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• Ally offers strong customer support, an intuitive web interface, and an easy-to-use mobile app.
• It’s a top option for people who want a digital banking experience — its high-yield savings account and CDs are its strongest products.
• You can open a variety of bank accounts with Ally, as well as use investment products and apply for home and auto financing.
• If you already use and like Ally, you may want to look closely at its other services, too.
• Read more personal finance coverage »

Ally Financial is an online-only bank that’s probably best known for its high-yield savings account. 

However, it offers a wide range of products, making it a good option for people who want to do all their banking, borrowing, and investing with one company.

Along with its high-yield savings account, you can also open a checking account, money market account, or certificate of deposit (CD). Ally pays competitive APYs on its savings account and CDs and makes banking affordable by offering accounts with no minimum deposit and no monthly fees.

Along with checking and saving, you can also apply for a mortgage, refinance your home loan or take out an auto loan or a lease a vehicle. Ally Invest provides investment products including mutual funds and exchange-traded funds (ETFs).

The bank is known for providing strong customer service for all its services, as well as a smooth digital experience — you’ll have access to a user-friendly interface, easy-to-use mobile app, and payment and affordability calculators. Considering you’ll do everything online, through the app, or over the phone with Ally, its strong customer support and clean interface make it one of the top choices for online-only banks.

Who should use Ally?

You should use Ally if you:

• Want to do all your banking online
• Are looking for a good rate on your savings
• Don’t want to deal with initial deposit or minimum account balances
• Want to open a CD
• Are looking to do your banking, investing, and borrowing in one place
• Value 24/7 customer service

You should not use Ally if you:

• Aren’t comfortable banking online
• Are looking for a money market account only
• Need to regularly deposit cash into your bank account
• Want to take out a second mortgage
• Plan to take advantage of a government home loan
• Want a home loan but live in Hawaii, Massachusetts, Maryland, Minnesota, New Hampshire, New York, Nevada, Virginia, Vermont, or Wyoming

Ally could be a good fit for people who want to do all their banking (and maybe even investing and borrowing) with one institution, and who want to do it online. Ally offers a wide range of products, including bank accounts, investment products, home loans, and auto loans.

Ally’s strongest products are its high-yield savings account (which ranks as our top high-yield savings account overall) and its CDs (which rank as our top picks for CDs overall). Its checking account is also solid.

What if you want to open a money market or investment account — or take out a home or auto loan? In these cases, you may like using Ally if you already have a high-yield savings account, checking account, or CD with the company and know you like its online interface and customer service.

However, if you only want to open a money market account or take out a home loan, for example, you may decide another company is a better fit.  You can find a higher rate on a money market account at other banks, and Ally doesn’t offer second mortgages or government-backed mortgages.

You may like Ally if you want to do everything online when you bank, invest, or take out a loan. The company has a high-quality user interface, so if you’re looking for a digital experience, Ally is a top contender.

Ally is also a good option if customer service is important to you. You can chat live or call an agent 24/7 if you have a bank account. Hours are more limited for other departments, but Ally’s customer service is still more accessible than many competitors.

The pros of Ally

You can do all your banking in one place

Ally offers a wide range of bank accounts, which is convenient for people who want to keep all their accounts with one bank. You can open a high-yield savings, checking, and money market account, as well as a CD.

Ally also provides a lot of options for CDs. It offers three types: High Yield, Raise Your Rate, and No Penalty. (Learn more about the three types with our full Ally CD review.) It’s currently also offering a limited-time 15-month High Yield CD, coming to 11 options total.

Ally offers competitive APYs

Ally consistently offers relatively high APYs, especially for its high-yield savings account and CDs.

If you open a checking account, the bank offers 0.10% APY for balances under $15,000, which is higher than the national average of 0.06%. If your balance is $15,000 or more, you’ll earn 0.50%.

Interest rates fluctuate over time along with the federal funds rate, so Ally accounts may not always offer the highest rates. However, Ally does consistently provide competitive rates.

Banking is affordable

Ally doesn’t charge a monthly service fee for any of its accounts. It also doesn’t require an initial deposit or minimum account balance for any products, including its investment accounts.

When you open a CD and withdraw before the term ends, banks charge you a penalty. Ally’s early withdrawal fees are lower than most competing banks’ penalties.

Home loans can be affordable

Through Ally, you may be able to enroll in Fannie Mae’s HomeReady mortgage program. This program is available for first-time homebuyers and people with low or moderate income levels. If you qualify, you can put down as little as 3% upfront and receive a discount on private mortgage insurance.

Ally is also an affordable lender for jumbo loans, or mortgages exceeding the loan limits set by Federal Housing Finance Agency (FHFA). In 2020, a jumbo loan for a single-family home is for an amount greater than $510,400 in most US states, and larger than $765,600 in Alaska, Hawaii, Guam, and the US Virgin Islands.

