One of baby boomer’s worse nightmares is needing income but not having a source that actually pays any interest. Interest rates have been low for quite some time (too long for many), and finding the highest interest rate for your savings accounts is a must. One viable option is the online bank Ally. If you’re looking for a competitive rate online, then you might want to check Ally out. Here’s a review of Ally bank why they might be the best online bank for you.
Quick History and Terms
Ally bank is the new product of what used to be GMAC bank. A year ago ALLY bank broke off from the GM name because of complications with GM in today’s world. GM has been receiving lots of bad press due to their Bailout from the government, but like any competitive corporation, ALLY made the smart decision to maintain shareholders wealth and back out of a sinking brand name. Now ALLY bank is offering some of the highest yield accounts available that are also backed by the FDIC. Being backed by the FDIC simply insures up to $250,000 of your money by the Federal Government in case of an emergency. You can receive much more than $250,000 worth of coverage by opening an account with a death benefit to your spouse, or by opening an account for your child. With these extra accounts added, you can achieve total coverage of around 1.5 million depending upon your family structure.
Opening Your Account With Ally
Opening an ALLY bank account is similar in process to any typical bank, except for the precautions they will take because of no actual face to face contact. The one major difference is the use of your FICO score, other banks will check your FICO score as well, but ALLY could possibly deny you based upon your FICO score where other banks may take more variables into consideration. After opening your initial account whether it is savings or checking, it’s relatively simple to open another account simply using your login name and password.
Different Investment Tools
Ally bank offers a variety of options for your money to be invested in:
1. The first option is an online savings account.
The savings account has no minimum deposit as well as no minimum balance which appeals to most people because there will be no hidden fee’s on your statement. The savings account also is amongst the highest yields, but you are only able to make six withdrawals without penalty (penalty is $10) because of federal regulations. So this is no different than any other online bank.
2. The second option is a Money Market account.
The money market account is very similar to the savings account except for the fact that you may receive a check card that is linked to the account. You will receive a slightly lower APY, but have much more availability to your funds. Your check card may be used at any ATM, and ALLY will pick up the fee that the bank charges for the withdrawal. With the money market account you’re also limited to the six withdrawals per period (these six withdrawals refer to online electronic funds transfer, telephone transfer, not to your ATM withdrawals).
3. ALLY also offers an interest checking account which is very similar to the money market account but with totally unlimited withdrawals.
On all the above mentioned accounts, deposits do not count against your six transactions.
4. The final option that ALLY bank offers is certificate of deposits or CD’s.
They have high yield CD’s that are very competitive against the market, as well as no fee CD’s. The high yield CD has no minimum deposit, and gives you the option to automatically renew, or request for your interest to be received upon maturity as income. The no fee CD gives you the option to withdraw the full amount, principle and interest, at any point in time before the maturity date with no penalty. This no fee CD will have a slightly lower APY, but will keep your investment more liquid dependant upon your immediate needs without penalty.
Ally Bank Review Conclusion
Overall, ALLY bank is a convenient option that offers competitive rates with no minimum balance, as well as being backed by the FDIC so you know that your money is safe. Beware that they will measure you based upon your FICO score when opening an account, as well as your initial deposit may take slightly longer than a local bank because of the processing time needed. Most likely you will also be sending out of state checks to ALLY, so do not be surprised if it does take a couple of days longer for your check to show up on your statement. There customer service is easily accessible with 24 hour access via online as well as through telephone. I do not personally have an ALLY account but called their help line and was pleased to have no wait time associated with all of my attempts.
Have you opened an account with ALLY Bank? If so, please share your experience.