Ally Bank, once known as GMAC bank, was previously a part of GMAC Financial Services. Now rebranded, this online bank offers products such as an online savings account, certificates of deposit, and a money market account. These accounts are all FDIC insured and covered up to $250,000 per depositor by the FDIC.
After reviewing the rates at other banks, I believe that Ally Bank offers a great option for those who are looking for a new place to keep their funds, given the bank’s relatively higher rates compared to the competition. Here’s a look at Ally’s products:
Ally Bank Review (Formerly GMAC Bank)
#1 Online Savings Account
The Ally Bank Online Savings Account has a current yield of 1.30% (Updated 03/09/10) APY, which seems generous compared to contenders like Bank of America’s savings account (returning a measly .10% APY) offered in Illinois, or even ETrade’s Complete Savings Account at 0.50% APY. The interest here is compounded daily. In addition, there’s no minimum balance, no monthly fees, and you can open an account with $0.
If you haven’t started an emergency fund yet or if you have a specific savings goal in mind, then the Online Savings Account can be a good starting point.
#2 Money Market Account
Some of us need the convenience of a money market account. With the Ally Bank Money Market Account, you can have a 1.30% variable APY and a free check card. Your first fifty checks are also free. As for ATM fees, Ally Bank won’t charge you; even better, it will refund the first four fees you pay in a month for using another bank’s ATM, up to $6 per month. That certainly gives you some leeway and flexibility to use other ATMs if need be. Convenient!
On the down side, there are withdrawal and transfer limits. If you have a Money Market Account, only three of the six withdrawals you can make each statement cycle (usually per month) can be by check or with your check card at a point of sale. Exceeding the limits means that you’ll be hit with a $10 per transaction fee, so it helps to plan ahead for withdrawals and transfers.
Other fees include: returned deposit item for $7.50, non-sufficient funds for $20.00, and stop payments for $15.00. By comparison, Capital One Direct Banking’s money market account charges $25 for a deposited check return, $25.00 for non-sufficient funds, and $25.00 for a stop payment request, so it would appear that banking at Ally Bank is cheaper and more cost effective.
#3 Two Ally Bank CD Options
You have a few more savings choices with Ally Bank’s CDs: there’s the Classic CD, which has the bank’s highest fixed CD rate with a fixed term; as of today, it’s a 1.58% APY for a one-year term. In comparison, the Orange CD at ING Direct has a 1.50% APY for a term of 12 months.
Like Ally Bank’s savings account, you can open the Classic CD with $0 (you can fund the CD account later) and there are no monthly fees. At maturity, the Classic CD will automatically renew. If you want to withdraw the earned interest, you just need to let the bank know about your intentions either before the maturity date or within the next ten days after maturity.
You’ll encounter some fees if you decide to withdraw your money before the CD matures. It will cost you three months of interest for early withdrawal from CDs with terms of 3, 6, 9, or 12 months. The penalty goes up to 6 months of interest for CDs with terms of 18 months or longer.
The No Penalty CD is another type of certificate of deposit that some savers may prefer. It’s a fixed rate CD with no fees for early withdrawal. Right now, the APY is set at 0.99% for 9 months. Like the Classic CD, you can open it with $0. It also compounds interest daily and will automatically renew at maturity.
Here’s the beauty of the No Penalty CD: if you so wish, you can ask for an early withdrawal and get back your entire deposit and interest without having to pay any fees or penalties at any point after the first six days of funding your CD.
#4 Ally Bank Interest Checking
For those who’d like to look into an interest bearing checking account, Ally Bank is offering the Ally Interest Checking account. Here’s what you’ll get with this account:
- Earn a 0.50% APY if you maintain a balance up to $15,000.
- Earn interest that will jump to 1.15% APY if your balance is above $15,000.
- Pay no ATM fees.
- Get free bill pay and online banking.
- Receive a free debit card, unlimited check writing and free checks!
- Get free electronic fund transfers, cashier’s checks and more.
- Get access to customer service, 24/7 via phone or online chat.
Ally Bank Has Accessible Customer Service Options
This bank has other notable features that should contribute to your satisfactory banking experience with them:
- They’ve got great customer service: they live in the modern ages as they have options for email, online chat, and a 24/7 phone number! If you need to mail in deposits, you can also send them in through snail mail.
- If you want to review your transactions, know that your account history will show activity going back 18 months. Also, you’ll be able to download transactions into popular money management software programs like Quicken.
- You can also set up automatic transfers, which can bring you closer to your savings goals. With Ally Bank, you can set up auto transfers between your online savings and money market accounts, with the transfers being credited immediately.
Although Ally Bank doesn’t offer checking accounts right now, their selection of savings products with good rates makes it a favorable contender in the banking space.
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{ 10 comments… read them below or add one }
I formally had a GMAC account so it is now Ally.
All and all it seems pretty good, I cannot complain. There service seems fine when I call. The look and feel of their website is not bad. I also have an ING account and I think I prefer their website slightly over Ally.
There are rumors that there may be some issues with their strength, but like the article says, if you are under $250K don’t worry about it.
At the end of the day I can recommend Ally.
Is the 250k limit going to revert to 100k anytime soon. Or does it look like the 250k insurance is here to stay.
Ally bank is such a dominant force right now on the internet on so many financial products – it’s quite impressive.
Ally is making a big push in Canada now. This is how I found your post by looking for more information on them. There rates seem very competitive but I always worry about the customer service side of things.
I worry that they are just trying to buy customers with fancy marketing campaigns and high rates only to be back to normal in 6 months time.
I hope the rates stay high because I think I might take advantage and close my ING account.
Thanks for the information.
It’s nice that they’ve got a higher CD interest rate than many competitors, but it’s still a shame that so many banks are offering such low options. If only I had invested into a nice CD 5 years ago! Still, it’s good to see things on the rise again, and I guess I can’t complain with 2.0% in comparison to some of the other options out there.
I am really impressed with Ally Bank. I have opened 5 accounts with them and could not be happier. The No Penalty CD is a no brainer to park your money in the short term.
I feel strongly that Ally Bank is where the future of banking is. It always blows me away that we have these large buildings with like 5 people in them and huge vaults like they are holding all your money right there on site. Why are we still walking into banks to make deposits and process transactions? We should be paid digitally and move our money digitally. You can always head to an ATM if you really want cash.
Is the 250k limit going to revert to 100k anytime soon. Or does it look like the 250k FDIC insurance is here to stay.
Good phone service until you call at midnight…I understand most folks wouldn’t consider calling at that time, however, I went with them because it fits my work/life style. I called, and it looks like all 2 people in the call center are playing ping-pong at that time, because I’ve been holding for the past 4o mins (phone’s on speaker) and their prompt is telling me someone will avail in 2 minutes, 40 mins ago. Laughs! Don’t believe the 24/7 thing.
I just don’t understand why banks charge for providing overdraft protection for accessing my own money from my own savings account. I am glad Ally is setting a better standard for others to follow.