June 15, 2019

Ally Invest Roth IRA

Read more about Ally Invest
This article contains references to products from our partners. We may receive compensation if you apply or shop through links in our content. You help support CreditDonkey by reading our website and using our links. (read more)

Ally Invest's Roth IRA account has no annual fee and low trade commissions. Is it right for your retirement funds? Read on to learn how Ally Invest Roth IRA accounts work.

Ally Invest Roth IRA at a Glance:

  • Minimum investment: $0
  • Annual fee: $0
  • Trade fees: $0 per trade for stocks & ETFs

Ally Invest Roth IRA Account Fees & Minimums

The following fees apply to Ally Invest IRA accounts:

  • IRA annual fee: $0
  • Minimum investment: $0
  • Inactivity fee: $0
  • IRA transfer fee: $50 (partial or full account transfers)
  • IRA closure fee: $25 (charged when all funds are removed from the IRA)

If you're doing a full transfer out of Ally Invest, you'll incur both a $50 transfer fee and $25 closure fee.

Ally Invest IRA Trade Commissions

Ally's trade fees are among the lowest in the industry. These are the commission costs and types of trades you're able to make in an IRA:

InvestmentCommission Costs
Penny StocksAdditional 1 center per share for stocks under $2
Stock and ETFs$0 per trade
Options$0 + $0.50 per contract (based on approval level)
Mutual Funds$9.95 to buy or sell no-load mutual funds
Bonds$1 per bond (minimum $10, maximum $250)
Treasuries$1 per bond (minimum $10, maximum $250)
CDs$24.95 per transaction
Broker-assisted Trades$20 + regular commission

Ally Invest also offers over 500 commission-free ETFs from Vanguard, GlobalX, WisdomTree, iShares and more.

All new accounts (no matter your opening deposit amount) will receive 90 days of free trades, up to $500 in value. In addition, you'll still be eligible for the up to $3,500 cash bonus as well.

Ally Invest IRA accounts do not have margin, short selling, and selling naked options.

Not all option trading strategies are allowed in IRAs. If you want to trade options in your IRA, your account must be approved for options trading.

Ally Invest IRA Cash-Enhanced Managed Portfolio

If you don't want to manage your own Roth IRA, Ally Invest also offers a robo-advisor service called Cash-Enhanced Managed Portfolio.

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.

Cash-Enhanced Managed Portfolio is free of advisory fees, which beats out many other robo-advisors. However, the catch is that 30% of your portfolio will be held in cash. Read more about it in our detailed review.

How Roth IRAs Work

A Roth IRA is an Individual Retirement Account. Investment earnings can only be withdrawn after you've reached a certain age.

With a Roth IRA, you are contributing money that has already been taxed in your paycheck. So you will not be taxed again when you take the funds out. All investment gains are tax-free too.

Here are some rules and facts about Roth IRAs:

  • Contributions are made with after-tax income.
  • Your withdrawals are tax-free after age 59½.
  • The maximum contribution per year is $6,000 ($7,000 if you're 50 or over).
  • You can't contribute if you earn over certain income limits (more below).
  • You can withdraw contributions anytime with no penalty.
  • As long as you're earning income, you can contribute no matter your age.

Difference between a Traditional IRA and Roth IRA:
With a Traditional IRA, your contributions are made with pre-tax dollars and are tax deductible. When you withdraw at retirement age, you'll have to pay regular income tax.

With a Roth IRA, your contributions are made with post-tax dollars and are not tax deductible. But when you withdraw at retirement, you won't pay taxes.

How to Open an Ally Invest Roth IRA Account

Opening an Ally Invest Roth IRA is easy and can be done in just a few minutes.

  1. Choose Approach
    First, decide if you want a self-directed or managed account.

  2. Register
    You'll be asked if you're new to Ally or an existing customer. If you're new, register with your name and email.

  3. Select Account Type
    Select which type of account you want to open. To open a Roth IRA, select IRA and then "Roth IRA".

  4. Basic Information
    Provide basic personal information, including address, phone number, marital status, and Social Security number.

  5. Fund Account
    Link a bank account. After you've funded your account, you'll be set up and ready to start trading. You can also open an Ally Invest IRA with $0 and fund it later.

How to Contribute to an IRA

You can fund your Ally Invest Roth IRA account the following ways:

  • Bank Wire
    This is the fastest way to fund your account. Bank wires can take just a few hours to one business day. Make sure you indicate the contribution year on your wire.

  • Mail-in Check
    Snail mail may take a couple of days, but Ally Invest will process it as soon as they receive it and verify the check. Again, indicate the contribution year on your check.

  • Online Transfer
    You can link your bank accounts and make online transfers whenever you wish or set up automatic recurring contributions. This is the most convenient, but not the fastest. It takes time to process the transfer and there's a clearing period of 3 business days.

  • Journal of Cash
    If you already have an Ally Invest individual or joint account, you can perform a journal of cash from the existing account to the new IRA account.

Roth IRA Contribution Limits

For 2019, here are your Roth IRA annual contribution limits:

  • $6,000 for those under age 50
  • $7,000 for ages 50 and over

Roth IRAs have income limits. For 2019, single filers can make the full contribution if you make less than $122,000/year, and a limited contribution if you earn up to $137,000.

Joint married filers can make the full contribution if your combined income is less than $193,000/year, and a limited contribution for a combined earnings up to $203,000.

