Ally Bank is an online-only bank offering competitive deposit accounts and other financial services. Ally’s roots go back to 1919 when it started out as GMAC, the finance arm of automaker GM. The bank rebranded in 2009 as Ally Bank, a straight-talking online bank. This in-depth review of the online banking giant can help you decide if its deposit accounts are right for you.
- Pros and Cons
- Company Overview
Relatively high rates on savings accounts and CDs
No minimum opening balance requirements or monthly fees
Access to over 43,000 Allpoint ATMs in the U.S.
No way to deposit cash directly into your Ally Bank account
No brick-and-mortar locations
- Official Website www.ally.com
- Bank Product Offerings Savings account, checking account, money market account, CDs
- Customer Service Phone, online chat, secure messaging available 24/7
- Year Founded 1919
Who Is Ally Bank Best For?
Ally Bank should appeal to most consumers looking for a solid online bank account. It may be a particularly good fit for customers who want to:
- Earn a competitive return on savings
- Open a savings account with no minimum balance requirement
- Open a checking account that comes with a debit card and no monthly maintenance fees
- Earn more on their cash with CDs that require no minimum deposit
- Bank with an established, well-known online bank
What Does Ally Bank Offer?
Ally Bank offers a broad lineup of financial services. You can open a variety of bank accounts for everyday use and longer-term savings.
Learn more about each type of account Ally offers below.
Online Savings Account
Ally’s Online Savings Account pays a relatively high annual percentage yield (APY) on deposits. (APY is a reflection of the compounded interest rate based on the frequency of compounding.) It has these other features:
- As of Aug. 17, 2020, earn 0.80 % APY, regardless of your account balance.
- There's no minimum initial deposit or ongoing minimum balance required.
- Fund your account by transferring money from another account, mailing checks for deposit, wiring funds, or making a mobile check deposit.
- There are no monthly fees.
To withdraw from your savings, you can transfer funds to another Ally Bank account or a linked account from a different bank. You can also request a check or an outgoing wire. The Online Savings Account does not include an ATM card, but you can open a Money Market Account or Interest Checking Account if you’d like to have easier access to your cash.
Money Market Account
This account is a hybrid of checking and savings accounts: You earn interest, but you can spend your money instantly.
- As of Aug. 17, 2020, earn 0.50% APY, regardless of balance.
- Get a debit card and free checks for spending your money.
- Pay no monthly maintenance fees.
- Enjoy the same ATM access as the Ally Checking Account (see below).
Certain withdrawals from the Money Market Account are limited to six per month, due to federal regulations. You can withdraw cash as often as you want at an ATM, but payments and transfers out of your account count toward the limit.
The Ally Money Market Account pays more than most megabanks, but it’s not a leader among online banks. To find more comparisons, check out our list of the top money market rates.
Even Ally’s savings account rate is higher than its money market rate, so it could make sense to keep cash in savings and move it to your checking account or the money market when you plan to spend.
Ally’s Interest Checking Account is free and pays a modest return on your cash.
- Earn 0.10% on balances of less than $15,000.
- Earn 0.50% on balances of $15,000 or more.
- Pay no monthly maintenance fees.
- Send instant and secure payments to friends and family with Zelle.
- Deposit checks to your account with the mobile app.
This is an excellent option for everyday spending. You earn interest on your account balance, you can easily pay bills online, and you get a debit card for cash withdrawals and everyday spending.
Ally’s ATM setup is decent, too. You can withdraw cash at any Allpoint ATM for free. (Allpoint ATMs are located at convenience stores, restaurants, and financial institutions.) And you can receive up to $10 per statement cycle in ATM fee rebate charges from other U.S. ATMs. Ally Bank does not charge you an ATM fee for using non-network ATMs, but the ATM operator may impose a fee. And Ally does charge you a 1% foreign transaction fee when you get cash outside of the U.S.
You can use the Ally website to find Allpoint ATMs near you.
But remember that there are no Ally branches, so you may need to plan for occasional transactions that require a money order. You can buy those at other locations such as the post office or a grocery store. And if you value face-to-face service, you’re better off looking elsewhere.
