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
- Low commission for stock trades
- No account minimums
- Online trader network
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, you can trade and 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 and Scottrade, 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?
This must-read review will give you the cold hard facts about Ally Invest in plain English, giving you the knowledge to make the best choice for you.
Who Ally Invest Works Best For
TradeKing (now Ally Invest) is a great platform for investors looking for a simple online brokerage account to execute their own straightforward investment strategies. If you're someone with a basic understanding of markets and security types and you have a general idea of the securities you're interested in purchasing, this platform is a great low-cost alternative to some of the more popular and widely advertised brokerages like E-Trade and Scottrade.
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 OR a more seasoned investor wanting to get involved advanced trades like those involving futures contracts. 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 2017
Open an Ally Invest account
Open an Ally Invest IRA today. No IRA fees
Trade stocks for $4.95
FEES AND OPENING AN ACCOUNT
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Ally Invest has straightforward pricing and boasts one of the lowest on the market.
- Stock and ETFs: $4.95 per trade
- Options: $4.95 plus $0.65 per contract
- Mutual funds: $0 to buy or sell load mutual funds and $9.95 to buy or sell no load mutual funds.
Opening an account is easy and takes just about 10 minutes (you must have a U.S. address). There are no account minimums unless you have a margin account (which is governed by federal regulation). Regardless of the brokerage you choose, you must maintain a minimum of $2,000 for any margin account.
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.
SERVICES AND FEATURES
Ally Invest offers a wide assortment of investment possibilities, including:
- Stocks
- Mutual Funds
- ETFs
- Fixed Income Securities
- Options Contract
- Penny Stocks: The one cent surcharge that Ally Invest charges per share of any stock under $2 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):If you're not familiar with forex, TradeKing has an extremely helpful "Forex for Dummies" explanation of the basics on its website. In fact, it invites you into this trading world right on the homepage. You're then brought to a specific platform that spells out exactly how forex trading works.
In a nutshell, forex is traded in pairs: you're buying one currency while selling another. It's the most popular trading market in the world, but there's a fair amount of risk involved.
You can't swim without getting in water. And likewise, you can't master trading forex without experience. Luckily, TradeKing offers a $50,000 virtual practice account if you want to try your hand at forex before diving in with your real money. There's no fee to trade in the virtual account, and you'll have over 50 pairs of currency to choose from.
- IRA/ROTH IRA: Ally Invest offers different IRA investments, including the Traditional and Roth IRA. If you're unsure of which one is best for you, there's a comparison chart on the Ally Invest FAQ page to help you decide.
Open an Ally Invest account
PLATFORM AND TOOLS
Unlike E-Trade Pro, which is only offered to investors who make at least 30 trades a quarter, Ally Invest is a free platform for anyone who opens an account.
Though not as extensive as E-Trade, it offers many of the same tools: Real-time streaming and quotes, customizable dashboards where you see only the stocks you're interested in, condensed full-page views of options chains and charts, multiple products all on one page or a single page view of a security with more detailed information about it.
Ally Invest is obviously looking to bat with the big boys on this live platform. It's constantly listening to feedback and making improvements based on customer needs, which means that in the future, it will have even more tools to help you invest wisely and hopefully earn your fortune.
MOBILE APPS
Ally Invest offers trading on the go with its iPhone and Android apps. At your kid's soccer match, you can trade stocks and options from your phone - as well as get live streaming quotes, chart positions, current news, and custom stock alerts - and still have time to watch your child score a goal. You have the option of remaining logged on if you know you're going to make another trade soon and want the convenience of not having to sign in again.
Trader Network
Besides low priced trades, TradeKing (now Ally Invest) also gets high marks from our editors for its award-winning Trader Network.
Forum: It's a social media network for investors to trade tips, highs and lows, and speculations about where to put their money. Here are top reasons why the TradeKing (now Ally Invest) community is the Gold Standard:
- You can spy on others' trades and then try to figure out their reasoning.
One of the most useful features of the TradeKing community is the +Add Network button. With one simple click you can add traders to your network and see what they're buying and selling each day. If you've got a question about a particular trade, you can send a Trade Note request or a private message to get the scoop. - You can get tips straight from industry experts.
The Trader Network isn't just for everyday investors. You'll also find industry experts like Michael Kahn and Rob Smith chiming in on the TradeKing All-Stars blog on a regular basis. The Options Guy blog, authored by veteran investment guru Brian Overby, is a must-read for the latest insights on options trading. - You can establish yourself as an authority.
If you've got years of trading experience under your belt, the TradeKing community provides a way for you to show off. Once you become a registered member, you can set up your own blog and post your views on the latest market trends or what you think the next big stock is going to be.Did you know: There are over 400 individual member blogs on TradeKing and some of the most popular ones, like the one authored by somebody calling himself DividendYield, feature hundreds of insightful posts.
- Trades are transparent.
