A week or so ago I talked about how I had opened a new online high yield savings account with one of the personal finance blogosphere’s favorite banks, ING Direct. ING is great because of a variety of factors, but for me the ability to set up sub-accounts, and to budget using their automatic withdrawals to sub-accounts was the clincher. You can read more in depth about why I signed up for them HERE.
While I love the budgeting and other features of ING, I also wanted to open another account with a higher interest rate so that we could gain a bit more interest on our 8 month emergency fund while it sits around waiting for an emergency. Our 8 months of expenses is no small amount, and having the money at a bank with a higher interest rate means hundreds of dollars in interest every year.
So to continue my research for the next few weeks I decided to write some quickie reviews of some of the more popular and higher interest rate banks that are out there. Today I’m reviewing Ally Bank.
Ally Bank: Where Did They Come From?
Ally Bank just popped onto the banking scene a short while ago, but what a lot of people don’t realize is that Ally Bank is the new face of an old name, GMAC bank. They changed the name in May of 2009 at a time when they were giving the company a facelift, and giving a promise to be the customer’s “ally”. Thus the name. So far their competitive rates are good enough for me to say that they’re off to a good start. Be my ally by giving me more money!
Is Putting My Money With Ally Safe?
One of the first things you should ask when signing up with a bank is, “Will my money be safe if I bank with this company?”. With Ally your money will be safe and sound because the bank is FDIC insured, and has been since August 2004 – under their old name of GMAC. If you deposit your money and the bank goes under, you’ll be fine – as long as you don’t have more deposited than the FDIC insurance will cover. Currently that amount is $250,000 per depositor.
Features Of An Ally High Yield Savings Account
Ally Bank’s High Yield Savings Account has a good number of features. Here are a few of them:
- Open with $0
- No minimum balance
- No monthly fees
- Ability to create sub-accounts with different names and account numbers. (like ING, great for budgeting sub-accounts!)
- Daily compounded interest for maximum earnings
- 24 hours a day, 7 days a week customer service at 1-877-247-ALLY (2559) for 24/7 assistance or by e-mail at customercare@ally.com
- FDIC insured up to $250,000
- Six withdrawals or transfers per statement cycle. (mandated by the government)
- high level of online security
Opening An Account With Ally Bank
While I haven’t actually opened an account with Ally yet, my understanding is that the process is pretty simple. It’s a 5-step process. You’ll need to provide some basic information (including your SSN and drivers license), and they’ll do a hard credit pull. Then you just set up your initial deposit, set up a few account options and you’re set to go. No big deal.
Other Ally Bank Options
In addition to it’s competitive high yield savings accounts Ally Bank also has other options available including classic CDs, no penalty CDs (ability to withdraw early with no penalties) and money market accounts. All of them seem to have rates that are currently competitive. For more details about their other account options, click here.
Conclusion
At the time that I wrote this, Ally Bank offers some of the highest interest rates in the country and all of their accounts are FDIC insured (to find current updated rates, go here). Add to that their other solid account options, no fees or minimums, good security and 24/7 customer service and you have a solid bank offering. If you’re looking for a good high yield savings account where you can put your money, I think Ally Bank should be near the top of your list. I know it’s near the top of mine now as I continue my search.
Do you have any experience with Ally Bank? How do you like them? What are the pros and cons of their accounts? Leave us a note in the comments!
Resources: Ally Bank High Yield Savings Account
- An Emergency Fund Will Help Reduce Your Risk Of Financial Catastrophe
- Summer Savings Series #6: Saving tip: Save Like You're Paying Off A High Interest Debt
- WT Direct Bank (Wilmington Trust) Review: Online High Yield Savings Account
- Dave Ramsey's 7 Baby Steps: Step 1 - $1000 To Start An Emergency Fund
{ 18 comments… read them below or add one }
They definitely look interesting! I may have to open up an account with them after my co-op closes.
FFB´s last blog ..My Experience With myFICO
The sub-account feature is great, but comes at a cost. If you go to https://www.checkingfinder.com/ you’ll find high interest checking accounts that pay a much higher rate (though their restrictions will be different). A quick search turned up Royal Bank of Missouri with is currently paying 4.3%. So nice features like sub-accounts aren’t without a cost. That said, there is also a “bookkeeping/time management” cost associated with the required “10 Debit Card Purchases”.
All this is to say, know your costs (be it lost interest or an extra time requirement) before diving in.
Matthew´s last blog ..Gov’t up 40% on Citi share conversion
I’ve had Ally for a few months now with a high savings amount. The password it asks you to create needs more explanation but the customer service is friendly and available. So far I’m very pleased with my decision with putting my EF in it. I also opened an online Emigrant Direct savings account and are very pleased with their incredible security. Both these banks are worth looking into.
Gotta be honest, I started reading this web-site a few months ago and loved the Christian insight it gave when it relates to financial issues. However, I must admit I am dissapointed that the posts are turning into one corporate endorsement after another. I realize one of your goals with this site is to make some supplemental income but I think it has strayed from what it used to be just a few months ago.
