Ally Bank was established by General Motors (GM) as a bank holding company in 1919. Its main objective was to provide quality financial services at best rates. The conglomerate was initially named GMAC, an acronym for GM’s finance department, which provided funds to automotive clients until 1939 when it diverted into vehicle insurance services.
Headquartered in Michigan, USA, Ally Bank currently offers financial services such as online banking, car loans, mortgages, corporate lending, and credit cards, among others. In 2019, Ally won the “Best Online Bank” award from a survey conducted by GOBankingRates.
See also: Best Credit Cards
Table of Contents
An Overview
Ally Bank was organized in Midvale, Utah, as an internet-based financial institution specialized in delivering savings services such as IRA accounts, cash deposits, and account checking, including the issuance of Certificate of Deposit (CD) and financial instruments.
The bank also provides consultancy services for customers in need of expert advice on buying or leasing vehicles. Its savings account interest rates are highest in the US when compared with offers from competitors such as HSBC, CIT Bank, and Synchrony.
Go to: Ally Bank’s website
Online Savings Account: As a full-service online financial institution, Ally Bank offers deposit and withdrawal services via its speedy online transfer channel ACH, which allows a maximum of six (6) free withdrawals every month. Bank customers are also entitled to issue cashier checks on the accounts without a fee. Ally Bank’s online savings accounts are opened with zero deposits, and there are no monthly maintenance fees.
Interest Checking Account: Ally Bank offers an interest checking account with the high compound interest rate for those with a minimum balance of $15,000 and above. The attractive benefits from this package include free ATM fee, repayment for charges incurred on other ATMs within the US, free MasterCard debit card, unrestricted use of checks for payments, and free checking services. All interest checking accounts are opened with zero balance, and there are no monthly maintenance charges.
Money Market Account: Similar to an online savings account, Ally Bank also offers Money Market account services that are more flexible and highly competitive with improved checking account functions such as ATM fee repayments, use of debit cards, and free checks. This hybrid account package requires no opening balance, and there are no monthly charges for account maintenance as well.
Ally Bank’s certificates of deposit (CD), including such financial instruments from IRA, span between three (3) months to five (5) years and are FDIC insured. Customers have an option to increase they’re earning rates or extend the duration of their CDs by upgrading with a one-time Raise Your Rate CD offer. The program functions with “No Penalty,” but rates are similar to an online savings account.
Current Market Situation
Ally Bank was registered as a full-fledged financial institution in 2004. It is also known as GMAC Automotive Bank. In 2008, GM and Chrysler suffered huge losses and declared bankruptcy, a situation which affected the bank’s financial performance. However, the bank’s financial standing leaped within the last decade. In May 2013, it paid off more than $6bn owed to the US government.
Ally Bank has over one million deposit accounts managed via its fast and reliable online banking system. The financial institution is America’s most significant car finance firm with several transactions completed. Ally Bank has over 6 million online savings account customers. It is also ranked among the top 20 US banks with the most robust and most reliable asset base.
Ally Bank’s SmartAuction online platform was launched in 2000 to provide a competitive point of convergence for buyers and sellers interested in car auctions. Over 5 million vehicles were sold in October 2018. In the same year, Ally Bank’s total assets, net income, and revenue skyrocketed to $178,869 billion, $1,263 billion, and $10,466 billion, respectively, through its total equity declined by few percentages to $13,268 billion.
Services
Ally Bank is focused on delivering quality banking services to its numerous customers. An analysis of how the bank keeps its promises is presented below:
Bank Rates
Ally Bank has one of the most attractive interest rate plans nationwide, especially when compared to other financial institutions rendering similar online banking services that cater to customers’ savings, checking, money market, CDs, and IRA needs.
Online Savings
The APY offered for Ally Bank’s savings account is highly competitive because there are no service fees, and customers need no deposits to own one. Interestingly, you can open more than one account or as many as needed, especially if you are saving for different objectives such as emergency, vacation, house, etc.
