Ally Bank, once known as GMAC bank, was previously a part of GMAC Financial Services. This bank has had a name and “image” change and has opted to revamp and improve their brand. They’ve moved in the right direction by taking some positive steps and promising a good variety of banking products at very competitive rates, while making sure they provide strong customer service. Today, 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 .89% (Updated 1/09/12) 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 0.40% 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. Also note that you’re allowed six withdrawals or transfers per statement cycle at no cost, but you’ll be charged a small fee for each transaction over the limit.
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. Your account is insured and protected by the FDIC.
#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 .89% variable APY (Updated 1/09/12) 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 Three 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 1.00% APY (Updated 1/09/12) for a one-year term. In comparison, the Orange CD at ING Direct has a lower APY for a term of 12 months. Note as well, that the 12 month CD was listed as one of MONEY Magazine’s “Best Money Moves” of 2011.
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 .91% for 11 months (Updated 1/09/12). 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.
Finally, there’s the Ally Bank Raise Your Rate CD, which gives you the option to increase your interest rates if you find yourself facing a rising interest rate climate. There are 2 versions of this particular CD — the 2 year and the 4 year CDs. The differences between the two versions:
- The 4 year CD has a higher rate than the 2 year CD (of course).
- The 4 year CD allows for a two time rate increase, while the 2 year CD allows for a one time rate increase.
#4 Ally Bank IRAs
The online savings and CD options from Ally can also be purchased and managed through an IRA. These products are pretty much what we’ve discussed above, but besides having them available through regular taxable accounts, you can also house them in tax advantaged individual retirement accounts (SEP IRA, Roth IRA and Traditional IRA options). Here’s more information about the IRA products:
#5 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. (Updated 1/09/12)
- Earn interest that will jump to .80% APY if your balance is above $15,000. (Updated 1/09/12)
- 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.
Copyright © 2009 The Digerati Life. All Rights Reserved.
{ 22 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.
This May, I recently have been hit with one of Ally’s computer gliches. I had opened an initial account about one month ago and because it was going well, I decided to open another account with them.
Then the huge problem arose!
Ally bank has a feature that if you verify an account with the same test deposit numbers than it automatically initiates a transfer from an external bank into your other account.
For example,
1. Account # 1- You open your account with $1000.00 and you have verified your test deposits.
2. Account # 2- You decide to open another account and use the same test deposits but this time only want to open your new account with $100.00,
Then
3. A transfer of 1000.00 will initiate to account # 1.
Leaving you with no solution and alot of overdraft fees from the external bank account.
Ally bank made it clear that they don’t have a gliche in their system, and I informed them that if I wanted to transfer $1000.00 from my external account into my Ally bank account then I would have specifically did just that. But this was not the case. Instead you use the same test deposits of $0.45 and $0.22 and this is what happens.
Has anyone else incurred this type of problem because I do not believe that I am the only one.
For professional purposes, Ally bank should have at least tried to care about this glitch or the customer but that was surely not the case. They were dumbfounded!
What else can I say, I’ve been duped by this bank?
Folks I would not open an account with these theives under any circumstance. I made that mistake and still paying for it. Seems they could not automatic deposit my first paycheck in to the account. so I overnitghed at cost of $52 the check. Seems there was no one there on Saturday to accept the check so It was not delivered unitl Monday morning. Tuesday my Account showed the check deposited and my available balance was what I was expecting to be, so I started paying my bills. Next morning I now see a negative current balance and multiple 9.00 fees.
Called the bank and they informed the check had a 10 day hold on it. So here I sit being payed but not able to access the funds. Next up they start sending out bill pays for bills I expected to have money for. They sent one out the 21st of the month and it has yet to arrives and tomorrow it will be late. Look at my account today and they sent another one to the same place that was not authorized. I have closed the savings account and just waiting for the hold to finally clear and I am gone from this bank. I would not trust ally to take out my trash let alone handle my money.
I actually left ING Direct and joined Ally because of one thing…the ability to assign beneficiaries. I can’t set up beneficiaries in ING Direct and I checked with Ally to make sure I could with them. They told me I could, so I set up an account with Ally. Beneficiaries are a big deal to me!
GMAC, Ally Bank … whatever.