Investing is all about making calculated decisions. Understanding the "why" behind a particular trade can shape your own investment choices. The Trade Notes feature allows you to look at other users' trade diaries to see which securities may be potential gold mines and which ones you should avoid. You can also record your own stock, options or ETF trades for other members to view, along with an explanation as to why you decided to buy or sell. - Get real-time info and track the hottest securities.
The market can change on a minute-by-minute basis. So, unless you're a full-time broker, you probably don't have time to analyze its every move. One of the best things about the TradeKing community is that you can track the 50 most active stocks and options as they're being traded, so you never miss an opportunity. - You can get feedback on your trading strategy.
Making mistakes is par for the course when you're a new investor. They even happen to seasoned traders from time to time. If you don't have the time or money to consult an investment advisor, you can head over to TradeKing to share ideas and get advice. For example, the recent market downturn has sparked some heated debate about what the next step is for options traders and what the Fed's inaction on interest rates means for investors. - You can connect with like-minded investors.
The TradeKing community encourages open discussion. It currently has more than 160 online discussion groups, and you can read the archives or start your own group if there's a topic you want to build a conversation around.Tip: The Beginning Investors group is the largest with more than 1,200 members, and the Options for Beginners group also has several hundred members. - You get access to free investing tools.
TradeKing (now Ally Invest) offers lots of free resources to help you make smart investing decisions. From calculators to videos to in-depth reports, you've got a wealth of information to tap into whenever you need it. - It's user-friendly.
The Trader Network centers around helping investors come together to share their knowledge, bounce ideas off one another, and fine-tune their trading strategy. Years of investing experience aren't required here and the community itself is easy to navigate. When users have trouble getting around, the company actively considers making changes. For instance, when the site has had performance issues during transitional times - after a merger or right before an upgrade - it's been responsive to users' requests and complaints.
The Trader Network community is a welcoming spot for both beginning and seasoned investors. The fact that there's so much great information and it's user-friendly makes it a prime destination for getting insights on your trades so you can continue to build wealth.
Pros and Cons of Ally Invest
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Pros: Why We Like Ally Invest
- 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: stocks, ETFs, mutual funds, IRAs, options contracts, forex, etc.
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.
- Investor Support: In addition to standard research tools found with most online brokerages that provide you with all the vital information about specific investments, Ally Invest also has a vibrant trader community that can be a great source of support and information for novice investors.
There are also plenty of FAQ and "beginner guide" type pages to help investors familiarize themselves with the ins and outs of investing in different types of securities like forex, ETFs, and options contracts (if they want to go beyond stocks and mutual funds.) It's Facebook without the photos: you can share thoughts, ask questions, rant, and join forums with like-minded investors who feel your pain and joy. This is a real plus, especially when you're just starting out. You can gain information or just chat about your investment strategies.
- 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. In addition to real-time market streaming, quotes, data, and account balances, Ally Invest also provides a thorough FAQ page that clearly and concisely explains investment terminology that might otherwise scare the novice away. Another convenience is AutoTrade, which will automatically place your trade based on your parameters if you don't have the time to sit in front of your computer or mobile device all the time.
- Highly Rated: Anyone who's looking to do their own hands-on investing is probably a bit of a research junkie, so it's beneficial to know that trusted financial resources have ranked TradeKing (now Ally Invest) highly in several areas. Barron's customer survey of online brokers has given TradeKing a four-star rating for the past 9 years - no easy feat. In addition, from 2010-2012, SmartMoney has ranked TradeKing #1 in Customer Service, as noted on their website
Tip: For those who want to talk online, TradeKing offers an online chat option.
Here's a video of TradeKing CEO talking about how important customer service is to their culture.
Cons: Why You Might Look Elsewhere
- IRA fees: Having the option to invest in an IRA right from your brokerage account is a nice feature, but be aware that transferring the account out of Ally Invest carries a $50 fee.
