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ByTaylor Moore Finance & Insurance Writer

Taylor Moore is a finance writer for Reviews.com. Her work has been published in Chicago magazine, the Chicago Reader, and elsewhere.

Ally Bank Review

Ally Bank was one of the first online banks to enter the field, and it remains our choice for the “Best Online Bank” out there for its customer service, high-yield deposit accounts, and mobile-first banking experience. Originally an auto insurance loan provider called GMAC, it spun off in 2009 and, 10 years later, has reached $100 billion in retail deposits from its 1.9 million customers. Ally’s holding company, Ally Financial, also offers home loans, auto loans, managed portfolios, forex trading, and self-directed, low-fee investing, but for the purposes of this review, we’re focusing on the banking and deposit side.

Pros
Cons
Superior customer service
Competitive APYs on deposit accounts
No maintenance fees or minimum account balances
Great mobile experience
ATM fee reimbursement
Checking, savings, money market, CDs, IRAs offered
No physical branches
Cash deposits not accepted
No account opening bonuses
International fees
Limits on savings account transfers

The FDIC-insured bank is best known for its high-yield savings account, but it also offers interest-bearing checking, money market accounts, CDs, and IRAs. If you have an issue or question, it’s easy to contact Ally. It provides a bevy of options (phone, email, live chat), and it has a great record to boot — J.D. Power gave it a 5/5 for overall customer satisfaction in 2019. The customer service and ATM reimbursements (up to $10 per statement cycle) make up for its lack of brick-and-mortar stores.

However, there are some things to keep in mind with Ally. If you prefer face-to-face interaction with bank representatives or receive wages in cash, a hybrid bank like Capital One or Discover may be a better choice for your needs. Ally also charges a <1% foreign transaction fee — and isn’t that transparent about it — so frequent travelers may want to go with a bank that doesn’t penalize them for making purchases outside the U.S.

The Claim

Ally promises “great rates, 24/7 customer care, security you can trust, and a smart, simple online banking experience on all your devices.”

Is it true?

Yes, with a few exceptions. Ally consistently offers some of the highest rates, if not the highest, on its savings accounts and CDs — all without charging monthly maintenance fees or requiring a minimum account balance. Because Ally is online-only, it doesn’t have the overhead that banks with physical locations have, meaning the savings get passed onto you, the customer.

Ally’s customer service record is also exemplary. In the J.D. Power 2019 Direct Banking Satisfaction Study, it scored a 5/5 in overall customer satisfaction, while Consumer Reports rated it 93/100 from an annual survey of 10,000 bank customers. While you can’t go into an Ally bank location and get help from a customer service rep (there are no locations), Ally makes up for it with 24/7 customer service via phone, email, and live chat. In our experience, the bank has been responsive and even lists estimated waiting times before you initiate contact.

Being an FDIC-insured bank, Ally is also secure. Customers are insured for up to $250,000 in deposits in the unlikely event that the bank were to fail. We wouldn’t recommend a bank that wasn’t FDIC-insured to you, so that’s why it was a requirement for our roundup of the best online banks.

The online banking experience lives up to the promise too. Ally’s website and app are both well-designed. The latter, in particular, comes highly rated on the App Store and Google Play Stores. You can deposit checks, make transfers, and contact customer service seamlessly. The website is also a great resource for any finance education questions you have. The Ally blog is constantly updated, too, with advice, case studies, and personal finance news.

There are a few drawbacks to being a customer of Ally, though. Ally charges international fees (up to 1%) for transactions made outside the U.S., so frequent international travelers may find that troublesome. Those who work in jobs where wages are paid out in cash may also find themselves in a bind, as cash deposits aren’t accepted by the bank. You would have to deposit the cash to another bank and transfer to Ally.

What Ally Offers

Interest-bearing checking accounts

Pros
Cons
Competitive APYs
Access to 43,000 ATMs via Ally debit card
$10/mo fee reimbursement for out-of-network ATMs
No account minimums
No monthly maintenance fees
No cash deposits
Limits on monthly withdrawals and transactions

You can earn interest on your Ally checking account. The returns are based on your minimum daily balance: 0.1% APY if you carry less than $15,000 in your account each day, and 0.60% APY if you carry more than $15,000. While it isn’t the highest rate (Capital One gives you 0.20% if you carry a balance under $50,000), it is better by a factor of 10 than the rates that Bank of America, PNC, Chase, and Wells Fargo offer. In our review of the best checking accounts, we awarded Ally “Best Customer Service.”

