Ally Bank is the old banking arm of GMAC, rebranded with a new, hip vibe and a minimalist approach to banking. It is not just the people’s bank, it is the people’s “ally” and so far it seems to have succeeded.
It is strictly an online bank, and it pays the highest interest rates in the country on its deposits only accounts such as the online savings account. Unlike a traditional bank, it does not extend loans nor offer checking accounts, although its money market account has enough features to act like a checking account.
Your money is safe with Ally Bank as it is FDIC insured, which covers up to $250,000 per depositor. Note: The FDIC deposit insurance coverage remains at $250,000 until 2013.
Note: If you are Canadian and looking for an Ally Bank alternative – please check out the Best Canadian High Interest Savings Account comparison.
Why is Ally Bank different?
In the case of Ally Bank, less is more. It has no physical branches, no minimum deposit, no monthly fees, no minimum balance.
Interest is compounded daily on the four types of deposit accounts, two of which are fixed rate and two are variable rate. In contrast, it is common for rival banks to compound monthly, quarterly or sometimes even yearly.
Ally pulls ahead of the pack by offering a 10 day guarantee for best rates, giving you the assurance that your deposits are earning the highest rate possible. What it means is that if you fund or renew your CD – for both high yield and no penalty – within 10 days of opening the account, you will get the highest rate of that 10-day span. Few among the competitors offer such a guarantee; with those, you will never earn more than the rate locked in on the day you open the CD account.
Types of accounts
There are 4 different accounts offered by Ally:
- Online Savings Account. This account offers one of the highest interest of any online savings accounts.
- No penalty CDs. These CDs offered with a competitive rate but there is no penalty for withdrawal. The interest rate is higher than most online savings accounts so they are a great alternative.
- Certificates of Deposit. All the selection you need in CDs.
- Money Market Account.
Here are some of the features of Ally Bank’s accounts
There are some pretty useful tools on each information page for the different account types. You can compare Ally’s prevailing interest rates with rival banks, calculate interest income on your deposits and figure out fees for services.
Yes, there are some fees, for bounced checks, outgoing wires and paper statements. It is part of Ally’s brand makeover that there are no rude surprises buried in unreadable fine print and no hidden costs. Everything is clearly laid out
Account Opening Process
In five simple steps, you can have an Ally Bank account. All you need is your social security number, and an address in the United States. You can open several accounts as single, joint or multiple owners; bear in mind each is separately covered by FDIC insurance.
Ally has a well thought-out, customer-friendly accounts creation process. Once you have established the account holders, you can open as many types of deposit accounts as you want, set your opening amounts and choose a nickname on a single screen. It is absolutely effortless and easy in a secure online environment.
When it first started, Ally Bank offered double the prevailing interest rates on its deposits. However, with pressure from the rest of the banking industry and regulators, it has inched its rates down. Nonetheless, its deposit rates remain unmatched.
There is a 24/7 customer service, and you will have someone to speak to regardless of the time zone you are in. An indicator on the upper right hand corner of the website informs you as to how long the wait time is. Customer reviews have been positive, and problems appear to be effectively and easily resolved within a couple of days at most.