Ally Bank Review: You’ll Save Big by Banking With Ally

ally-banking-review

Are you ready to move your banking online?

If so, Ally Bank is there for you. Ally is an online-only bank with one of the highest-yield savings accounts on the market.

Read on to learn about online banking in this full Ally bank review. Plus, you’ll find instructions on how to set up an Ally savings or checking account, step by step.

Bank with ally

Ally Bank review: just the essentials

Ally Bank offers many of the same products as a traditional brick-and-mortar bank, but without physical bank branches. You can open an account and make unlimited deposits via eCheck. You can also take out cash fee-free at any of the 43,000 Allpoint ATMs across the country.

Because Ally doesn’t have as many overhead and administrative expenses as a traditional brick-and-mortar bank, it can offer high annual percentage yields (APY) on its savings accounts. Whatever your balance, you’ll get a 1.00% APY in an Ally savings account. If you had $5,000 in savings, you’d make about $50 in interest after a year. Compared to Bank of America’s 0.01% APY, Ally allows your savings to grow at a much higher rate.

Apart from cash withdrawal at an ATM, you’ll conduct every transaction online or over the phone. Ally has innovative and easy-to-use banking platforms on the web, a tablet, or via mobile app on your iPhone or Android.

Checking your balance is as simple as opening up the app on your phone. If you run into any issues, you can call customer service any time of the day or night. While most banks stick to traditional business hours, Ally offers support on a 24/7 basis.

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Image credit: Ally Financial, Inc.

Ally Bank products

Ally Bank offers a number of financial products, but its offerings aren’t as extensive as major banks such as Bank of America or Chase. For instance, it doesn’t have 401(ks) or college savings plans. However, Ally does offer common products such as bank accounts, CDs, and auto loans, among others.

Checking accounts

Ally’s checking accounts have no minimum balance or monthly maintenance fees. You’ll receive a debit card and standard checks. You can take out cash from an Allpoint ATM for no fee and there are no limits to how many withdrawals you make. Need to use an out-of-network ATM? Ally will also reimburse any ATM fees for up to $10 per statement cycle.

You’ll deposit checks by uploading a photo of your check on the mobile app or website. You can also send money to someone using PopMoney, Ally’s user-friendly money transfer service.  

If your daily balance is lower than $15,000, you’ll get a 0.10% APY. With a balance of $15,000 or greater, you’ll earn a 0.60% APY.

Savings accounts

As mentioned above, Ally savings accounts have a competitive APY of 1.00% at any balance tier.

Your FDIC-protected savings account has no monthly maintenance fee. You can make unlimited deposits, but there’s a limit of six additional transactions per statement cycle.

Unlike an Ally checking account, an Ally savings account doesn’t come with checks or a debit card.

Money Market accounts

Money market accounts are Ally’s third option for a bank account.

In a money market account, you’ll earn an APY of 0.85%, regardless of your account balance. You’ll also get checks and a debit card. However, you won’t get the free online bill pay service that comes with a checking account.

Money market accounts are most useful to customers with a daily balance lower than $15,000. They give you the high interest rate of a savings account but the check and debit card options of a checking account.

Certificates of deposit (CD)

A CD is a timed deposit with a fixed yield. The longer you agree to leave your deposit in the account, the higher your yield will be. If you try to withdraw your deposit early, you’ll have to pay a penalty.

With Ally Bank, you can purchase a CD for a term as short as three months or as long as five years. Your APY will vary depending on the term you select.

As of this writing, an 18-month term CD would get you 1.20% APY on $5,000. If your balance is greater than $5,000, your APY increases to 1.25%. If your balance exceeds $25,000, you’ll earn a 1.35% APY.

You can also open an independent retirement account (IRA) CD. These FDIC-insured IRA CDs are available for Roth, Traditional, or SEP IRAs.

IRAs

If you’re interested in saving for retirement, open an IRA Online Savings Account with Ally. Ally IRAs are available for Roth, Traditional, or SEP accounts. They all have an APY of 1.00%, which is on the low end compared to other banks.

Ally CashBack Credit Card

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Image credit: Ally Financial, Inc.

