Ally Bank is a popular online-only bank that offers quick and easy financial solutions to a variety of customers. Ally started as GMAC Bank, the financing institution for General Motors Corp back in 1919. GMAC was rebranded in 2009 to become Ally Bank. With no physical locations, Ally can offer customers higher interest rates, making them an appealing option to customers used to online banking. Customers comfortable with texting, email, and chat will find Ally’s customer service very responsive. Ally is a good fit if customers want to open a free savings or checking account online. With no minimum balances required, it’s easy to see why Ally is so well-known.
Ally Bank at a glance
- High interest rates
- Friendly customer service
- No minimum balances or monthly fees
- No physical locations
- Withdrawals can take 2–3 days
- No way to deposit cash
What’s interesting about Ally Bank
Because Ally Bank has no physical locations, it can offer customers better products than a traditional bank. Ally charges no monthly maintenance fees on its accounts, and customers don’t have to maintain a minimum balance in their checking and savings accounts. Consumers will also find that customer service is flexible with multiple channels for communication, such as text, email and online chat.
People also choose Ally as their bank because it has competitive interest rates. Interest rates for certificates of deposit, checking, savings and money market accounts are typically higher than what physical bank branches have to offer. Furthermore, Ally is FDIC-insured for up to $250,000 for each depositor/account holder.
Things to consider
A drawback with online-only banks is there’s no way to make deposits in person. This may be a concern for customers accustomed to walking into physical branches or pulling up to drive-through ATMs to complete their banking transactions. Without branches, customers also cannot stop in to speak with someone face-to-face about their account. Another concern with online-only banking is cybercriminals. Customers may not feel comfortable providing their driver’s license and Social Security number online. While this is initially only done when first opening an account, it can be a red flag for anyone worried about security threats or a potential online hacking incident.
Checking and savings accounts
Ally Bank offers interest-bearing checking accounts and savings accounts to help customers save and grow their money. Ally Bank is one of the only banks that lets customers set up interest-bearing checking accounts with no minimum deposit. Benefits include that customers have access to debit Mastercards and access to 40,000 ATMs. Customers can also receive up to $10 in reimbursement from foreign ATM transaction fees. Other conveniences include eCheck deposits where checks can be uploaded with the camera on a smartphone. Additionally, customers can conveniently pay bills online and wire and receive money anywhere in the U.S.
Savings accounts offer higher interest rates with Ally than with traditional banks, and there are no monthly maintenance fees. Customers can deposit their checks with the camera on their smartphone, and they will also have convenient access to 24/7/365 customer service. Customers also have the convenience of setting up IRA accounts that include traditional, Roth, and SEP IRAs with competitive APYs.
Money market accounts
Ally Bank offers convenient money market accounts with competitive interest rates. Customers will find the money market accounts offer a great APY (higher than with traditional banks). Additionally, there is no minimum deposit that has to be maintained in these accounts. Customers receive a debit card and can request free checks for their accounts. The downside to Ally’s money market accounts is that customers are limited to a total of six “fee-free” transactions per month (due to federal regulations). Customers are not charged for the first six transactions, and there is no monthly maintenance fee (unless they go over the six transactions in a given month).
Aside from the fee after the sixth transaction, customers have access to unlimited deposits and withdrawals monthly. Another concern is the interest rate might not be as high as with the savings accounts. However, rates are higher than with the interest-bearing checking accounts.
Ally Bank offers competitive rates for its CDs with no monthly maintenance fees. Customers can open CDs for both their IRA accounts and for taxable accounts. With all CD accounts through Ally Bank, customers earn an extra 0.05% on the APY when they roll over a CD into a new one after maturity. It’s part of the bank’s loyalty program to increase customer satisfaction and earn you more money that would otherwise sit in a low-yield savings account. High-yield CD accounts through Ally are traditional CDs that lock money in an account for a specific time frame. Interest rates are higher than the other CD account types and customers can incur a penalty if they withdraw their money prior to the maturity date.
If you’re concerned about rates increasing before the maturity date, Ally’s Raise Your Rate CD gives customers the option to snag an attractive rate, even if that rate goes up during the life of the CD. The Raise Your Rate CD is available in two-year and four-year terms; customers can raise the rate once during the two-year CD and twice for the four-year, which both start out at 2.05% with $25,000 deposit. This can help ensure customers don’t get stuck with low rates if they’re locked in for longer time frames. If rates increase, just log into the account and ask for a rate change.
While the No Penalty CD offers no fees for early withdrawals, the APY is lower than its Ally CD counterparts. However, the APY is still higher than average for an 11-month CD when compared to other banks, garnering over 1% while others fall well below that.
At one point, Ally Bank offered credit cards and had a partnership with TD Bank. The program ended on June 17, 2019, but customers are grandfathered under the previous partnership and can still use their credit cards. For new customers, Ally Bank offers its own credit card, the Ally CashBack credit card. Customers earn 2% cash back for purchases at gas stations and grocery stores, then 1% cash back on all other purchases. The introductory APR for the Ally CashBack card is 0% for the first 12 months before it changes to 14.74% – 24.74%, depending on your creditworthiness.
Ally does not offer personal loans. There are plenty of other lenders out there that can help you out if you need to secure some quick cash for debt consolidation, travel, relocation or a wedding, try Lending Club. Lending Club is a peer-to-peer lending platform that offers personal loans for up to $40,000.
For a 30-year fixed mortgage, Ally Bank offers interest rates around 3.17% for homebuyers. Ally Bank offers customer service support and frequent updates on applications. Homebuyers can also opt for 20- or 15-year fixed mortgages or three different ARMs.
Ally Bank offers both fixed-rate and adjustable-rate mortgage refinancing, which are pretty standard options for mortgage refinances. Its fixed-rate options are available in three terms: 15-year, 20-year and 30-year. The ARM mortgages, on the other hand, are available in a number of different terms as well. Ally will look at your credit score, debt-to-income ratio, the down payment amount you plan to pay, and your employment history to decide if you qualify. If you do, you’re likely to get a pretty good rate from Ally, although it can vary from person to person.
Home equity loans and HELOCs
While Ally Bank doesn’t offer home equity loans or HELOCs, there are plenty of banks that do, and with a little research you can find one that has the terms to meet your needs. If you’re looking for the lowest interest rates, you might want to consider Flagstar Bank, which offers some great promotional rates on variable-rate HELOCs. Bank of America also offers low interest rates — although they’re not as low as Flagstar’s rates — and you there are no application costs, closing costs or annual fees on lines up to $1 million.
Not only does Ally Bank offer car loans for personal use, but the bank has also opened up its lending services to those looking for finance business vehicles. If you’ve always preferred leasing vehicles in order to drive different cars, Ally Bank also has a product called Ally SmartLease that shortens financing terms for leases, giving more flexibility for auto leasing.
The final word
Ally Bank is a great bank for customers that prefer online banking with incentives like no monthly fees and no minimum deposits. Because Ally is online-only, they can offer higher interest rates, the ability to conveniently scan and upload checks, and access to 24/7 customer support. However, it might be a bit of an adjustment for anyone used to face-to-face customer service. People that are accustomed to brick-and-mortar locations might not like that there are no physical branches with Ally Bank.