How it Compares
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Ally Invest vs OptionsHouse
If you're researching discount brokers, you'll probably came across another popular $4.95 per trade online broker, OptionsHouse. So how else do they compare? Let's see:
Ally Invest | OptionsHouse | |
|---|---|---|
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 + $0.50 per contract (only one base charge per spread, straddle, or combo) |
| Mutual Fund Trading | $0 to buy/sell load mutual funds $9.95 to buy/sell no 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. | Additional fee of $0.005 per share of stock traded for stocks priced $2.00 or less that are not options eligible. |
| Broker Assisted Trades | ||
| Inactivity Fee | ||
| Maintenance Fee | ||
| Minimum Deposit | $0 minimum funding level to open a new account. $2,000 minimum funding for a margin account $2,000 account minimum to establish checking writing privileges and $10,000 account minimum to establish debit card privileges | |
| Banking | Integrated with banking on ally.com. Manage your Ally banking and investment accounts in one place. | |
| Mobile App |  | |
| Forex Trading | | |
| Futures Trading | | |
| Customer Service | ||
| Online Community | Trader Network to connect with other investors | |
| Seminars | ||
| Virtual Trading | | |
| 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 01/19/2015 OptionsHouse: Pricing information from published website as of 01/26/2015 | ||
Ally Invest vs Scottrade
Another online brokerage worth comparing with Ally Invest 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 | Scottrade | |
|---|---|---|
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) | |
| Mutual Fund Trading | $0 to buy/sell load mutual funds $9.95 to buy/sell no load mutual funds | No Fee to Buy/Sell/Exchange No-Load, No-Transaction Fee Funds $17 to Buy/Sell/Exchange No-Load Funds $0 to Buy Load Funds and $17 to Sell/Exchange Load Funds |
| 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. | $6.95 per trade + 0.5% principal for any stock trading under $1 |
| Broker Assisted Trades | ||
| Inactivity Fee | ||
| Maintenance Fee | ||
| Minimum Deposit | $2,500 for brokerage accounts No account minimum for retirement accounts | |
| Banking | Integrated with banking on ally.com. Manage your Ally banking and investment accounts in one place. | Scottrade Bank has no monthly maintenance fees, ATM reimbursement program, online bill pay, and mobile banking. |
| Mobile App | | |
| Desktop App | ScottradeELITE (requires you execute 9 or more stock or option trades during the past 3 months, have $25,000 in your primary account, or have $15,000 in your primary account and combined linked assets of $25,000 or more) | |
| Forex Trading | | |
| Futures Trading | | |
| Customer Service | (800) 619-7283 (Monday to Friday 6am to 1am Eastern; Saturday and Sunday 9am to 7pm Eastern) | |
| Locations | ||
| Online Community | Trader Network to connect with other investors | |
| Seminars | In-person branch seminars, online events and live webinars | |
| Virtual Trading | ScottradeELITE offers virtual trading | |
| Stock Trading | | |
| Options Trading | | |
| Banking | | |
| Mobile App | | |
| Commissions and Fees | | |
| Ease of Use | | |
| Online Community | | |
| Research | | |
| Trading Platform | | |
| Customer Service | | |
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 01/19/2015 Scottrade: Pricing information from published website as of 03/27/2017 | ||
Ally Invest vs E*Trade
No review of Ally Invest is complete without a look at how Ally Invest compares with E-Trade and TD Ameritrade. Here are the side-by-side comparisons to see how the brokers stack up.
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 |
| 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 | 118 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 | ||
| Inactivity Fee | ||
| Maintenance Fee | ||
| Minimum Deposit | $500 for brokerage accounts No account minimum for retirement accounts | |
| 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 | | |
| Customer Service | ||
| 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 01/19/2015 E*TRADE: Pricing information from published website as of 03/13/2017 | ||
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 that will appeal to buy-and-hold investors who value service over commission and do not plan to frequently trade.
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) | |
| 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 | Over 100 including 37 Equity Funds, 31 Bond Funds, 30 International Funds, and 3 Commodity Funds. | |
| 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 | ||
| Inactivity Fee | ||
| Maintenance Fee | ||
| Minimum Deposit | ||
| 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) |
| Customer Service | ||
| 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 01/19/2015 TD Ameritrade: Pricing information from published website as of 03/13/2017 | ||
Ally Invest VS. OPTIONSXPRESS
If you trade options, OptionsXpress is an online brokerage that often goes head to head with Ally Invest. Both have pluses and minuses. Both brokerages have excellent customer service, offer no account minimums, and are rated highly by financial magazines.
Ally Invest | OptionsXpress | |
|---|---|---|
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) | |
| Mutual Fund Trading | $0 to buy/sell load mutual funds $9.95 to buy/sell no load mutual funds | |
| Commission Free ETFs | Over 200 including Schwab Market-Cap Index ETFs and Schwab Fundamental Index 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 | No broker assistance fees (beyond regular commission) | |
| Inactivity Fee | ||
| Maintenance Fee | ||
| Minimum Deposit | ||
| Banking | Integrated with banking on ally.com. Manage your Ally banking and investment accounts in one place. | |
| Mobile App | | |
| Desktop App | ||
| Forex Trading | | $0 (optionsXpress receives compensation through the bid/ask spread) |
| Futures Trading | | |
| Customer Service | (888) 280-8020 (Monday to Friday 9am to 8pm Eastern) | |
| Online Community | Trader Network to connect with other investors | Message board and options/futures blog |
| Seminars | Free webinars and local workshops at Schwab branch offices | |
| Virtual Trading | Free $25,000 virtual trading account allows you to practice trading stocks, options and futures. | |
| Stock Trading | | |
| Options Trading | | |
| Banking | | |
| Mobile App | | |
| Commissions and Fees | | |
| Ease of Use | | |
| Online Community | | |
| Research | | |
| Trading Platform | | |
| Education | | |
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 01/19/2015 OptionsXpress: Pricing information from published website as of 04/09/2017. | ||
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 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 offers trading in stocks, bonds, ETFs, mutual funds, and fixed-income securities, among other investments.
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, but it can definitely hold its own and is worth considering as your online brokerage.
Open an Ally Invest account
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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