Ally offers a cash back credit card with no annual fee. You’ll get two percent cash back at gas stations and grocery stores and one percent cash back on all other purchases. If you spend $500 in the first few months, you’ll earn a $100 bonus. Since it’s a Visa, you can use the Ally card pretty much anywhere.

By no means are you obligated to open an Ally card as the bank’s customer. You may qualify for other cash back credits card with even more lucrative rewards programs.

Vehicle financing and protection

Ally was originally an auto financing company, and it continues to offer car loans and protection plans today. Whether you want to buy or lease a vehicle, you can browse flexible financing offers or find a protection product that includes basic or full vehicle coverage.

Home loans and refinancing

Finally, you can take out or refinance a home mortgage through Ally Bank. The bank offers a number of terms; Ally’s 30-year plans, for instance, have interest rates between 4.25% and 4.326%. Already have a mortgage? You can refinance an existing mortgage to lower your monthly payments and pay the loan off faster.

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Using the Ally online platform

Because Ally is an online-only bank, all of your banking transactions will primarily happen online. Head to the Ally Bank website to create an account. With some basic information, you can create your account in 10 minutes.

First, indicate whether or not you’re a new customer.

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Select the Ally banking product you want to open.

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Then, indicate whether you’re applying for an individual or joint account.

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And finally, enter basic information such as your name, phone number, address, and Social Security number.

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Once you’ve created an account, you can start to make deposits. You’ll receive a debit card and checks within 10 days of account opening, if applicable.

Using the Ally mobile app

To access mobile banking, download the free Ally app on your phone. With the app, you can make deposits, initiate transfers, or simply check the balance in your accounts.

To deposit a check, you just need to snap a picture. To send money to someone else, enter their email or phone number to get started with Ally’s PopMoney.

The Ally app also has an optional splurge alert that tracks where you spend the most. If you’re nearing a high-spend store, the app will warn you to watch your budget and help you keep your spending impulse in check.

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Image credit: Ally Financial, Inc.

Eligibility requirements and fees

There are no monthly maintenance fees or deposit minimums with Ally Bank. In fact, you can open an account before depositing any money into it. There are also no fees for transfers or incoming wires, and you can make unlimited deposits.

However, there is a $20 fee for outgoing wires and a $25 fee for overdraft items. Ally is transparent about its various fee structures on each of its banking products, however, so it’s easy to avoid charges if you’re careful.

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Pros and cons of banking with Ally

So what are the advantages and drawbacks of Ally banking?

Pros

  • Relatively high yields for checking, savings, and money market accounts
  • $0 account minimum and no monthly maintenance fees
  • Easy-to-use website and mobile app
  • Transparent fee structure
  • Over 43,000 fee-free ATMs and $10 reimbursement for other ATM fees
  • Simple and fee transfers to external accounts
  • 24/7 customer support

Cons

  • No in-person banking
  • Limited number of financial products
  • Can’t deposit cash into your accounts
  • Not much financial advising for complex situations

History of Ally

Today, Ally Bank is a leader in the innovative online and mobile banking space, but the company actually started 100 years ago to provide financing to car dealers. Ally was previously GMAC and a division of GM.

During World War II, GMAC moved beyond cars to work with railroad companies, household appliance dealers, and customers. At the time, their slogan was “Enjoy financing where you buy.”

In the 1970s, GMAC expanded into the auto insurance domain. In the 80s and 90s, it purchased the Bank of New York’s lending unit, marking its move into lending for equity sponsors and middle-market companies.

It wasn’t until 2009 that GMAC Bank turned into Ally Bank. Ally focuses on using online banking to create better value for customers. Plus, it’s dedicated to extraordinary, around-the-clock customer support.

Ally Bank contact information

Beyond this Ally Bank review, find more information online or through Ally customer service. You can contact Ally Bank by phone, email, chat, or mail.

Phone: 1-877-247-2559

Email: Log into your account to send a secure message.

Chat: Head to the Ally Bank website to chat.

If you don’t want to use eCheck deposit, you can send deposits and endorsed checks (but not cash) to the following address:

Ally Bank
P.O. Box 13625
Philadelphia, PA 19101

You can also like Ally Bank on Facebook or follow them on Twitter at the handle @Ally. Learn more about the company @AllyFinancial or follow Ally customer service @AllyCare.

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