Review of: Ally Invest
Reviewed by: Kevin Mercadante
Last modified: August 31, 2018
Ally Invest is the online brokerage firm of Ally Bank, and its great pricing and customer service make it hard to beat. Unfortunately, the funding process can be tricky, taking up to 10 business days. And if you are looking for a local branch office, you'll have to look elsewhere.
- Passive investors
- Options traders
- Penny stock traders
- IRA investors
- Forex traders
Are you looking for an online stock broker with low fees and plenty of features that would appeal to the active trader? Maybe you’re looking for a platform that could seamlessly connect with your personal bank, making it a “one-stop shop” for your financial accounts.
Whatever your needs, Ally Invest is a brokerage worth checking out. It’s a relative newcomer to the market. Ally Financial created the platform from its purchase of TradeKing. We’ll talk about that in more detail in just a minute. But first, let’s check out some of the features that make Ally Invest unique.
Ally Invest Fees & Features
|Stock Trades||$4.95/trade ($3.95/trade – 30 trades per quarter or $100k+ balance)|
|Options Trades||$4.95/trade + $0.65/contract ($3.95/trade + $0.50/contract)|
|Investment Types||Stocks, Penny Stocks, Options, ETFs, Mutual Funds, Bonds, FOREX, Futures|
|Access||Website, iOS App, Android App|
|Broker Assisted Trade|
|No Fee ETFs|
|Customer Service||Phone: 24/7; Live Chat: 24/7; Email|
|Promotions||Get up to a $3,500 Cash Bonus|
- Account Protection — Accounts are SIPC protected for up to $500,000, with $250,000 for cash claims. Further coverage is available for up to $37.5 million, with up to $900,000 in cash with an aggregate cap of $150 million (Forex & Futures accounts are not covered).
- Clearing Agency — Brokerage accounts are serviced by Ally Invest Securities LLC, and advisory client account assets are kept in custody with Apex Clearing Corp.
- Trading Tools — Ally Invest offers a full suite of trading tools to help you become a more successful investor, including:
- Streaming Charts — Six charts with more than 90 chart studies and drawing tools to analyze the performance of securities; fully customizable.
- Market and Company Snapshots — Market statistics, news and detailed metrics and insights on individual companies.
- Watchlists — A customizable list to track and view market data on groups of securities.
- Profit/Loss Calculator — Enables you to understand the profit and loss potential of an options trade before you make it. You can also see how outcomes change based on fluctuations in volatility and time.
- Probability Calculator — You can use implied volatility to help you determine the probability of hitting your targets before placing trades.
- Market Data — Provides quotes, charts, high/low prices, dividend dates, overall options summary, news, historical quotes and peer performance comparisons.
- Options Chains — Enables you to place options trades and even complex multi-leg spreads with ease.
What Is Ally Invest?
Publicly traded firm Ally Financial Inc. purchased TradeKing in 2016. Ally rebranded TradeKing as Ally Invest, its new investment. TradeKing was well known as one of the very lowest-cost investment platforms. It focused on self-directed investing and options trading. Since taking over the highly successful investment platform, Ally has added its own features and benefits. This has turned it into one of the very top investment services available.
Ally Invest’s sister company, Ally Bank, is one of the leading banks on the web. It offers some of the best interest and loan rates anywhere. The bank is online only, with no local brick-and-mortar branches. All told, Ally has more than 7,000 employees and more than $70 billion in customer deposits. In December 2017, Kiplinger’s Personal Finance magazine listed Ally Bank as the Best Online Bank.
Ally Invest now serves more than 250,000 customer accounts. It holds more than $4.7 billion in assets.
How Does Ally Invest Work?
You can trade stocks, exchange-traded funds (ETFs) and fixed-income securities. That can include corporate, agency and municipal bonds. You can trade Treasurys, strips and zeros, certificates of deposit (CDs) and new issues. You can also trade from more than 12,000 load and no-load mutual funds. Ally Invest also has a robust options suite. It includes equity, index and ETF options, as well as Binary Return Derivatives.
As well as trading securities, Ally Invest offers its Forex & Futures platform. This features a large range of tools and resources. It also boasts some of the lowest fees available for forex trading.
For those who are not concerned with self-directed investing or with forex and futures trading, Ally Invest offers its Managed Portfolios service — equivalent to a robo advisor. Managed Portfolios can give investors professional investment management. The fees for such services are much lower than what is charged by typical investment managers.
