You may have heard of Ally Bank and their great online savings accounts, but Ally Invest is a much more recently created branch of the larger Ally company.
With this expansion into the mainline of online brokerages, Ally has turned from just a Ally Bank for deposits to something a full service bank with one of the most competitively priced brokerages in the United States.
Ally Invest Account Options
Ally offers their investments in three options – self-directed trading, Ally Invest managed portfolios and forex and futures. If you know where you want to put your money and how, the first option is for you. Forex and futures are for experienced traders so we suggest you don’t go there if you have no prior knowledge. If you just want to start investing and don’t know how, the Ally Invest managed portfolios will do the hard work for you.
Self-directed trading or as the company puts it – for the do-it-yourself investor – deal with stock and exchange-traded fund (ETF) trades. Ally Invest stocks trade for a flat fee of $4.95 and is the lowest in the industry with no account minimums.
There’s a lower rate of $3.95 under the Ally Invest Volume/Balance Pricing but for that one needs to do 30+ trades per quarter or maintain a daily balance of $100,000 or more.
Ally Invest’s bonds sell for $1 per bond, and it has to be a minimum of a $10 investment. Mutual funds can be bought and sold under this option for $9.95 per trade.
Ally Invest Managed Portfolios
This is your go-to option if you don’t know what investments will work for you. You can create a plan for yourself keeping your financial goals in mind and the company will recommend an investment portfolio for you with a diverse mix of ETFs that suit your goal.
You can pick the options offered by the company or can customize them as you wish to suit your risk and return balance. An account can be opened with $2,500 (that’s the minimum). You don’t need to deposit any money to open an account, but you will need $2,500 to start investing and there is no minimum balance requirement.
The annual advisory fee charged for this service is 0.30%, so if you just have $2,500 in your account, you will be paying a monthly fee of $0.62. The math is pretty simple.
Forex and Futures
This is for the advanced investors. Ally Invest allows you to trade over 50 currency pairs including gold and silver in real time. Live forex spreads are available on the Ally website so you can keep track of all the numbers. The tight spreads reduce your trading costs and increase your profit potential. And, there are no hidden commissions.
The minimum you need to start trading Forex is $250, but the company recommends that you start with $2,500.
For trading futures, Ally offers a fully customizable trading platform and trading fees are as low as 45 cents per contract.
Other Product Options
Since Ally Invest is part of the greater Ally company you can manage all your banking and investing products inside of one login account. The other financial products available through Ally include:
- Savings Accounts
- Checking Accounts
- Money Market Accounts
- Certificates of Deposit
- Auto Loans
- Home Loans
- Credit Cards
If you are looking for one place to take care of all your financial needs, you will be hard pressed to find another institution who can combine all of this in a completely online environment.
Ally as a company was called the ‘Best Internet Bank’ by the Kiplinger’s Personal Finance Magazine in 2017 and won the Dealer’s Choice Award from the Auto Dealer Monthly in 2016. And speaking of autos, the company has a long history that ties it inextricably to cars.
Ally has been in the business for a 100 years, as they say. The company started with auto finance and has since grown to cover online banking, credit, lending and wealth management.
They opened their first office in New York City in 1919 as GMAC, a division of General Motors (GM), to help dealers finance and maintain their inventories. They added four more offices to their portfolio later that year in Detroit, Toronto, San Francisco and Chicago and formed the Motors Insurance Corporation (MIC) in 1939.
During World War II, the company helped in the war effort as the financing arm of GM which supplied submarine engines, trucks, tanks and airplanes to the Allies. And at home, they worked hard at keeping financially troubled railroads in the business by renting and financing locomotives.
Over the next few years the company expanded their financial services covering locomotives, household appliances and payment plans for customers to buy cars. Eventually, they also started dealing with comprehensive coverage for vehicles. By 1977, the company had already financed their 75 millionth vehicle.
By 1980, Ally Bank had added home loans to their kitty. They bought the Bank Of New York’s lending unit in the late 1990’s which lead to the creation of their corporate finance division. The GMAC Bank was set up in the 2000 and by 2009 it was renamed as Ally Bank. By 2012, Ally Bank had clocked one million accounts.
Ally was granted financial holding company status in 2013, and the company changed its name to Ally Financial in 2010. This was also the time Ally Auto came into being. The company’s auto finance arm was transformed into an independent finance provider offering dealers and vehicle makers a large portfolio of comprehensive services.
The Ally Cashback Credit Card was launched in 2016 along with their direct consumer home loans. And come 2017, after acquiring TradeKing Group inc., Ally launched Ally Invest.
Ally Invest keeps its focus firmly on the customer and strives to provide the perfect plan through online banking, credit and lending experiences, auto financing products and services alongside wealth management.
Ally Invest Alternatives
If what Ally Invest has on offer does not work for you, there are other wealth management platforms that offer some unique features that are not available to the traditional brokerage platform that Ally offers. These companies include:
- Betterment – Betterment is the leading robo-advisor in the United States. While the Ally Managed Accounts service is similar, Betterment has streamlined the process and lowered the cost of entry. Learn more in my review of Betterment.
- LendingClub – LendingClub is not a brokerage but they do offer retirement accounts. Instead of investing in stocks you invest in small loans to individuals of which you can purchase very small parts of the loan and benefit from the interest paid by the loan payments.
- Fundrise – Fundrise also is not a brokerage but a means to invest in real estate without owning the properties. You can invest in real estate developments and own a piece of a real estate investment trust. They make entry easier than any of their competitors and offer retirement accounts.
Like we have said before, Ally Invest offers you the lowest rates in the industry. When you consider mutual funds ($9.95) or broker-assisted fees ($20), Ally Invest is the cheapest option for you. And most of the accounts you open with them have zero minimum deposit.
The company is known to have one of most exhaustive research libraries and uses interactive media and visual slides for a better user experience. You can analyze anything and everything including earnings, transactions, study graphs and a variety of market data.
Ally Invest offers Ally Invest Advisors for an additional fee, which is what the Ally Invest managed portfolios are about.
Lowest rates in the business, that’s great. But there’s a catch. Ally Invest charges an annual fee of $50 if you don’t have a minimum account balance of $2,500 and if 0% commission trades have been made within a year. If you have less than $2,500 in your account you must make at least one trade a year or be charged $50.
The $0 minimum deposit option looks great on paper but if you are to start trading you have to invest something at least and roughly, around $2,000 is a safe figure to look at if you are considering substantial trade.
Customers have also pointed out that Ally Invest has a slightly tedious sign-up process on its site and doesn’t allow you to check all details unless you share your personal information and social security number to create an account.
Keeping all other options available in the market in mind, Ally Invest offers the best rates when it comes to investing. With the rise of more firms dealing with similar services in the online brokerage space, Ally Invest has maintained its edge with its competitive rates. They remain the cheapest option while providing a great platform and remarkable customer service.
The platform is easy to use and extremely user-friendly so you won’t have to break your head to create an account with them and they are constantly evolving to make things all the more easier. So, log in and start investing.