We found that the rates for Ally Bank are a member of FDIC. Its online savings account is consistently competitive at 2.2 APY for any balance you have in any of its accounts. The bank also offers 24/7 customer service. However, customers who exceed their maximum of 6 free withdrawals per month are charged $10 for each transfer.
Other services rendered under Ally Bank’s savings account are IRA, which offers the same interest rate; Traditional; Roth; and SEP IRAs.
Comparison with HSBC, CIT Bank, and Synchrony
HSBC: In contrast to the listed features of Ally Bank’s online savings account, HSBC Direct Savings offers 2.25% APY for your balance in all tiers, with a minimum $1 APY earnings. The bank does not charge monthly maintenance fees. HSBC is also an FDIC member.
CIT Bank: This financial institution offers 2.45% APY for its “Builder High-Yield” savings account.
Synchrony: Customers get a 2.25% APY for Synchrony’s “High-Yield” savings account, zero account opening balance, and are not required to pay maintenance fees. Synchrony is an FDIC member. Its competitive rates and guaranteed safety of depositors’ money make it one of the banks you can trust.
Interest Checking
Ally Bank operates two types of interest rates for checking accounts depending on a customer’s available balance. Though the rates are considered “very low,” you will find it attractive as an extra amount considering that competitors delivering such services offer zero interest.
Transactions are fast, easily accessible, and attract no fees for customers who use Allpoint ATMs found in over 50,000 locations across the country. Allpoint ATMs are also situated in popular stores such as Costco, CVS, Target, Speedway, and Walgreens, among others. Ally pays reimbursement valued at $10 per month for withdrawals from ATMs owned by other banks.
We found that Ally Bank is FDIC insured. Its customers gain 0.10% APY daily on account balances below $15,000 and 0.60% APY for accounts with more. The bank pays daily compounding interest. Besides, you will get an Ally Cash Back credit card, which allows bonus cashback services at convenience stores, supermarkets, and gas stations. If you choose to add your rewards to a valid Ally Bank account, you can get up to 10% extra.
Importantly, Ally Bank will issue a debit MasterCard within ten workdays after you open your checking account. To set up a PIN code and access online banking services, car owners must activate their cards using numbers provided on the attached activation sticker.
Some of the features on Ally’s checking account include:
- Free MasterCard (debit) with standard checks.
- Postage-paid deposit packets.
- Easy to make direct deposits.
- Can check your deposits from any location via Ally eCheck Deposit software by taking a picture.
- Making multiple and unlimited payments.
- Zero charges for online payments.
- Suitable for local and international bank transfers to bank accounts using Zelle services. This is done with a US phone number or email address.
- Funds transfer between different accounts services by All Bank. Transfers to and from other financial institutions are also allowed.
- Send and receive money safely from Microsoft Wallet, Apple Pay, Samsung Pay, Google Pay, and Masterpass, among others.
- Find and use account information for transfers via Amazon Alexa.
Money Market
As a hybrid account package, Ally Bank’s money market account functions with maximum flexibility. It combines the features of savings and checking account to provide easy access to depositors’ fund. Other benefits include free checks and a debit card. However, the APY offered in this package is lower than what you can get from the savings account.
We found that home financing services offered at Ally Bank include options for mortgage and refinancing. Fixed rates are available for long-term contracts lasting between 10 – 30 years.
However, you can get an adjustable-rate, which changes in value depending on prevailing rates in the money market.
Interestingly, the bank’s “Price Match Guarantee” ensures that you get lower charges if you find better rates from other competitors in the lending business. However, that rate must par with the loan amount and not dated beyond five working days.
Certificates of Deposit (CD)
Certificates of Deposit (CD) offered at Ally Bank are available in three options, but there are no minimum deposits.
High-Yield CD
This lasts between 3 months and five years with varied APYs depending on the amount registered as an account opening balance. Ally Bank has more attractive rates for short-term CDs; for instance, a 6 or 9-month CD can yield more interest compared to the savings account.