Other Types of IRA Accounts

Ally Invest also supports these other IRA accounts:

  • Traditional IRA
    Your contributions are made with pre-tax dollars and are tax deductible. You'll have to pay regular income tax when you withdraw upon retirement.

  • Rollover IRA
    This allows you to rollover a 401(k) from your employer. It becomes a Traditional IRA when you roll it over.

  • SEP IRA
    This IRA account is for self-employed individuals and small business owners. Your contributions are tax deductible, but you'll be taxed at your current tax bracket when you withdraw at retirement. SEP IRAs have higher contribution limits than Traditional and Roth IRAs.

  • SIMPLE IRA
    This is an employer-sponsored IRA plan for small businesses with an employer match incentive built in. Contributions are pre-tax and tax deferred until you withdraw at retirement.

  • Coverdell Educational Savings Account (ESA)
    This was originally called an Education IRA. It allows you to save for a child's education. Contributions are not tax deductible and are limited to $2,000/year, but withdrawals are tax-free.

Bottom Line

Ally Invest is not as well-known as other popular IRA providers, such as Fidelity and Vanguard. But it's worth considering. Ally Invest has some of the lowest trade fees in the industry. And with no annual fee and no minimums, its Roth IRAs are a great place for anyone to start saving in a retirement fund.

Disclaimer: Opinions expressed here are author's alone. Please support CreditDonkey on our mission to help you make savvy 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.

More from CreditDonkey:


Best Roth IRA Providers


Rebalance IRA Review

Umbrella in the wind

Best Retirement Accounts

Compare:

More Articles in Money Tips


Leave a comment about Ally Invest Roth IRA?

Name
Email (won't be published)


November
01
2019

Rich Dad Poor Dad Review

You don't need to earn a high income to be rich. That's the moral of Kiyosaki's bestselling book. Is Rich Dad, Poor Dad worth reading? Find out in our review.
    How to Compare Online Stock Brokers

    Stock Trading

    Are you tired of earning just pennies on your savings every month? Are you looking for another way to build wealth? Do you want to invest in the stock market but don't know where to start?

    The Best Way to Invest $100

    $100 may not seem like much, but you can make it grow into more. Here are 10 clever ways to turn that $100 into a better future.

    Study: Best Brokerage Accounts

    Finding the right online broker is a difficult task. Dozens of sites claim to offer the best solution for your investing needs, whatever they may be. These sites tempt you with the promise of having the lowest fees, the most intuitive interface, and more investment choices than the competition.

    Passive Income: Practical Ideas to Build Wealth

    The best passive income ideas help you build real wealth and achieve financial freedom. Here are 25+ opportunities and examples for beginners.

    Best Short Term Investment Options

    The best short term investment options provide good returns with low risk. Here are the top 10 strategies for your short term goals.

    Best High Yield Savings Accounts

    Make your money work harder for you in a high-yield savings account. Here are the top savings accounts to grow your money.

    Best Online Bank

    Online banks are convenient, pay higher interest rates, and have less fees. Read on for our list of the best online banks for your money.

    Best Roth IRA Providers for Beginners

    Opening a Roth IRA is one of the best money moves you can make. But where should you open an account? Here are our top recommended Roth IRA providers.

    How to Invest and Make Your Money Work for You

    So, you want to invest some of your money, but you have no idea how to start? No problem. This handy 10-step guide is loaded with useful resources to help you get started.

    How to Start Investing

    Want to invest in stocks or real estate? Beginners can start can start with as little as $100. Keep reading to learn how you can invest your money for the first time.

    How to Trade Options

    Trading options is complex, but could be highly profitable. Educate yourself with this options trading tutorial for a simple introduction.

    Ally Cash-Enhanced Managed Portfolio Review

    Ally Cash-Enhanced Managed Portfolio offers automated investing with no advisory fees. But what's the catch? Read on to find out how it compares to other top robo-advisors.

    Best Options Broker

    The best options broker offers great service, low prices, and a user-friendly trading platform. Find the top options brokers to consider.

    Best Ways to Invest $10,000

    Have $10,000 to invest? Here are 14 smart investments ideas that will turn that $10k into even bigger money.

    Best Discount Broker

    The best online broker offers low fees, great customer service, and smart research tools. Find the best discount brokerage to consider.

    How to Invest in Stocks with Little Money

    Think you don't have enough money to invest? You can start with as little as $5. Read our top ways to invest a little money and start earning now.

    23 Reasons Why You Should Invest in Stocks

    Despite the economy's ups and downs, the stock market has consistently proven to be a good place to invest your disposable cash and save for your future (as long as you can withstand the ups and downs and plan for the long term). The popularity of online brokerages attests to the demand for stock accessibility in an increasingly DIY society.

    Residual Income

    Make money and get paid even after the upfront work is done. Learn how residual (or passive) income works. Here are 10 good investment ideas to build it.

    Best Investment Apps for Beginners

    Looking to start investing? You can begin with as little as $5. Check out these cheap (or free) apps for new investors.

    How to Invest $100k

    Investing large sums of money in a savings account or standard CD? That mistake may be costing you. Learn better ways to invest $100K and increase your profits in our guide.
More Articles in Investing









About CreditDonkey®
CreditDonkey is a stock broker comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the card offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.