Like any other checking account, this one comes with a debit card. You can cash checks through the Ally mobile app, pay $0 in monthly maintenance fees, and withdraw money from a network of 43,000 Allpoint ATMs (with up to $10 in out-of-network ATM fees reimbursed every statement cycle), but you can’t make any cash deposits through Ally, since it has no physical locations. You would have to make a transfer from another bank to Ally in order to see that money in your account. Ally also charges a <1% international fee for every transaction made outside the U.S.

High-yield savings accounts

Pros
Cons
Competitive APYs
No account minimums
No monthly maintenance fees
No cash deposits
Limits on monthly withdrawals and transactions

Awarded “Best Savings Account” by Reviews.com, this is one of Ally’s most well-known services. Unlike establishment brick-and-mortar banks, whose yields are scarcely better than keeping cash hidden in a mattress, Ally offers a whopping 1.90% APY on all balance tiers. With interest rates changing so frequently (and with competition catching up), Ally’s savings account APY isn’t always the highest in the category, but it’s usually pretty close. Keep in mind, though, that you are limited to six savings account withdrawals per month, per federal law. If you exceed this number of transactions, you could be hit with a $10 fee per extra transaction.

Money market accounts

Pros
Cons
Debit card and checks provided
Access to 43,000 ATMs via Ally debit card
$10/mo fee reimbursement for out-of-network ATMs
No account minimums
No monthly maintenance fees
Mediocre APYs
No cash deposits
Limits on monthly withdrawals and transactions

Ally was awarded “Best Customer Service” in our review of the best money market accounts for its high ratings from J.D. Power and Consumer Reports. On top of not requiring a minimum deposit, Ally’s money market accounts also conveniently come with a debit card and checks. Rather than transferring from your money market account to your checking, you can make purchases seamlessly. Making ATM withdrawals through the debit card also lets you get around the rule limiting you to six monthly withdrawals or transactions. However, the APYs offered by Ally are just OK. Compared to most brick-and-mortar banks, its 0.90-1.00% APYs (depending on your minimum daily balance) are great, but other online banks, like Discover, offer money market accounts promising almost 2X those returns.

CDs

Pros
Cons
Competitive APYs
Variety of CDs and term lengths offered
No minimum deposits
Automatic renewal at maturity
Early withdrawal penalties

Though many online banks (like TIAA and Marcus by Goldman Sachs) are now toe-to-toe with Ally in terms of interest rates, we still think Ally offers the best CDs overall. The combination of great customer service, no minimum deposits, and consistently high APYs makes investing in Ally worth it.

Ally offers three types of CDs:
• High-yield CD (with terms ranging from 3 months to 5 years)
• Raise-your-rate CD (which allows you to increase your rate if the advertised APY goes up after a designated time)
• No-penalty CD (11-month term with APYs ranging from 1.65% to 2.05% depending on the deposit amount)

Interest is compounded daily, and the bank automatically renews the CD at maturity. However, it’s important to note that early withdrawal penalties apply to the high-yield and raise-your-rate CDs. If you take the money out before the maturity date, you’d receive a fine that could potentially eat into your initial deposit.

IRAs

Pros
Cons
Savings account and CD IRAs offered
Roth, Traditional, and SEP IRAs offered
Fixed-rate retirement savings
Potential tax benefits
Maximum contribution limits
Early withdrawal penalties

Ally offers three of its most popular deposit accounts (savings accounts, high-yield CDs, raise-your-rate CDs) as IRAs. If you don’t want to subject all of your retirement savings to the volatility of the market, these investment vehicles allow you to get consistently high returns (high for deposit accounts, that is) with minimal risk. You also get the tax benefits that come with Roth IRAs, traditional IRAs, and SEP IRAs, depending on which you choose. The drawback is that there are maximum contribution limits and potential penalties for withdrawing funds before you’re 59½.

Ally Bank Features

In business since: 2009

J.D. Power 2019 Direct Banking Satisfaction Study score: 5/5

Consumer Reports rating: 93/100

FDIC insured: Yes

States served: 50

Number of locations: 0 (online-only)

Pros: Superior customer service, competitive APYs on deposit accounts

Cons: No physical branches, cash deposits not accepted

Checking & Savings
Online savings account
Interest checking account
Money market account
CDs
High-yield CDs
Raise-your-rate CDs
No-penalty CDs
IRAs
IRA high-yield CDs
IRA raise-your-rate CDs
IRA online savings account

Superior customer service

Ally is known for its top-notch customer service. In J.D. Power’s 2019 survey of online bank customers, Ally received a perfect 5/5 score for overall satisfaction. It also earned a 93/100 score from Consumer Reports’ annual survey of 10,000 bank customers. Because of these achievements, we awarded Ally “Best Online Bank” in our roundup of online banks and “Best Customer Service” in our best money market accounts review. If you have a question or issue with your account, you can take advantage of Ally’s 24/7 customer service. The website helpfully lists estimated wait times for both its customer service hotline and live chat service.