Raise Your Rate CD
Under this category of financial instruments, you can choose a CD term of 2 or 4 years, but the rate remains unchangeable for that duration. However, Ally Bank’s Raise Your Rate CD allows customers to increase their earning chances if rates improve during the 2-year or 4-year period.
No Penalty CD
This permits Ally Bank customers to withdraw their total balance, including accrued interest, at any given time without attracting penalties. However, this benefit stays valid only within the first six days of crediting such accounts. The fixed term for this CD lasts 11 months.
We found that Ally’s term CDs offer about 3.00% APY and daily compounding interest for up to 5 years and are FDIC insured.
Raise Your Rate CDs to go with 2.50% APY, with an opportunity to increase rate after 2 years or twice within four years. This, too, is FDIC insured with daily compounding interest.
Lastly, No Penalty CDs have the same FDIC status as Term CDs and Raise Your Rates CD, but less than $,000 deposit attracts only 1.80% APY whereas $5,000 minimum deposit gets you a 2.15% APY.
Similarly, opening deposits of $25,000 and above attract 2.30% APY. No maintenance fees are charged.
IRAs
Ally Bank offers three types of IRAs, such as:
- High-Yield IRA CDs which span between 3 months and 5 years
- IRA Raise Your Rate CDs spanning between 2 or 4 years
- Online IRA Savings
Tax benefits may accrue on IRA accounts, and customers are allowed to choose between Roth, Traditional and SEP IRAs. However, rates are lower when compared to the benefits available on brokerage IRA accounts with the bank. IRAs are, therefore, most suitable for people who desire stability, especially elderly people who do not wish to increase their investment risks.
Why Ally Bank is your best choice
Ally Bank won “Best Online Bank” in 2019 thanks to its continually improving consumer banking services which include:
Go to: Ally Bank’s website
Zero account opening deposit
You will hardly find banks in the US, where customers open $0 accounts. In many others, operating bank accounts attract outrageous monthly maintenance charges, and customers must keep a minimum operating balance. Thus, with Ally Bank, you can start saving and earning very little immediately. It is flexible, fast, and cost-effective banking services, however, requires you to fund your account within 30 days from the day of activation.
Accessible customer support professionals
Ally Bank offers 24/7 customer care service. The communication channels are either via live chat or phone call. This feature aims at eliminating the “human touch” problem arising from the bank’s web-based banking operations. Existing and potential customers can reach the bank through:
- +1 – 877 – 247 – 2559 (for those within the US)
- +1 – 757 – 247 – 2559 (for those outside the US)
- +1 – 877 – 320 – 2559 (for those with hearing problems).
Easy-to-use deposit checks
Customers who have needs for deposit checks can transfer it to their Ally savings account using a phone. You can do this by snapping and sending the document via your downloaded Ally Bank mobile app.
Appealing website
Ally Bank’s web interface is user-friendly, and one of the most attractive you can ever find on the internet. The bank’s transparent business approach is evident in its publication of existing rates on the website. This enables customers to make well-informed decisions and maximize the vast earning opportunities provided via different financial instruments and services.
Mobile App
Ally Bank mobile banking software enables easy access to financial services. The bank’s mobile app is also rated among the most responsive and easy-to-use for check deposits, fund transfers, bill payments, etc.
Further, with the Ally app, you can view your balance, transaction history, and nearby ATMs as well as add security controls to your debit card information.
The software program is free of charge and can be downloaded via Android or iOS.
All-in-one financial services
In 2016, Ally Bank bought TradeKing and later introduced Ally Invest, which serves as an online platform where customers can find online brokerage with industry-lowest fees. “Ally Invest” also provides access to Forex, mutual funds, ETFs, etc. Ally account owners are allowed to use this great online search tool at no cost. It is also considered most suitable for people with professional experience in online trading, although newbies can as well use the search tool without help.
