Ally Bank is the consumer banking division of Ally Financial, a Detroit-based company that ranks among the largest financial institutions in the US.
Ally was founded in the early 20th century by General Motors to provide financing to automotive customers.
It was originally called the General Motors Acceptance Corporation (GMAC). Since its rebrand to Ally Bank in 2009, it has expanded to serve more than 11 million customers and remains one of the country’s largest car finance companies.
A major player in the online-only banking space, Ally has built its name on high APYs, a low fee schedule, an investment platform, and personal loans.
Here, you’ll get a crash course in everything that Ally has to offer, from its most popular products to how to get started with a new account.
Ally Bank Products
When it comes to Ally bank accounts, Annual Percentage Yield (APY) is the name of the game.
Every single Ally account has interest-earning potential at a much higher rate than what you can find at most traditional banks.
Here is a look at Ally’s most popular account types.
Ally Bank Spending Account
The Ally Bank Spending Account is a mostly fee-free checking account that earns interest at a tiered rate, depending on your balance.
If you have a balance of $15,000 or more, you’ll earn up to 0.25% APY. Otherwise, you’ll earn a much lower rate of 0.10%.
There’s no initial minimum deposit requirement, and you won’t pay any monthly maintenance fees.
Ally also doesn’t charge fees on other actions that most banks do, like ACH transfers, statement copies, incoming wires, and cashier’s checks.
The biggest downside of the account is that without ATMs or physical branches, you can’t deposit cash. This is a common drawback of online banking.
To ultimately get cash deposits into your account, you must deposit it to a separate account and transfer it to Ally.
Ally Bank Online Savings Account
Online Savings is a no-fee, high-yield savings account (HYSA) that currently earns interest at 4.25% APY no matter your balance.
The account has a modern digital platform that helps you develop positive personal finance habits. Using boosters, you can easily customize recurring transfers from your checking account to “boost” your savings account.
With buckets, you can break your savings balance into as many as 30 different sections to keep track of where you want to allocate your funds. Your entire balance still earns interest at the same rate. Think of buckets as a way to organize your savings account.
Ally also helps to make small additions to your savings over time with RoundUps and Surprise Savings.
RoundUps rounds up your debit card transaction to the nearest dollar and drops the remainder in your savings.
Surprise Savings analyzes your checking balance and spending habits to identify safe-to-save money and automatically transfers the funds to your savings account.
Ally Bank Money Market Account
Ally’s Money Market option is similar to its Online Savings account, with a 4.40% interest rate for all tiers and no monthly fees.
The main difference is that a money market account has more flexibility.
For example, account holders get a debit card and access to unlimited fee-free withdrawals at Allpoint® ATMs.
Ally Bank Certificates of Deposit (CDs)
Ally has three different options for CDs. Each one earns interest at a highly competitive rate with no maintenance fee.
Here’s the breakdown of the differences between the three types of CDs.
High Yield CD
High-yield CDs offer term lengths ranging from three months to five years. Ally offers different APYs on its various terms ranging from 3 months to 5 years.
There is no minimum balance requirement with a high-yield CD, and if you decide to renew your CD once it matures, you’ll get a 0.05% APY boost as a loyalty reward.
|3 Month High Yield CD||3.00% APY||$0|
|6 Month High Yield CD||5.00% APY||$0|
|9 Month High Yield CD||5.05% APY||$0|
|1 Year High Yield CD||5.10% APY||$0|
|18 Month High Yield CD||5.15% APY||$0|
|3 Year High Yield CD||4.25% APY||$0|
|5 Year High Yield CD||4.10% APY||$0|
Raise Your Rate CD
Raise Your Rate CDs come with the option for two or four-year terms.
With these CDs, if Ally’s interest rate increases during your term, you have the opportunity to raise your rate — once for a two-year and twice for a four-year term.
