing information from published website as of 12/05//2020.

Ally Invest vs Fidelity

Fidelity also offers commission-free stocks, ETFs, and options trades. However, Fidelity's mutual funds trading price is significantly higher. But it does offer a huge selection of no-fee funds such as zero minimum investment Fidelity Mutual Funds.

A downside is that Fidelity's trading platforms require users to make a certain amount of trades before they're granted access. The lowest is 36 trades per 12 months, but more advanced tools require 120 trades per 12 months.^[11]

Fidelity has more than 200 branch locations, so it's also good if you want in-person advice.

	Ally Invest	Fidelity
	Benefits and Features
Stock Trading	$0 per trade	$0 per trade
Options Trading	$0 base + $0.50 per contract	$0 per online trade, plus $0.65 per contract
Annual Fee		None
Cryptocurrency Trading		No
Minimum Deposit	$0	$0
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	500+	357 including 28 Fidelity factor, sector, stock, and bond ETFs and 329 iShares® ETFs
Phone Support		(800) 343-3548; available 24/7
Live Chat Support		No
Email Support		Yes
Human Advisors		Optional coaching or investment management with human advisors (for added fees)
Robo Advisor		Optional Fidelity Go robo-advisory service
Assets Under Management		$4.9 Trillion
Penny Stocks	$0.01 per share on the entire order for stocks priced less than $2.00.
Tax Loss Harvesting		No
Goal Tracker		Yes
Automatic Deposits		Yes
Broker Assisted Trades	$20 + Regular Commission	$32.95 per trade for representative-assisted trades.
Customer Service	(855) 880-2559
Good For		More experienced DIY investors; Mutual fund investors
Inactivity Fee		$0
Maintenance Fee		$0 account service fee
Online Platform		Yes (access to Active Trader Pro is available to those who trade 36 times or more in a rolling 12 month period)
iPhone App		Yes (4.8 stars, 1.7m ratings)
Android App		Yes (4.5 stars, 97k ratings)
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
Two-Factor Authentication		Yes
Forex Trading
Locations		More than 180
Online Community		Yes, it has an investor forum
Seminars		Yes, frequent webinars and courses for beginners
Virtual Trading		No
Fractional Shares		Yes
Taxable Accounts		Yes
401k Plans		Yes
IRA Accounts		Yes
Roth IRA Accounts		Yes
SEP IRA Accounts		Yes
Trust Accounts		Yes
529 Plans		Yes
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 04/01/2021. Fidelity: Pricing information from published website as of 12/05/2020.

Ally Invest vs TD Ameritrade

TD Ameritrade now also offers $0 commissions on online stock, ETF, and options trades. Its trading platforms are among the most advanced out of all online brokers. You get free access to all elite tools. Plus, there is a virtual platform where you can make practice trades before committing real money.

It also offers a cash management account, which includes a debit card, free ATM withdrawals, free check writing, and free bill pay.

TD Ameritrade investors have access to 100 locations in 34 states. Charles Schwab recently announced their plans to acquire TD Ameritrade.

OTHER SERVICES

Ally Invest is part of Ally Financial, which also includes a full-service online bank. Ally Bank gets very high satisfaction ratings for its competitive savings rates, user-friendly website, and good customer support.

Services include:

• Online savings account with 3.75% APY
  
• Interest checking with no monthly fees
  
• A variety of CDs with no minimum deposits
  
• Home loans
  
• Car loans

If you like having all your personal finance in one place, Ally is definitely worth looking into. You use one single login for both Ally Invest and Ally Bank, so it's convenient to manage everything under one roof.

Ally Invest transfer time

There are a number of factors that may affect transfer times for Ally Invest users.

If you're making an online transfer between two Ally Bank accounts, it will be processed immediately.

If you make a standard transfer between an Ally Bank account and non-Ally account before 1:00AM EST Monday through Friday, it will take three business days.

If your transfer is eligible for next-day delivery and is requested before 7:30PM EST Monday through Friday, it will take one business day.

Transfers between banks won't be processed on weekends and federal holidays.

Eligibility for next-day transfers is based on account tenure, account activity, and transfer activity such as overdrafts and returns. Next-day transfers aren't available to new accounts.

Ally Invest Crypto

Ally Invest users can't directly trade cryptocurrency. But that doesn't mean you're entirely cut off from the crypto market.

Instead, you can get indirect exposure to cryptocurrency through a number of crypto trusts, futures, and stocks of companies that hold crypto on their balance sheets.

Crypto Trusts include:

• Grayscale Bitcoin Cash Trust (BCHG)
  
• Grayscale Bitcoin Trust (GBTC)
  
• Grayscale Ethereum Classic Trust (ETCG)
  
• Grayscale Ethereum Trust (ETHE)
  
• Grayscale Litecoin Trust (LTCN)
  
• Osprey Bitcoin Trust (OBTC)

Bitcoin Futures include:

• ProShares Bitcoin Strategy ETF (BITO)
  
• Global X Blockchain ETF (BKCH)
  
• Valkyrie Bitcoin Strategy ETF (BTF)
  
• VanEck Bitcoin Strategy ETF (XBTF)

Crypto-related Stocks include:

• Coinbase Global Inc. (COIN)
  
• Marathon Digital Holdings Inc. (MARA)
  
• MicroStrategy Inc. (MSTR)
  
• Tesla Inc. (TSLA)
  
• PayPal Holdings Inc. (PYPL)
  
• Riot Blockchain Inc. (RIOT)

Can I buy Dogecoin or Bitcoin on Ally Invest?
No, you can't buy Dogecoin or Bitcoin on Ally Invest.

Ally Invest and penny stocks

If you're interested in trading penny stocks, Ally Invest is probably not the best platform to do it on because of the fees associated with trading stocks valued at less than $2.

While stocks valued over $2 are free to trade, there is a $4.95 trading fee for stocks valued less than that, with an additional $0.01 per share

This can make buying penny stocks on Ally Invest unnecessarily expensive.

Instead, those looking to trade penny stocks should find a commission-free platform for that purpose.

Frequently Asked Questions

Let's look at some of the most frequently asked questions about Ally Invest.

What are Ally Invest unsettled funds?
Unsettled funds are the proceeds from selling a security from the time the sale is made to the time the trade order is completed, a period of two business days.

Once the settlement period is over, they become settled funds.

Can you short sell on Ally Invest?
Yes, you can short-sell on Ally Invest.

Can I trade options on Ally Invest?
Yes, you can trade options at Ally Invest.

Can I link Ally savings account to Invest?
Yes, you can link your Ally savings account to your Ally Invest account for easy transfers.

How can I withdraw money from Ally Invest?
You can withdraw money from Ally Invest by logging into your account and choosing Transfers. Wire transfers incur a $30 fee, or you can request a check for $5.

Does Ally Invest support trailing stops?
No, Ally Invest does not support trailing stops.

BOTTOM LINE: IS ALLY INVEST GOOD?

Even though Ally is a budget broker with no physical locations, it's worth considering.

It's hard to beat Ally Invest's low cost of $0 per stock trade. But website is more basic, so true beginners may feel lost. It also doesn't have as extensive research and trading tools as other brokers, but it can definitely hold its own.

Ally is worth considering for budget investors or active traders. It's also good if you want to invest in options or Forex, as those have strong platforms.

References