Ally Bank Review: Could This Digital-First Solution Work for You?

Is Ally Bank the best online bank? What are the pros and cons of Ally Bank? Read our review to find out if this digital-first financial institution that offers way more than just online checking and savings accounts is made for you.

What Monito Likes About Ally Bank

• Interest-earning checking account puts your money to work for you, even while it’s easily accessible
• A wide variety of features and financial products make it a one-stop shop for finances
• Online educational resources to help you make the most of your money

What Monito Dislikes About Ally Bank

• No option for cash deposits to checking or savings accounts
• Hefty overdraft fees (though free overdraft protection is available)
• Currency conversion fee when using your debit card at an international ATM; no way to transfer cash to an international recipient

Ally Bank Review - All you need to know

Named “best online bank” by Money Magazine for 2019, Ally Bank is a digital-first financial institution that offers way more than just online checking and savings accounts. Ally customers can also use its services to invest, take out an auto or home loan, and save for retirement.

Even if you’re just in the market for a regular deposit account, Ally has a strong argument in its favor: it offers an interest-earning checking account, putting your money to work for you at a competitive rate. (At the time of writing, accounts with a daily balance of less than $15,000 earn 0.10% APY, and those with $15,000 or more earn 0.50%.) Like many other digital banks, Ally carries no opening deposit or minimum balance requirements and doesn’t charge a monthly maintenance fee, making it an affordable way to manage your money; you can also set up online savings and money market accounts to help you meet your financial goals.

However, Ally Bank checking and savings accounts are only open to U.S. citizens and permanent residents, and the company does charge a foreign transaction/conversion fee for cross-currency exchanges. There’s also, importantly, no way to make cash deposits into your account — so if you work for tips or otherwise utilize cash often, Ally may not be right for you.

Depending on your personal spending habits and preferences, Ally could be a match for your banking needs. Read on to learn more about its services.

Ally Bank fees & exchange rate

Ally Bank dispenses with many of the most common fees you may expect, like monthly maintenance fees and account balance minimums. There’s not even a minimum opening deposit; you can get started without funding your account at all.

That said, Ally Bank does assess certain fees, which they’re up front about. These include:

• Returned deposit items (i.e., bounced checks): $7.50
• Stop payment: $15 per request
• Overdraft fees (maximum one fee per day): $25 
• Currency conversion fee: up to 1% of the transaction
• Excessive transactions (from Online Savings and Money Market accounts): $10 per transaction
• Expedited delivery of debit cards or other items: $15
• Overnight bill pay, delivery by mail: $14.95 per payment
• Same-day bill pay, electronic delivery: $9.95 per payment
• Outgoing domestic wires: $20
• Account research fees (if this service is requested): $25 per hour

A note about overdraft fees: Ally Bank does offer an overdraft transfer service, which allows you to link your Interest Checking account to an Online Savings or Money Market account. If you make a transaction that overdrafts your checking account, money will be transferred from the linked account in $100 increments to cover the debt — for no charge. That said, these transfers do count towards your total allowable number of transactions, and overdraft protection transfers in excess of that limit will be charged the excessive transaction fee as outlined above.

Credibility security

Ally Bank is an FDIC member, and deposits are insured up to the $250,000 maximum as they are at other major banks and financial institutions. In fact, Ally has a bit of a leg up on its competition, since many other online-only options aren’t members themselves, but rather have deposits insured through partner banks.

If you’ve got a hefty nest egg, Ally offers ways to have more than $250,000 insured — for instance, by pooling money in a joint account or setting up a trust with multiple beneficiaries. (Click here for full details.)

Ally Bank averages a 4.4-star rating with more than 7,000 user reviews, and carries less than 200 complaints on the Better Business Bureau website. The company has responded to and sought to resolve the complaints of each BBB user.

How to open an account with Ally Bank

Opening an Ally Bank account can be done entirely online and takes only about five minutes. Although the bank does use your credit information to verify your identity, this soft check won’t impact your credit score.

However, to open a banking or investment account with ally, you must be a citizen or permanent resident of the United States of 18 years of age or older. You must also have a Social Security number (or Taxpayer Identification number) and a valid U.S. street address, which may be verified with additional documentation such as your driver’s license.

Ally accounts can also be opened over the phone, by fax or mail. You can call 1-877-247-2559, or print out your application and submit it as per the instructions in the document.

Ally Bank accounts and key features

Ally Bank offers its customers several different account types to choose from, and its suite of features makes using an online-only account simple and convenient. Here are the current accounts and key features at Ally Bank.

Interest Checking

Ally Bank offers an online-only Interest Checking account, which earns interest at a rate of 0.10% APY for those with a daily balance of $15,000 or lower, and 0.50% APY for those with a daily balance of $15,000 or above. You can access the money in your account using your linked debit card, as well as through its network of more than 43,000 fee-free ATMs across the United States. (Ally also offers a $10-per-statement-cycle reimbursement of fees accrued by using out-of-network ATMs.) Free cash back at participating point-of-sale terminals is also available, and you can order standard checks free of charge.

Money can be deposited into the account via direct deposit, mobile check depositing, online transfers, wire transfers, or checks sent by U.S. mail. However, there is no way to deposit cash into your Ally Bank account, so keep that in mind if you deposit cash frequently.

Online Savings

Ally Bank’s Online Savings account offers earnings of 1.60% APY on all balance tiers, and, like the interest checking account, carries no monthly maintenance fees or minimum balance requirements. However, like all savings and money market accounts, users are limited by federal law to 6 or fewer monthly withdrawals, including digital transfers and online transactions. (Transactions at an excess of this limit will be charged a fee, as outlined above, of $10 per transaction.)

Money Market Accounts, CDs, and Other Investment Options

Ally Bank offers a wide range of other account types to help you diversify and expand your financial portfolio, including money market accounts, CDs, regular investment accounts and IRAs — as well as a suite of online educational resources to help you learn how to use them all effectively.

Trust Eligibility 

Non-IRA Ally Bank accounts can be opened or converted for a trust, which can help you with your estate planning and ensure your wealth is transferred to your loved ones as according to your wishes after you’re gone.

Free Online Bill Pay

You can set up online bill pay from your Ally Bank online portal to help you get your money where it needs to go, free of charge. 

Transfers via Zelle and Ally Skill for Amazon Alexa

For sending money to friends and family, Ally partners with Zelle and Ally Skill for Amazon Alexa to facilitate easy transfers. That said, there is no way to initiate international transfers via Ally Bank at this time.

Going international

While Ally Bank is a great option for U.S. citizens primarily dealing with U.S.-based expenses and financial needs, it doesn’t make international exchanges especially easy or affordable. A currency conversion or cross-border payment fee of up to 1% of the total transaction is assessed when you use your debit card internationally or purchase items from outside of the country, and there’s no way to transfer cash to an international recipient directly with Ally. Of course, you can always use a specialist money transfer and funding your transfer via ACH with money in your Ally account. To find the best money transfer specialist to send money from the USA, check our comparison tool here.