You really care for the name or the integrity of that business?
It’s neither the name nor their advertisements that make a decent company. (well, agree, for a short time it may as well account for some none-lasting success) In fact, it’s a firm’s intention and action that will decide on their sustainability.
That being said, I cannot think of any company that blackmails other companies to favor themselves, that will ever last. We have (written) evidence and will take this proof to court – agains ALLY BANK – for blackmailing legitimate established businesses as “SCAM”. Are they that desperate? Wasn’t aware of it but – it’s good to know!
Whoever considers ALLY BANK as their – … whatever, may we only wish you the best!
Anyone else enjoy the Ally commercials as much as I do. The pony commercial cracks me up.
Good marketing… not a whole lot I can say about the back personally as I have not experience with them. I have seem some great deals and rates posted by ally though.
I love the Ally commercials. They do have some of the highest CD rates in the US and are constantly on the top of the list of bank that are tracked for having the best rates. Personally I would choose Ally Bank over any other major bank, especially BofA or Chase.. especially Chase!
Horrible customer service. A service rep named Brandy from the Kansas office rudely hung up on me when she could not provide a solution to my issue. GMAC/ Ally withdrew a double payment in error from my checking and refused to provide a refund. I tried reaching higher level management but was told repeatedly that they could not take my phone calls. Apparently their phones only make outbound calls! I was told that Neil Johnson and Randy Godfrey, both of the Kansas facility would return my phone calls and address my concerns. I’m still waiting. Lots of sarcasm and nasty attitude from their “executive” customer service reps.
Huge let down — seems like it would be an easy enough situation to rectify, but this was beyond GMAC’s scope of customer service ability. I spent lots of time and energy on the phone. I was put on hold for ridiculous lengths of time, surely a stall tactic. AVOID this company.
How do I find out my interest rate (for a loan)?
DO NOT open an account with this bank. I have been frustrated by some banks in the past but I NEVER wrote a bad review on any of them. This one is definitely different because it is the most bizarre experience. I had to receive large sum of wire transfer from overseas that was on a time constraint and because the customer representatives gave me wrong information, I had to get it wired twice, and because of this, the fund got recalled. Ally bank just closed my account after this happened and when I explained what had happened, why it got recalled because of the fact that the customer reps gave me the wrong information and I had to get the money wired twice, they still blamed it on me. They treated me like a criminal, talked down to me and over me, while shifting the blame on me and never apologizing or trying to rectify the problem. The manager, David Pakosh was the rudest most despicable person I ever dealt with with a bank. He practically told me to shut up while I was trying to explain what had happened and blamed it all on me and NEVER once accepted that Ally’s staff gave me the wrong information to screw up the transaction that should be so simple.
If they deal with customers this way that put in large sums of money in the bank and handle large sums of money this way, imagine what they will do if it is small? I will never deal with this bank again. That manager needs to be fired because he obviously doesn’t belong in the service industry and I have never been more furious of how I was treated and how my money has been treated.
Alright. I wish you did a review of US Bank because they suck. From the bad experiences some people describe here, I have to say that my beef is with US Bank and their horrible customer service. I had a simple question and I got different answers from 3 different bankers. If I followed any of their suggestions, I would have wasted my time completely as one insisted I even visit my local branch. Ultimately, I found out that they could not deliver the service I was asking for to begin with. US Bank is ridiculous and you should take your business elsewhere. Ask hard questions before signing up anywhere!
Long story short, GMAC Canada last year was unable to send my bank a simple letter outlining the details of my dealings with them (a lease and a purchase financing). I’m trying to not sound bigoted, but the drones at the call center, some of which had trouble with English, were the cause of major frustration in their inability to understand what I needed. It’s complicated. By the time I found someone in North America who could figure out what was going on, and she was very helpful, it was too late. As a result, my mortgage refinancing fell through and my finances are a complete mess now. Anyone who thinks I would touch Ally with a ten-foot pole now may be interested in buying swampland in Florida.
I just noticed Susan’s rant a little above mine; sounds like the same people. I actually did get through to some sort of supervisor in India once, “Walter,” but all I got from him was so much sarcasm that I finally hung up.
Ally also provides access to Conventional, FHA and VA loans through gmacmortgage.com!