Ally Bank Review: The Pros and Cons
What makes this financial institution stand out?
Ally Bank made a splash in the online banking world in 2009, but does it continue to deserve a glowing review? Formerly doing business as GMAC Bank, the company rebranded as Ally Bank in 2010 with a promise to offer better service and higher interest rates to customers.
The bank has several product offerings including savings accounts, CDs, and checking products with competitive rates. Because its online presence reduces overhead, Ally is positioned to offer more attractive rates and products than some other banks.
Overview of Ally Bank
The main attraction at Ally Bank is the APY it pays on deposit products, including checking accounts, savings accounts, money market accounts and Certificates of Deposit (CD). For up-to-date rates, visit the Ally Bank website, as rates change often.
Ally Bank will check your credit, even though you may not intend to borrow. It wants to verify your identity and try to predict if you’ll use your overdraft protection plans responsibly. If you don't have good credit or have a rocky financial history, this prospect may cause you some anxiety.
Ally Bank offers an interest checking account that allows you to earn money while keeping it liquid. The interest checking account does not have a limit on withdrawals from the account, but other accounts do. If you're unfamiliar with interest checking, learn the basics.
You’ll get free checks from Ally Bank, and you can reorder basic checks at no cost. This distinguishes it from other financial institutions which charge customers for check reorders. Also, there is no minimum deposit and no monthly fee at Ally Bank, making it even more attractive. Online bill pay is free, and you’ll get a debit card for ATM withdrawals and purchases.
Ally offers decent rates on CD accounts and a variety of options. It has a "no penalty" CD that allows you to take money out early without paying fees. Its high yield CD pays more but has traditional CD penalties if you cash out before maturity. Learn more about CD investments, if you need a crash course in the basics.
Ally also offers savings accounts and money market accounts. The main difference is that the money market account includes a debit card. Keep in mind that, by law, you can only make six withdrawals as electronic transfers or purchases per month from these savings accounts.
If your main goal is to earn interest, use a savings account. You'll have less access to cash, but the APY is highest. The money market account pays less than savings, but it's easier to get funds out if you need to do so: You'll have a debit card that you can use several times per month (no more than six). Finally, the interest checking account allows you to spend more or less freely and pay bills online.
Pros and Cons
When Ally Bank started operations, its advertising campaign was controversial. Its goal seemed to be criticizing other banks and setting itself apart as a friendlier, different kind of bank. It also used TV ads that disturbed some viewers. Ultimately, this bank makes money the same way as other banks.
Ally Bank does keep fees relatively low. There are no monthly account fees, although certain transactions can cause fees. The bank used to skip the ATM fees for withdrawals and would refund any fees charged by other banks' ATMs at the end of each month. However, it no longer offers unlimited reimbursement of ATM fees. Now the bank reimburses a maximum of $10 per billing cycle.
Ally Bank is popular because you can set up unlimited ACH links with up to 20 other bank accounts. Some online banks limit you to three or so.
Finally, Ally Bank offers 24/7 customer service on the phone and via chat. The customer service representatives get mixed reviews, but if you like talking to a real person you may find Ally Bank attractive.
The Balance offers a comprehensive comparison of the best savings account interest rates. We teamed up with Bankrate to survey approximately 4,800 banks and credit unions nationwide. Depending on how much money you’re looking to deposit, this list will show you some of the best options available today. All of the banks and credit unions listed are insured by the FDIC or NCUA.