Competitive APYs on deposit accounts

As an online bank with no brick-and-mortar locations and few overhead expenses, Ally is able to pass the savings onto its customers. The bank is perhaps best known for its savings account, which has a 1.90% APY as of October 2019. Compared to establishment banks like Wells Fargo and Chase, whose savings account APYs rarely exceed 0.01%, that’s an amazing return. Of course, interest rates tend to fluctuate on a weekly or even daily basis due to changes at the Federal Reserve level, but when it comes to savings accounts, checking accounts, CDs, and money market accounts, Ally is consistently at the top of the pack.

No maintenance fees or minimum account balances

Ally’s lack of physical locations also lends itself to fewer fees. Unlike other leading banks, Ally does not charge monthly maintenance fees for account use or require a minimum account balance. When it comes to the fees that it does charge — like excessive transfers and outgoing domestic wires — Ally usually provides transparency.

Great mobile experience

Mobile banking has become a necessity for banks to maintain relevance in the digital age, but not all of them have the best user experiences. On this front, Ally is highly decorated, earning an impressive 4.8/5 from 18,000+ reviews on the Apple Store and a 4.3/5 from its nearly 12,000 reviews on the Google Play Store. Through the Ally app, which offers fingerprint login, you can deposit checks, pay bills, make transfers between Ally and other banks, find nearby ATMs, and contact customer service.

ATM fee reimbursement

Through Ally, you can access 43,000 Allpoint ATMs across the United States. The downside of using any ATM is the fees — a Bankrate study recently found that the average ATM surcharge is $3.09 and climbing. The fortunate part is that Ally reimburses up to $10 at the end of each statement cycle for fees charged at other ATMs within the U.S., limiting the times you’ll have to spend money to get your money. This benefit does not apply to international ATM transactions.

Possible drawbacks

No physical branches

Ally Bank is online-only, meaning it does not have any physical branches in which you can talk to customer service representatives, deposit checks, or make cash withdrawals. The bummer here is that you can’t swing by Ally to accomplish these errands like you can with ubiquitous chains like Bank of America and Chase. However, if you’re not inclined to sort out these actions face-to-face anyway, you may think of Ally’s live customer service chat, for example, as a benefit and not a drawback.

Cash deposits not accepted

If you regularly earn wages in cash, then using Ally as your primary bank may come with challenges. Ally doesn’t accept cash deposits, so your best course of action is to deposit cash with another bank and then transfer to Ally. At this time, it only accepts deposits through checks cashed online or through the mobile app, checks mailed, online transfers and direct deposit, and wire transfers.

No account opening bonuses

Some banks, like Chase and Citi, offer introductory bonuses for people who open savings and checking accounts with them. These cash bonuses are often contingent upon the initial deposit you make, monthly direct deposit amounts, or maintain minimum balances. Ally does not offer any perks for account opens, beyond built-in benefits like no monthly fees and high APYs.

International fees

Ally prides itself on transparency when it comes to fees, but one fee that’s hidden is the foreign transaction fee, or international fee. On the checking account page of the website, Ally lists fees charged and not charged, but leaves out the foreign transaction fee. When talking to an Ally customer service representative via chat, we asked about this fee and were told that debit card transactions made outside the U.S. were subject to a fee less than 1%. While this is on the lower side — the higher end of the range is 3% — we wish this were listed on Ally’s FAQ or checking account page.

Limits on savings account transfers

If you make too many transfers from your savings account, Ally will charge you a $10 fee. The federal government limits all users of savings accounts to six transactions (electronic or by phone) per statement cycle, and Ally enforces this rule strictly. Excessive transactions on a regular basis will cause Ally to either close the account or convert it to checking. While this law applies to all banks and all customers, we think it’s worth keeping in mind so your savings account doesn’t get the same amount of use as your checking, for example.

The Competition

 
Ally Bank
Capital One
Discover
Marcus by Goldman Sachs
Minimum checking requirement
N/A
N/A
N/A
N/A – No checking offered
Minimum savings requirement
N/A
N/A
N/A
N/A
Max savings account APY
1.90%
1.90%
1.90%
2.00%
1-year CD APY
2.25%
2.30%
2.30%
2.25%
Monthly maintenance fees
N/A
N/A
N/A
N/A
24/7 customer service
X
X
States served
50
50
50
50

*All information accurate as of Oct. 2, 2019.