Similar to the high-yield CDs from Ally, there’s no initial deposit requirement.
|2 Year Raise Your Rate CD||4.00% APY||$0|
|4 Year Raise Your Rate CD||4.00% APY||$0|
No Penalty CD
A No Penalty CD gives you the option for early withdrawal without penalty if you need access to your funds before your account matures.
The trade-off for the added flexibility is a slightly lower APY. The only available term length is 11 months.
You won’t be able to touch your funds for six days after funding your account. After that, you can withdraw your full balance without worrying about getting hit with fees.
Seeing that Ally’s Online Savings and Money Market accounts both offer a similar APY, the only potential benefit to a No Penalty CD is that you might be less tempted to withdraw the money (and more likely to save it).
|11 Month No-Penalty CD||4.55% APY||$0|
Ally Bank Features
Below are some of the features you can enjoy when using Ally Bank.
Digital Banking Tools
As a bank operating entirely online, Ally embraces technology in every aspect of its platform. Whether you bank on your phone, tablet, or even a smartwatch, Ally has the tools to help you do it.
Without traditional brick-and-mortar locations, Ally allows you to handle your entire banking experience online. You can make eCheck deposits, transfer funds between accounts, and secure transfers with Zelle.
Ally’s mobile banking app allows everything you need for banking on the go. Aside from standard banking features, the app comes with intuitive savings tools, an ATM locator, and a built-in voice-enabled banking expert called Ally Assist that can help you find answers to account questions.
Current users are generally happy with the app’s functionality, but iOS customers have better things to say than Android customers. The app holds a 4.7-star (out of 5) rating in the App Store but has just 3.4 stars (out of 5) in the Google Play Store.
Ally doesn’t have any of its own ATMs, but it does partner with the Allpoint® network and its 43,000 ATM locations for fee-free access to cash.
On top of that, Ally reimburses customers up to $10 per statement cycle for any out-of-network ATM fees.
Ally Bank Fees
Ally’s fee schedule is much more customer-friendly than those of most traditional brick-and-mortar banks, but it doesn’t mean that it’s completely fee-free.
Ally accounts don’t have monthly service fees or account balance requirements, but there are still some potential fees that you might run into.
The good news is that Ally is upfront about them. Here’s what to expect.
Ally removed overdraft fees for all their accounts in 2021 (most banks will charge overdrafts up to four times per day).
Ally Bank offers overdraft protection with the optional Overdraft Transfer Service, which takes funds from your savings account to cover the difference. You need a savings balance of at least $100 to initiate the transfer.
Next, they offer their CoverDraft℠ service, which provides up to $250 in temporary relief, should you need it. Just bring your account back to a positive balance within 14 days to avoid a freeze. This service isn’t a line of credit or guarantee, so any purchase that isn’t covered will be declined (fee-free).
Outgoing Domestic Wire Transfer
Incoming wires, both domestic and international, are free. However, outgoing wires within the Federal Reserve Wire Network cost $20.
Early Withdrawal Penalties
Unless you have a No Penalty CD, you most likely have to pay an early withdrawal fee if you remove funds before the CD matures.
The fee amount depends on how long your term is and how much you have in the account.
- 24 months or less: 60 days of interest
- 25 to 36 months: 90 days of interest
- 37 to 48 months: 120 days of interest
- 49 months or longer: 150 days of interest
With an Online Savings or Money Market account, you are limited to ten transactions per month. If you exceed the transaction limit, you won’t pay a fee, but they may close your account.
Signing up with Ally is very simple. Head over to the website, choose the account that you want, and select Open Account.
From there, enter your personal information, select the terms and your preferred funding option, and you’re good to go. You can also apply over the phone or by mail.
There are no initial deposit requirements with Ally, and you can fund your new account through an online transfer, eCheck deposit, wire transfer, or a mailed check. Ally doesn’t allow for cash or credit card funding.