Funding your account. The easiest way to fund your account is with a debit card. That’s because the funds will post to your Ally Invest account immediately. Wire transfers take one to two business days. These can be done with U.S. dollars, euros, Canadian dollars, Japanese yen, Swiss francs, Australian dollars or British pounds.
Other funding methods take more time. If you fund your account using an ACH from your checking account, the transfer process will take two to five business days. That means up to one week. If you pay by check, it’s even slower. It will take five to 10 business days to process. The check must be drawn on a U.S. bank.
Ally Invest self-directed fees. Ally Invest’s basic trading fee for stocks, ETFs and options is $4.95. The broker charges an additional 65 cents per contract for options. This fee is comparable to both Fidelity and Charles Schwab but is considerably lower than the $6.95 per trade charged by TD Ameritrade and E*TRADE.
Special pricing for high-volume/high-balance investors. Investors who made 30 or more trades in the prior calendar quarter and/or maintained a minimum average daily balance of more than $100,000 in the prior quarter qualify for special pricing: fees of just $3.95 per stock, ETF and options trade, plus 50 cents per contract for options.
For mutual funds, there is no fee charged on load funds — for neither the purchase nor the sale. There is a $9.95 charge for no-load funds, for both purchases and sales.
Ally Invest has a $1.00 per bond fee on bonds ($10 minimum). There is no charge on U.S. Treasurys and a $24.95 per transaction charge on certificates of deposit (CDs).
There is no commission fee for forex trades. Instead, Ally Invest is compensated based on the buy/sell spread.
There is no annual fee, no inactivity fee and no IRA annual fee.
Ally Invest Managed Porfolios
We don’t all want self-directed investing, so Ally Invest offers Managed Portfolios. This service provides professionally designed and personalized portfolios made to fit your goals. It boasts automatic rebalancing to keep the target portfolio allocation. That means you never need to worry about maintaining your portfolio.
You need at least $2,500 to open an Ally Invest Managed Portfolio. The annual management fee is 0.30%. That is less than one-third of the industry average of 1.02% for a professionally managed investment portfolio. You can have a $100,000 portfolio managed for just $300 per year.
Each Managed Portfolio is made based on the client’s risk tolerance, financial goals and investment horizon for each of those goals. Low-cost index funds (ETFs) are used to make up the portfolio. This will maximize your return. You can even adjust your risk tolerance and, therefore, your portfolio allocations.
Managed Portfolios can be made for individual and joint taxable accounts; traditional, Roth and rollover IRAs; and custodial accounts. And as with Ally Invest in general, customer service is available on a 24/7 basis with your Managed Portfolio.
Ally Invest Forex & Futures
Ally Invest offers Forex & Futures trading for more skilled investors. You can trade more than 50 currency pairs. These include gold and silver. All trades can be done in real time. The service comes with strong research and analysis tools. There is also a wide range of educational material. You will also enjoy market access 24 hours a day, Sunday through Friday (beginning Sundays at 10:00 AM and ending Fridays at 5:00 PM, all times Eastern).
The Forex & Futures service offers a customizable trading platform that includes:
- Metals, agriculturals, indices and bonds from various exchanges
- Tiered commission plans that offer reduced fees for high-volume trading
- Charting capabilities based on over 100 technical indicators
- Indicators, real-time alerts and a tradable Market Depth Ladder — all customizable
When you apply for an account, you can open either a ForexTrader or a MetalTrader account. You can open a Forex & Futures account with as little as $250. $2,500 is recommended so that you will be able to take full advantage of the account. This will allow more flexibility and diversification.
Ally Invest Forex & Futures offers some of the tightest trading spreads in the industry. This is done to reduce your trading costs and increase your profit potential. Ally Invest even publishes its live spreads.
As noted above, Ally Invest is compensated based on the buy/sell spread. It does not charge commission fees on forex trades.
ForexTrader Web. This feature is designed to run on both Windows and Mac and with many web browsers. It has real-time position and account information, a fully integrated charting tool and a variety of single and contingent order types, including If/Then, If/Then OCO and Trailing Stops.
Forex Premium Charting. This offers professional-grade tools to identify and decode forex patterns and trends.
