- Review: Ally Bank
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Ally Bank is one of the most well-known online banks out there. It’s a bank many people rely on for checking and savings, as well as auto loans. So what makes them a hassle-free banking option? Well besides the outstanding customer service, their claim to fame is high-yield CDs and savings accounts, and its no-fee policy.
Ally Bank started out as GMAC. Back in 1919, the General Motors Acceptance Corporation (GMAC) was started in order to help consumers buy cars.
The idea was to offer financing so more people could afford cars. Over time, GMAC grew to include mortgage operations and banking operations.
In 2006, a little before the financial crisis, a 51% interest in GMAC was sold to Cerberus Capital Management. That same year, GMAC divested a majority stake of its real estate division to three investors forming Capmark Financial Group.
The financial crisis wasn’t good to GMAC. The company had to get TARP funds to help with its troubles. Plus, there was so much bad press around the GMAC name, the bank officially rebranded, changing its banking unit name to Ally Bank.
Ally Bank failed a Federal Reserve capital adequacy “stress test” in March 2012, but in the middle of 2013, it was still expected a profit could be expected for the U.S. Treasury as a result of its investment in Ally.
For now, Ally Bank is considered one of the best banks in America, and is the best online bank for three years in a row, according to Money magazine. Many customers like Ally for its no-hassle, low-fee banking options.
Ally Bank Accounts
The reason most people decide to go with Ally is due to the fact that the bank offers relatively high interest rates. Savings accounts and CDs are the big draws.
Additionally, it helps that Ally Bank doesn’t charge monthly maintenance fees, and there are no minimums on accounts, either. With many banks requiring minimums and charging fees, this is a nice departure from the norm.
It’s also important to note that Ally is FDIC-insured, so those protections apply. This can help you feel peace of mind. Opening an account with Ally is easy and fast.
You do have to provide information about your identity (including your Social Security number), and answer questions that all banks have to ask as a result of the PATRIOT Act. However, it’s relatively painless, and it’s possible to open a variety of accounts, including CDs and bank accounts, from the same screen, without the need to fill out the same information over and over again.
- Online Savings Account: The online savings account is one of the premier products offered by Ally. There is no minimum deposit required, and you won’t pay monthly fees. You can transfer deposits from linked bank accounts, or you can use remote deposit with the help of your smart phone to deposit checks directly. The APY for the Ally savings account, as of this writing, is 0.85%.
- High-Yield CDs: This is where Ally really starts to shine. Ally offers a number of different CD options. There is an 11-month CD that offers no penalty for early withdrawal. You won’t see the same high yield with this CD, but it still comes with a competitive rate (0.87% as of this writing), and it’s nice you don’t have to worry about a penalty if you discover you need the money. Ally offers CDs of varying term lengths and rates, with the 5-year CD paying a yield of 1.60% as of this writing. Another feature that comes with some CDs is a bump-up option. If rates rise during the term of a CD, you get the option to boost your rate. This is an option one time for the Ally 2-Year CD, and an option twice for the Ally 4-Year CD.
- Interest Checking Account: You get a debit card with this account, and you earn a competitive interest rate. There is no monthly fee or minimum, and the APY as of this writing is 0.40%. However, if you have at least $15,000 in your account, you can earn 0.75%. This is one way to manage your regular checking, pay bills, and accomplish other financial tasks while still earning a yield.
These bank accounts come with Ally’s trademark customer service, and minimal fees. Ally is one of the online banks that reimburse you when you are charged ATM fees by other banks.
No matter what ATM you use, Ally won’t charge you fees, and you can get a refund when other banks charge you fees. It’s also possible to set up Bill Pay with Ally, and you can set up recurring payments for up to a year in advance.
Ally has a handy mobile app that can help you manage your accounts with ease, and also allows you to use Bill Pay and quickly and easily find ATMs. Ally is also a Popmoney partner, so it’s possible for you to easily make person-to-person payments. It’s a fast way to send money to friends and relatives, and it’s secure.
Ally Auto Financing
Even though most consumers think of Ally in terms of banking products, it is also possible to access auto financing.
You can finance purchase or lease transactions, and with eligible GM and Chrysler brands, it’s also possible to use Ally Buyer’s Choice, a hybrid of sorts that offers purchase loans with a certain amount of flexibility.
Ally is a recognized and respected bank. Even though it’s trying to disassociate itself from the unsavory doings of GMAC, and even though the government still owns a portion of Ally (General Motors is considering selling its final stake, and the government could sell its stake as well), the fact remains this is a solid bank that offers good checking and savings account options.
If you are looking for yield, and you don’t want to pay fees or worry about minimums, Ally can be a good choice. The customer service is generally good, and there are a number of ways to contact the bank for help (phone, email, and online chat).
Overall, Ally is a good easy to use bank with a simple interface online and via mobile.