Ally Bank Promotions
Unfortunately, there are currently no active Ally Bank promotions. Check out these bonus offers instead:
|U.S. Bank U.S. Bank Smartly® Checking||up to $800||December 29, 2023||
|Citi® Citi Priority Relationship Tier||up to $2000||January 9, 2024||
|KeyBank Personal Checking Account||$200||December 8, 2023||
Security is the top priority of any bank living in the digital space, and Ally is no different.
Ally’s online security approach includes anti-virus protection, firewalls to block unauthorized access, Transport Layer Security (TLS) encryption, and a two-step authentication process.
There’s also an online and mobile security guarantee that protects you against any liability if your account is compromised. And, of course, Ally Bank is FDIC-insured.
When you need help, Ally has an online and mobile chat platform and phone support available 24/7. You can also visit the website for helpful FAQs or send a secure email with your questions.
Even with plenty of support options in place, not everyone is thrilled with the customer service level that Ally provides.
The bank currently holds a rating of just 1.2 stars (out of 5) on TrustPilot (although many of those complaints seem to be about Ally’s trading platform and loan offerings).
Here is what some customers are saying about Ally Bank:
Ally, is an excellent customer experience with no kickbacks or hidden fees, has also helped my credit score, I will recommend Ally Services to Family and Friends, Thank you.
Loretta Kimble Google Play Store
They changed something in their database which doesn't handle certain characters in your username. Which then doesn't recognize your own username. The app wouldn't let me change my login information in the phone app and you can't click the submit button. Really frustrating. Plus bill pay isn't working phone/online. Update/fix: Had to reinstall the app after resetting my username and password (both w/o special characters). Fixed log-in and bill pay. Thank you Ally support agent Codie.
Corey Vincent Google Play Store
Never had any issues with the bank app until about a month ago. An important feature called, Manage debit card, suddenly disappeared. Now I can't lock my card in case of an emergency and approve transactions etc. Please look into this and have it fixed in a near update.
Red Rum Google Play Store
Pros & Cons
Here’s where Ally Bank shines and falls short.
- No monthly fees
- Top APYs across all accounts
- Unique savings account options with savings buckets
- No physical locations
- Cannot deposit cash
Alternatives to Ally Bank
Ally might be the most well-known of the online-only banks, but there are plenty of options out there that also deserve your consideration.
If you are considering going with an online-only bank, you might also want to check out:
Frequently Asked Questions
Is Ally a safe bank?
Yes. Ally is FDIC-insured, so your funds are protected. Ally is also one of the largest banks in the United States.
Online banking might seem risky if you’re new to it, but with an emphasis on online security and a customer-driven approach, you’ll be in good hands with Ally.
Who is Ally Bank owned by?
Ally Bank is a subsidiary of Ally Financial, a Detroit-based financial institution. Ally Financial ($ALLY) is publicly traded and has over 100 years of experience under its belt.
Is Ally better than Capital One?
It depends on your needs. Ally and Capital One have a few things in common. Both banks offer high-yield savings options and high-end digital banking tools.
The main difference is that while Ally is entirely online, Capital One operates as a hybrid bank with a robust online platform and physical branches.
Which bank is better depends on you — identify what you need from a bank and determine which one will best meet your criteria.
Is Ally the best online bank?
It’s undoubtedly the most popular one. Ally is by far the biggest online-only bank in the US in terms of total assets.
That said, there are lesser-known online banks that provide many of the same things that Ally does. Biggest doesn’t always mean best, and other online banks are worth looking into.
Is Ally Bank Right For You?
If you’re already familiar with online banking, there’s a good chance that Ally is one of the first names that comes to mind.
It’s the biggest online-only bank, and in many ways, it has set the benchmark for the entire industry.
Overall, there’s plenty to like: Low fees, high-interest rates, a slick online platform, and a lean selection of account offerings.
The downsides with Ally are the same as you’d find with almost any online bank (e.g., no in-person support, no cash deposits).
Now that you know what to expect from Ally, the choice should be clearer. Here’s to finding the best online bank that suits your unique banking needs.