Ally is one of our favorite banks. They offer consistently high rates, low fees, and solid products covering your banking and investing needs. They're online-only, which is a driver for their favorable rates and fees, but that can be a deterrent for customers who prefer to have the option of in-person support.
- No monthly fees
- Consistently competitive rates
- One-stop for banking, investing, and loan products
- Unlimited ATM reimbursements
- No physical locations
- Cannot deposit cash
- Many complaints about long check-clearing policies
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 re-brand to Ally Bank in 2009, the bank has expanded to serve more than 8 million customers and remains one of the country’s biggest car finance companies.
A major player in the online-only banking space, Ally has built its name on high-interest rates, 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 Interest Checking Account
Interest Checking is a mostly fee-free checking account that earns interest at a tiered rate depending on your balance.
If you have less than $15,000 in deposits, you can earn a 0.10% APY, while balances over $15,000 earn 0.25%.
There’s no initial minimum deposit requirement and you won’t pay any monthly maintenance fees.
Ally also waives fees on other actions that traditionally come with them, 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 over to Ally.
Ally Bank Online Savings Account
Online Savings is a no-fee, high-yield savings account (HYSA) that currently earns interest at 0.50% no matter what your total balance is.
The account comes with 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 ten 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 that add up over time with RoundUps and Surprise Savings.
RoundUps round every 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 that it then automatically transfers to your savings account.
Ally Bank Money Market Account
Ally’s Money Market option is similar to its Online Savings account, with a 0.50% interest rate for all tiers and no monthly fees.
The main difference is that a money market account comes with 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. The amount that you can earn in interest goes up the longer you commit your funds.
- 3-month term: 0.20%
- 6-month term: 0.25%
- 9-month term: 0.30%
- 12-month term: 0.60%
- 18-month term: 0.60%
- 3-year term: 0.65%
- 5-year term: 0.85%
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.
Raise Your Rate CD
Raise Your Rate CDs come with the option for two or four-year terms.
The main selling point here is that if Ally’s interest rate goes up during the course of your term, you have the opportunity to raise your rate — once for a two-year and twice for a four-year term.
Both term lengths currently start with an APY of 0.60% and there’s no initial deposit requirement.
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 of 0.50%. The only available term length is 11 months.
You won’t be able to touch your funds for 6 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 the same 0.50% 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).
Ally Bank Features
Below are some of the things that set Ally apart:
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 in place 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 make secure payments with Zelle.
Ally’s mobile banking app allows for everything you need for banking on the go. Aside from standard banking features, the app comes with intuitive savings tools, an ATM locater, 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 customers running iOs have better things to say than those on Android. The app holds a 4.7-star (out of 5) rating in the App Store but has just 3.8 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 you should look out for.
If you overdraft your account, you’ll get hit with a $25 fee up to once per day (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.
If your balance is below $100, the transfer won’t take place and you’ll be stuck with a fee.
Returned Deposit Item
If you deposit a check that ends up bouncing, you’ll be charged $7.50 per item. The same fee also applies to other deposits or transfers that aren’t covered by the institution that it’s coming from.
For most people, this is not going to be an issue.
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 amount of the fee 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’ll be limited to six transactions per month. If you go over that amount, expect to pay a $10 fee.
Note: This is a federally mandated limit and applies to transfers, debit card transactions, and purchases.
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
Ally isn’t currently running any bank promotions for opening a new deposit account, but it has in the past, so keep an eye out as sign-up bonuses tend to come and go.
That said, if you’re interested in investing, the company is currently offering a bonus of up to $3,500 for new Ally Invest account-holders:
- $10,000 to $24,999 deposit: $50 Bonus
- $25,000 to $99,999 deposit: $200 Bonus
- $100,000 to $249,999 deposit: $300 Bonus
- $250,000 to $299,999 deposit: $600 Bonus
- $500,000 to $999,999 deposit: $1,200 Bonus
- $1,000,000 to $1,999,999 deposit: $2,500 Bonus
- $2,000,000 or more deposit: $3,500 Bonus
Security is the top priority of any bank living in the digital space, and Ally is no different.
Ally’s online security approach consists of anti-virus protection, firewalls to block unauthorized access, Transport Layer Security (TLS) encryption, and a two-step authentication process.
There’s also an online and mobile security guarantee that protects you against any liability if your account is compromised. And, of course, Ally Bank is FDIC-insured.
When you need some help, Ally has an online and mobile chat platform and phone support available 24/7. You can also check out the website for a wide variety of helpful FAQs or send a secure email with your questions.
Even with plenty of support options in place, not everyone is thrilled with the customer service level that Ally provides.
The bank currently holds a rating of just 2.4 stars (out of 5) on TrustPilot, (although many of those complaints seem to be about Ally’s trading platform and loan offerings).
Pros & Cons
Let’s go ahead and summarize where Ally Bank shines and where they fall short:
- No monthly fees
- Top APYs across all accounts
- Unlimited ATM reimbursements
- No physical locations
- Cannot deposit cash
Alternatives to Ally Bank
Ally might be the most well-known of the online-only banks, but there are plenty of options out there that also deserve your consideration.
If you are considering going with an online-only bank, you might also want to check out:
…just to name a few.
Frequently Asked Questions
Is Ally a safe bank?
Yes. Ally is FDIC-insured, so your funds are protected. Ally is also one of the largest banks in the United States.
Online banking might seem risky if you’re new to it, but with an emphasis on online security and a customer-driven approach, you’ll be in good hands with Ally.
Who is Ally Bank owned by?
Ally Bank is a subsidiary of Ally Financial, a Detroit-based financial institution. Ally Financial ($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. Capital One is also one of the nation’s leading credit card suppliers, while Ally doesn’t offer any.
Which bank is better depends on you — identify what you need from a bank, and figure out 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 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 the world of 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 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.