Certificates of Deposit
High Yield CDs
Ally has a variety of CDs, including what it calls High-Yield CDs. They are traditional CDs that require you to commit to leaving funds with the bank for a specific length of time. As a result, they may pay higher rates at issue than some of the more flexible options we discuss below. The rate stays the same, for better or worse, until maturity, and there is no minimum deposit required to get started. That’s somewhat unusual for CDs—many of which have a minimum of at least $500—and makes these CDs a great option for anyone who just has a small amount to invest.
|Ally Bank High-Yield CD Rates as of August 17, 2020|
If you cash out of a High-Yield CD early, Ally may withdraw a penalty from your proceeds.
Raise Your Rate CDs
Ally Raise Your Rate CDs have rates that can potentially go up, preventing a situation where you get stuck with a low CD rate for several years. If Ally raises rates on the product you own, you can log in and ask for your rate to increase. With a 2-year CD, you have one opportunity during the term to request an increase. With 4-year CDs, you have two opportunities.
The ability to switch to a higher rate is somewhat rare. Although there may be a few similar products out there, Ally Bank’s Raise Your Rate CD is among the best. As of August 17, 2020, the APY for both 2-year and 4-year Raise Your Rate CDs is 0.90%, and there is no minimum deposit required.
No Penalty CDs
Ally No Penalty CDs are liquid CDs that address the primary drawback of using a CD: Most require you to commit to leaving your money in the account for a set amount of time. But life brings surprises, and you may need to cash out early. You might even want to cash out to take advantage of higher interest rates on newly available CDs.
Liquid CDs allow you to withdraw funds before a CD matures without penalty, but there’s a tradeoff. You typically earn lower rates at issue with these CDs because you have the flexibility to cash out early. For example, compare the standard 1-year CD rate to the No Penalty rates below, and you can see how much that flexibility costs.
No Penalty CDs at Ally Bank are 11-month CDs, but you can withdraw 100% of your money after the first six days. As of Aug. 17, 2020, you can earn:
- 0.75% on deposits of any amount
Other Financial Products From Ally Bank
Liquid CDs are not widespread, but they’re more common than CDs that allow you to raise your rate. Ally Bank is competitive with other offerings, but it’s always good to shop around. The best choice might depend on how much you have to invest and what other products you want from a bank, if any.
Ally Bank offers a robust range of offerings besides bank accounts:
- Auto loans
- Home purchase loans
- Mortgage refinance loans
- Self-directed investment accounts
- Managed investment portfolios
Ally Bank’s Customer Service
Ally Bank earns high marks for customer service, taking second place in the 2019 J.D. Power 2019 Direct Banking Satisfaction Study. Customers particularly like Ally’s account opening experience, as well as the products and fee structure.
What’s more, Ally Bank offers phone support 24/7, and you can see your estimated wait time before calling (so you can decide if it’s the right time to call or not). If you prefer typing, you can chat with customer service representatives 24/7. Customers logged in online or using the Ally Bank app can send secure messages and chat about account-specific issues.
Open an Account With Ally Bank
Benefits In our review, we found that Ally Bank is a solid option for anybody that wants free online banking. Interest rates aren’t always the highest. But Ally Bank is competitive, so you can earn a decent return without putting effort into chasing rates and switching accounts frequently. With 24/7 customer service and a well-designed site that explains almost everything, you know what to expect with Ally Bank (or you can get the answer easily).
Drawbacks The main weak point is the money market account, which pays less than Ally’s savings account and less than other banks’ money markets. If you need a high money market rate, it may make sense to look elsewhere. Alternatively, you can keep the bulk of your money in Ally’s savings account or a liquid CD—and transfer money to checking or the money market when you need it.
Ally Bank. "History of Ally." Accessed Feb. 13, 2020.
Ally Bank. "Online Savings Account." Accessed Aug. 17, 2020.
Ally Bank. "Money Market Account." Accessed Aug. 17, 2020.
Ally Bank. "Interest Checking Account." Accessed Aug. 17, 2020.
Ally Bank. "Help Center." Accessed Feb. 13, 2020.
Ally Bank. "Raise Your Rate Certificate of Deposit (CD)." Accessed Aug. 17, 2020.
Ally Bank. "No Penalty Certificate of Deposit (CD)." Accessed Aug. 17, 2020.
J.D. Power. "In Direct Bank Gold Rush, Top Performers Find Different Paths to Success, J.D. Power Finds." Accessed Aug. 17, 2020.
Ally Bank. "Ally Bank Help Center: Opening an Account FAQs." Accessed Aug. 17, 2020.