Keith, I’m in the middle of researching online accounts right now, and while the post does have an affiliate link, I don’t consider it to be completely a “corporate endorsement”. I actually am researching these accounts to figure out what’s the best one for me, and hopefully the information contained in the post will help inform someone else out there about what their options are as well.
That being said, the post is completely open to comments – pro or con – about Ally Bank and people’s experiences with them. I’ll be happy to publish any of those comments here.
Don’t worry, while we may be publishing bank account reviews, we won’t be getting rid of our Christian financial content anytime soon either.
Thanks for the feedback.
Hang in there Keith, I understand your point of view. Just keep in mind what you mentioned about monetization, also what Pete mentioned about doing reviews, then also consider the fact that writing killer posts is very time consuming and motivation can come in spurts; so sometimes writing a straight up review is a necessary break.
Keep watching, my guess is that Pete will be delivering high quality content, from a biblical perspective, long into the future!
Matt Jabs´s last blog ..The Modern Pocketbook – A Spending Journal and a whole lot more!
I have experience with Ally Bank. They will not open a savings account for a young adult with no credit history. (I didn’t type bad credit history, I typed no credit history.) Why would we want to support a bank that forces customers to use credit before they will accept savings deposits? When I called them on it, their pathetic explanation was that “our investors require that policy.” Screw their investors and screw Ally Bank for its FICO cram down tactics.
Mr. ToughMoneyLove´s last blog ..More Adventures as a Shopping Skeptic
Another reason to support local banks and credit unions I suppose.
Mr. ToughMoneyLove, I understand the frustration and I don’t like the FICO credit score game either. But it was to avoid situations like this that I got a credit card while I was in college. I paid it off monthly and used it to build a strong credit history. Like it or not, a strong credit history is more advantageous than disadvantageous.
Patrick´s last blog ..Student Credit Card Tips and Best Student Credit Cards
Peter: Some choose to play by the Man’s rules. Others prefer to seek to change the rules when the Man is evil. In this scenario, FICO is the Man and it is evil. Ally is its helper. Capitulating as a college student doesn’t change that. There are banks that compete with Ally that do not force FICO’s rules on young adult depositors.
The strongest “credit” history is positive cash flow and positive net worth, things that FICO ignores. Lots of folks who had “strong credit history” are now in foreclosure. How does a credit card in college help that?
Mr. ToughMoneyLove´s last blog ..More Adventures as a Shopping Skeptic
Peter: I don’t think a credit card in college helps anyone in foreclosure. But strong financial principles learned and reinforced in college may have prevented foreclosure in the first place.
Just like any other tool, credit cards must be used and applied properly. The same goes for learning how to use a checking account, debit card, or any other financial tool. Ally Bank would fall under “any other financial tool.”
Patrick´s last blog ..Where to Open a Roth IRA Account
This spring I opened 5 CD’s with GMAC in an effort to diversify my
holdings with different financial institutions as the concern over
bank failures was increasing.
Through the GMAC / ALLY transition they effectively reduced my 2.65%
APY to 2.6% APY on my CD’s. This is BULL S$IT Ally. I am Finance
Major and I know how to calculate NPV equations.
ALLY will never receive another penny from me. I am staying with ING.
ALLY you are crooks!!!! v
Actually, it is just the opposite. I just opened a CD with ING and they dropped my rate on the CD from 1.65% to 1.55% even though they had all my information, I had finished registering my account and the rate was not changed till 6 days after they had all this information.
I opened Ally bank CDs and got the rate they told me. ING has lower rates and needs to learn from Ally Bank’s 10 day rate guarantee. I am moving all my money to Ally from ING.
I think Ally is truly setting the standard for all the other Banks. They have a really easy to use website and I love their 24×7 customer service. Unlike the other banks, you can talk to someone by just pressing 0 any time and can usually talk to someone almost instantly rather than holding endlessly. Thank you Ally!
After reading this article I opened an account excited to save my money in different sub-accounts earmarked for various purposes. I could not find how to open these sub accounts and asked someone in Live Chat. This is the reply that I got:
“Welcome to Ally’s Live Chat. Thanks for joining us! A Customer Advocate will be with you in a moment. You are number 1 in the queue. Your wait time will be approximately 0 minute(s) and 8 seconds. Thank you for waiting.
You are now chatting with ‘Marta’
Marta: Thank you for chatting with me today. How can I help?
Chris: I signed up for my account with the intention of using sub-accounts for my savings – how do I go about setting up these sub accounts to allocate money for different purposes?
Marta: We do not offer sub-accounts at Ally Bank.”
So now I am confused – did they stop offering sub-accounts and if not how do I go about opening one?
maybe they don’t call them sub-accounts – my understanding is that they are separate savings accounts that you can open (as many as you want) and name for different savings goals. Not sure if the chat agent was confused because of that?
why does a savings account require a credit check? you’re just dhepositing money, no checks are being written. This I dont understand.
They don’t actually do a credit check. They call it a soft pull to verify your identity, so some fraudster is not out there opening accounts in your name!
I love Ally bank and have slowly moved all my money over to them. Much better compared to Bank of America, ING and E-trade who I used earlier.