Internet-based services
Ally Bank has no physical locations. However, the bank arguably has the highest number of ATMs across the US. Besides, its banking services are accessible 24/4, with live chats or phone communications that are more responsive than those offered by competitors offering in-person bank services. All transactions with Ally Bank are online, by phone, wire transfer, or via ATMs.
Lowest checking charges
Fees charged for checking are very low though rates have been on the rise lately. Ally Bank previously offered limitless reimbursements for charges accruing from withdrawals made on other banks’ ATMs. However, you will definitely appreciate the $10 flat rate and $25 fee for bank overdrafts.
What customers hate most
Despite the benefits of using Ally Bank’s services, a large number of savings account owners are dissatisfied with having no option for ATM cards. This is so because the bank made no provision for such benefits except for higher account tiers. This makes it impossible for a segment of bank customers to easily access their cash unless online transfers to other accounts, including check, phone, or wire transfers, which unavoidably take a couple of days.
Is your money safe with Ally Bank?
Because the safety of your funds should matter to all financial institutions, Ally Bank took a step forward to guarantee your safety. Its management considers the security of your deposits as its top priority, and, for this reason, Ally is certified by FDIC. This implies that the US government takes responsibility for your loss if the bank eventually defaults for any reason. Every dime in your bank account will be refunded with an FDIC exception for amounts totaling above $250,000 (Two Hundred and Fifty Thousand US Dollars Only).
Bank account owners can access their balance and other service options through Ally’s main website page. For your banking and investment transactions, visit Ally Invest on the web page options. If you need access to the more complex credit card portal, go to the “credit card login” page for a safe redirect.
What do you gain for safekeeping your money with Ally Bank?
Some of the benefits you get for banking your hard-earned money with Ally Bank include:
- Low fees: Ally Bank guarantees the lowest fees in the US banking industry mainly because it is an internet-based financial institution. This eliminates substantial overhead costs incurred by traditional banks that operate from physical locations. Ally, therefore, shares part of the gains with customers through lower fees for financial instruments, including zero monthly maintenance fees and account openings deposits.
- Ease of doing business: Owning an Ally account is effortless and fast because the process can be completed from the comfort of your home. This eliminates the time spent in the bank lobby, waiting to have conversations with busy bank officials who eventually demand lots of documents and personal ID for verification routines.
- Convenient: It is much easier to own an online bank, especially if you need to complete transactions during non-banking hours or on weekends. The convenience of owning an online account with Ally is best appreciated when you are in remote places within the US or outside the country because the bank app provides one of the most responsive services with full access to all service options.
- Automatic Teller Machines (ATMs): Ally Bank has over 50,000 ATMs within the US to ensure easy access to depositors’ money, especially those who own checking and money market accounts.
- APY: No other financial institution located in the US offers as much as 2.20% APY on the savings account. This makes Ally Bank a good option for those who want to gain maximum satisfaction from banking services.
What critics think about Ally Bank
Our investigations show that Ally Bank has few shortcomings, notwithstanding the vast advantages listed above. The weaknesses are as follows:
- The $10 flat rate charged on all outbound transfers per transaction—after a 6th one—is too high.
- There is no provision for those who wish to deposit physical cash. The risk increases for those with large amounts of money. In this case, the bank loses additional earnings to banks operating from physical locations.
- There are situations where a bank customer has problems that require face-to-face communication with bank officials. Though Ally Bank offers 24/7 customer care service, the phone prompts, and delays can be frustrating sometimes.
Final take
We love Ally, and it is one of the most reputable online banks with robust interest rate packages across the US.
The bank website and app are protected with firewalls and encryption against attacks from malware, anti-virus, and bots. Besides, access to online banking services come with a 2-step authentication option.
The bank has several physical offices in Sandy, Utah, and Michigan, Detroit, where you can visit for face-to-face interactions.
Customers have nothing to lose but everything to gain since there are no opening deposits or account maintenance fees.
Go to: Ally Bank’s website
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