Ally Bank vs. Capital One

On the surface, Ally Bank and Capital One, our pick for “Best Hybrid Online Bank,” look the same. They both have strong mobile capabilities and offer high-APY deposit accounts with no minimum account balances or monthly maintenance fees. However, there are a couple notable differences. Ally is an online-only bank with no brick-and-mortars, while Capital One offers branch locations and branded cafes that serve Peet’s Coffee. Knowing this, you’d think Capital One offers the very best of an online bank and establishment bank, but one big drawback is its customer service, which is offered seven days a week but not 24/7. In the J.D. Power 2019 Direct Banking Satisfaction Study, Capital One scored 2/5 in overall customer satisfaction, while Ally earned a 5/5. If you prefer face-to-face interaction with bank representatives, we recommend Capital One, but if customer service is your priority — no matter the medium — Ally is your best bet.

Ally Bank vs. Discover

Ally and Discover have similar deposit account offerings, going toe-to-toe when it comes to high-yield savings accounts and CDs. Discover’s customer support, while highly rated by J.D. Power, is more limited than Ally, though. Discover doesn’t seem to answer customer inquiries by email, and its live chat service is limited to current members only. On the other hand, Discover is great for international travel. While many banks will charge 1-3% foreign transaction fees for any purchases made outside the U.S. (Ally charges a fee that’s “less than 1%,” according to a customer service rep), Discover does not penalize you. If you are studying abroad or are a frequent international traveler, we recommend going with Discover.

Ally Bank vs. Marcus by Goldman Sachs

As of October 2019, Marcus by Goldman Sachs, offers the highest returns of any savings account. You can earn 2.00% APY while paying no monthly maintenance fees — a deal that’s better than Ally, Discover, Capital One, and other banks. If you’re thinking about switching to Marcus right now, though, you should think twice. The online-only bank, launched in 2016 by the wealth management giant, is still in its nascency. Though the returns for its savings account and CDs are great, it doesn’t offer any checking and money market accounts. It also doesn’t have a mobile check deposit service (you have to either mail the check or make a transfer from another bank) or 24/7 customer service. The company has also reportedly lost $1.3 billion in loans by betting on the wrong horses, so to speak. We recommend Ally in the meantime, as it’s shown to be a leader in customer service, mobile-first capabilities, and product offerings.

Ally Bank FAQ

How many locations does Ally Bank have?

Ally Bank is online-only and thus has no brick-and-mortar locations. All transactions must occur through the Ally website, Ally app, wire transfer, or by mail.

How safe are online banks?

Very safe. If an online bank is federally insured by the FDIC (Federal Deposit Insurance Corporation), which protects up to $250,000 in deposits if an institution fails, it has the same protections as established banks like Bank of America, Chase, Citi, and Wells Fargo. FDIC insurance means the federal government is confident in the bank’s financial strength. In our evaluation of the best online banks, each of our picks, including Ally, were backed by the FDIC.

Does Ally have ATM access?

Yes. Ally has access to more than 43,000 ATMs through the Allpoint ATM network. It offers up to $10 reimbursement at the end of each statement cycle for fees charged at other ATMs within the U.S., which is equal to about three or four ATM transactions per month. The reimbursements do not apply to ATM transactions made in countries outside the U.S.

Does Ally accept cash deposits?

No. Ally only accepts deposits in the form of checks cashed online or through the mobile app, checks mailed, online transfers and direct deposit, and wire transfers.

What fees does Ally Bank charge?

Ally does not charge fees for monthly maintenance, standard or expected ACH transfers, copies of online statements, incoming wires, postage-paid deposit envelopes, and official/cashier’s checks. However, it does charge fees for returned deposit items, overdraft items paid or returned, excessive transfers and withdrawals, expedited delivery, outgoing domestic wires, account research, and foreign transactions (<1%).

The Bottom Line

Ally Bank is a great choice for those who want high returns on their deposit accounts and don’t mind the lack of physical branches. To make up for it, Ally offers 24/7 customer service through phone, email, and live chat — and they have a great customer satisfaction record to boot. However, there are limitations to banking with Ally, such as foreign transaction fees and no cash deposits. If you are a frequent international traveler or receive wages in cash, a hybrid bank like Discover or Capital One may be more convenient for your lifestyle.

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