The tool allows you to:
- Overlay multiple indicators for advanced technical analysis
- View auto trendline indicator continuation on charts
- Easily save, export, print or email charts
- Customize charts to your personal preferences
Forex & Futures Mobile App. The app is available on iPhone and Android. It has strong trading capabilities, charting tools, price alerts, real-time news and commentary, and the ability to manage your account on the go.
Educational Resources. Ally Invest offers premium education, from the basics of forex and futures trading to technical and fundamental analysis. There is also a helpful glossary if you just need to quickly look up a term.
Forex & Futures Practice Account. Ally Invest offers a free $50,000 practice account that gives you full access to the trading platforms and tools for up to 30 days. This lets you hone your skills before putting your own real money to work. This is a big plus for anyone who either is new to forex and futures trading or wants to improve their skills before going live.
It’s important to understand that forex accounts are not protected by SIPC or FDIC insurance. They are not guaranteed by Ally Invest.
Ally Invest Alternatives
|Stock Trades||$4.95/trade ($3.95/trade – 30 trades per quarter or $100k+ balance)||$6.95/trade||$4.95/trade|
|Promotions||Get up to a $3,500 Cash Bonus||Trade Free for 60 Days + Get Up to $600 Cash||None|
|Review||—||Read the Review||Read the Review|
Ally Banking & Lending
When you invest your money with Ally Invest, you will also have an option to bank through Ally Bank. It is one of the most innovative online banks out there, offering some of the best interest rates available on any banking platform.
Ally Bank offers online savings, money market accounts, high-yield certificates of deposit and interest checking.
Ally Bank also offers mortgage loans and a cash-back credit card. The real strength on the lending side is auto financing and leasing. In fact, Ally Bank is the successor to GMAC, the former auto financing arm of General Motors. It works directly with more than 17,000 car dealers across the country. It provides loans and leases for millions of drivers. It offers the Ally SmartLease program that enables you to lease new and even pre-owned cars.
The banking and lending side of Ally Financial can make investing with Ally Invest a true one-stop shop for all your financial needs.
You can read all about Ally Bank itself in our in-depth review.
Pros and Cons
- Competitive Fees — At $4.95 per trade (and $3.95 per trade for high-volume/high-balance traders), Ally Invest is at the lower end of trading fees among major investment brokerages.
- Comprehensive Platform — This platform can accommodate virtually any type of investor, from self-directed active trader to the passive investor.
- Banking Options — When you invest with Ally Invest, you also have access to Ally Bank, which has some of the best interest rates available on various savings vehicles, and among the most competitive auto loans and leasing arrangements on the market. You can bank where you invest.
- Managed Portfolio Option — Ally Invest has an option for those who are not interested in DIY investing and for those who want to have some or most of their money professionally managed while doing self-directed investing through the same broker.
- 24/7 Customer Service — Ally Invest representatives are available all day every day.
- Fund Transfers Can Be Slow — It can take up to five business days (one week) to transfer funds into your account by ACH. Funding your account by check can take up to 10 business days (two weeks).
- No Local Branches — Some of the larger investment brokerages, such as Fidelity and Charles Schwab, have local branches available. If you prefer that kind of face-to-face contact with your investing activities, then Ally Invest probably won’t work for you.
- No Commission-Free ETFs — Unlike some competing brokers, Ally Invest does not offer ETFs that cost nothing when you trade.
Ally Invest offers a complete investment platform. You can do self-directed investing or rely on Ally Invest Managed Portfolios to do it for you. The 24/7 customer service is perfect for those who do their best investment thinking at night or on weekends. You can think of Ally as an investment platform that never sleeps.
Meanwhile, you also have access to Ally Bank with its very attractive offerings of high-interest rate checking, savings and CDs. The bank also offers some of the best auto loans for both new and used cars.
The Managed Portfolios option requires a higher initial deposit than those of other robo advisors such as Betterment and Wealthfront, but lower than that required by Charles Schwab Intelligent Portfolios. Managed Portfolios also has a higher fee structure than Betterment and Wealthfront. These downsides are offset largely by the fact that you can also shift some or all of your portfolio to self-directed investing if you want to in the future.
However, if you’re looking strictly for a discount brokerage, at $4.95 per trade, Ally Invest is at the lowest range of trading fees among the major players. But it gets even better for high-volume/high-balance traders, at just $3.95 per trade.
Its strong services and low fees make Ally Invest one of the very best trading and investment platforms to use. You really can’t lose with this one.