Many lenders require a down payment of at least 20% to receive a jumbo loan, but you’ll only need a 10% down payment with Ally. Even with only a 10% down payment, you won’t have to pay for private mortgage insurance for a jumbo loan.

Ally provides strong customer support

Ally offers fast and helpful customer support, especially within its banking department. You can call or chat live online with a banking customer service representative 24/7.

If you invest with Ally, you can access live chat 24/7, or call seven days a week between 7 a.m. and 10 p.m. ET.

Ally Auto will chat live with you online 24/7. You can call Monday through Friday, 8 a.m. to 10 p.m. ET and Saturday 9 a.m. to 7 p.m. ET, but phone lines are closed Sunday.

If you have a home loan, you can call Monday through Friday, 8 a.m. to 10 p.m. ET and Saturday 10 a.m. to 4 p.m. ET, but phone lines are closed Sunday.

Its web and mobile interfaces are easy to use

Considering you’ll do everything online or through the app, web and mobile interfaces can make or break your experience with an online-only company.

Ally’s website is intuitive, and its mobile app has received positive reviews in the Apple and Google Play stores, making it a good choice for people who want an online experience.

Ally provides helpful online tools

Ally’s website features several tools to help you figure out how much money you could earn, save, or spend with its services, including the following:

Ally rewards customers for using multiple products

You could receive benefits for using more than one product with Ally.

If you’re already an Ally customer and take out a mortgage or refinance with Ally, the company contributes $500 toward your closing costs.

If you have a checking account along with a money market or high-yield savings account, you can enroll in the Overdraft Transfer Service. This service transfers funds from your other accounts into your checking account if you’re at risk of overdrawing so you can avoid the $25 overdraft fee.

The cons of Ally

There are no physical locations

Ally is an online-only company, so there are no physical branch locations. If you prefer working with agents face-to-face, then Ally probably isn’t the best fit.

This also means you can’t deposit cash into your Ally accounts, so if you’re someone who regularly receives cash, you’ll probably want to bank with a different company.

You can find a higher money market account APY elsewhere

Ally’s high-yield savings account and CDs offer some of the highest rates in the industry right now, and its checking account offers a decent APY, especially for balances of $15,000 or more.

Regarding interest rates, the money market account is Ally’s weak link. Its interest rate is still higher than what many traditional banks offer, but you can definitely find higher.

Keep in mind that interest rates fluctuate over time, regardless of which institution you bank with. A bank may offer higher rates than Ally on its money market account today, but lower rates next month.

There are some home loan limitations

You can take out a first mortgage or refinance with Ally, but you can’t take out a second mortgage, including a home equity loan or home equity line of credit (HELOC).

Ally also does not process government loans, including loans by the Federal Housing Administration (FHA), Department of Veterans Affairs (VA) or the Department of Agriculture (USDA). These loans are available to people with lower credit scores and less money for a down payment.

The company doesn’t process loans for homes in Hawaii, Massachusetts, Maryland, Minnesota, New Hampshire, New York, Nevada, Virginia, Vermont, or Wyoming, so you can’t use Ally Home if you live in these 10 states.

What does Ally offer?

You can open a bank account or investment account, or take out loans through Ally. The company offers strong customer support and an easy-to-use web and mobile interface, and it’s known for its low fees.

Here are the products Ally offers.

Bank accounts

You can open the following bank accounts with Ally:

Loans

You can receive the following loans from Ally:

Investment products

Ally offers the following investment products:

Ally compared to similar banks

Ally vs. CIT Bank

Ally and CIT Bank are both online-only companies that offer a variety of bank accounts. CIT Bank doesn’t offer investment products, so if you want to do your banking and investing with the same company, you may want to go with Ally.

Ally ranks as our top pick for the best bank for high-yield savings accounts and CDs, while CIT Bank ranks as our best bank for money market accounts. However, the term “best” means something different for everyone, so you still might choose to bank with a different company.

Ally is probably better for people who don’t have much money to start saving, because it doesn’t require an initial deposit for any of its bank accounts. You will need an opening deposit for CIT Bank accounts, including $100 to open a savings account and $1,000 to open a CD.

Both companies offer home loans and refinance mortgages, but unlike CIT Bank, Ally offers auto financing.

CIT Bank has good customer service options, but Ally has a leg up for people with bank accounts — you have 24/7 phone access to a banking representative.

Ally vs. Marcus by Goldman Sachs

Both Ally and Marcus offer high-yield savings accounts and CDs with good reputations and competitive rates. However, Marcus doesn’t have checking or money market accounts, so if you’re interested in either of those accounts, Ally is your better option.

Although Ally is our top pick for a bank offering CDs, Marcus offers more options for no-penalty CDs.

Both companies offer home loans. Marcus doesn’t provide auto financing, but it does have personal loans and credit card consolidation loans.

Both companies are known for having some of the best apps and web interfaces in the industry. While Marcus does offer phone and online chat customer service, the company doesn’t offer 24/7 access for either option.

Source: https://www.businessinsider.com/ally-bank-review