Ally Bank Review 2012 – Best Online Savings Account

In May 2009, GMAC Bank changed its name to Ally Bank. GMAC was once part of General Motors, which is where it got its original name as General Motors Acceptance Corporation. It provided automotive financing for General Motors since 1919, and in 2001 it opened its consumer-facing banking unit, called GMAC Bank. With the issues in the automotive industry and the financial crisis, it’s easy to see why a bank associated with the two would have a difficult time getting consumers to trust it. Which led to GMAC Bank changing its name to Ally Bank in 2009. Over time, through the TARP program, the U.S. government has accumulated a 74% ownership stake (as of Jan 2012) in Ally Financial (the parent company of Ally Bank).

Since its recreation, Ally Bank has worked hard to associate itself with simple, transparent banking products at competitive interest rates. You’ve probably seen one of its commercials on TV by now, but if not, here’s one that I think sums up its brand positioning very well:

Now that you know how the bank positions itself, it’s time to look at how Ally Bank measures up.

Is Ally Bank Safe?
You can usually trust a bank of it claims to be FDIC-insurance, but I think it’s always prudent to go directly to the source to check since it’s so simple. A quick Google search shows that Ally Bank is FDIC insured. BankRate gives Ally Bank a 5-star Safe & Sound rating and places it in the 90th percentile of banks. In March 2012, Ally Bank failed the Federal Reserve’s financial stress test. This test simulates another financial crisis similar to 2008 and sees how a bank would be affected. For example, if the stock market crashes, GDP falls, mortgage interest rates rise, and oil prices rise, would the bank have enough capital to survive? The Federal Reserve determined that Ally Bank would be severely stressed if this were to happen. However, I don’t believe that this reveals any risk to the consumer. As mentioned, the bank is FDIC-insured, plus it’s majority-owned by the U.S. Government. In other words, you’re money is about as safe as it can get (up to the FDIC-insured limits). Therefore, I think it’s safe the conclude that Ally Bank is a safe bank to use.

Ally Checking Account
The interest rates offered on the Ally Bank checking account have fallen since I last reviewed Ally Bank in 2011, but the rates remain competitive, especially since rates have fallen at most banks since then. Ally Bank offers 40% interest on balances below $15k, and 75% on balances above $15k. MyBankTracker shows that there are about ten banks willing to pay a higher interest rate on a $5k balance and two paying more on a $15k+ balance. However, as you’re probably aware, interest rate isn’t all that most people look for in a bank. The reality is, any inconvenience that a bank causes is not worth the additional interest at all. On top of its above-average interest rate, Ally offers a ton of other benefits that many the account juicy. How about no account minimums and no monthly maintenance fees? Check. Too many banks have been piling on the fees over the past few years so it’s always refreshing to see a bank sticking to its commitment to keeping fees low, and transparent. You’ll also get a debit card and free checks with your account. Free checks are another perk that used to be common, but is now becoming scarce. You will also never pay ATM fees in the U.S. because Ally doesn’t charge an ATM fee, and it will reimburse any fees you pay to other banks to use their ATM. This is a huge perk because it allows you the freedom of not having to find your own bank’s ATM, without having to pay for that benefit.

Ally Certificate of Deposit
Ally Bank offers a variety of Certificate of Deposit options. They have a High Yield CD yielding 1.02% over 12 months and a no-penalty CD, which allows you to withdraw penalty-free, yielding 0.93%. These rates are competitive with other banks, but guess what? CD rates suck right now. It wasn’t that long ago when CDs and online savings accounts were yielding 5%. Anything less than 2% is pitiful. Because of this, it’s not really worth discussing Ally’s Certificates of Deposit since nobody cares right now.

Ally Bank Online Savings Account
Now we finally get to the offering that I think makes Ally Bank great. When it comes to Ally Online Savings Account interest rates, you’re earning slightly than you would at its #1 competitor ING Direct, but this different is insignificant. The big difference in rates you’ll notice is between Ally Bank and brick & mortar banks (Chase, Bank of America, Wells Fargo, etc.). As with all savings accounts, you’ll be limited to six transactions per billing cycle, as federally mandated. However, the Ally Bank Online Savings Account has no minimum deposit amounts and no monthly fees. Best of all, once you’ve opened one Ally Savings Account, you can open as many as you’d like. While this new account is basically a sub-account, it will have its own account number and you can give each account a nickname. This is how I track the progress of my personal finance goals, and it integrates very well with the Mint.com Goals feature.

Ally Bank Customer Support
Before more previous Ally Bank review, I hadn’t yet interacted with Ally customer support. Nearly a year later, I’ve now interacted with Ally support on two separate occasions. Both times I called, I was able to speak with a customer support member within one minute of dialing the number. Ally Bank prides itself in having very low wait times, and prominently displays the expected wait time on its website. I wish more companies would take note of this practice. In both instances, the first person I spoke with was able to resolve my issue and I was on my way within five minutes. That’s the way support is supposed to work.

Ally Bank eCheck Deposit Feature
I’ve definitely been spoiled by the check deposit feature in the Chase mobile app. I simply open the app on my phone, take two pictures of the check I want to deposit, and it’s done. Ally’s eCheck Deposit feature isn’t quite as refined or convenient. However, it’s a step in the right direction. Depositing checks to an Ally bank account used to require mailing in checks. With Ally eCheck Deposit, you can now scan checks from your home or office to deposit into your online Ally bank account. However, I found the interface to be finicky and the total process took a lot more time than I’d like. For most home users, the process of scanning checks to their computer to upload is going to take longer in general than snapping photos with a smartphone. Luckily, Ally seems to listen well to its customers and I expect the interface to improve and the process to become more streamlined over the next year.

Ally Mobile Banking Application Coming to iPhone and Android
The Ally Mobile Banking iPhone and Android applications were expected to debut last year, and I must admit, I’m quite disappointed with the slow roll-out. However, I’m very excited about the features that it will be bringing. In my opinion, Chase’s mobile app is by far the best of any I’ve used, and it looks like Ally has used their app as well because it will be offering many of the same features. Ally expects to release the first version of its Ally Mobile Banking app in April 2012. This version will include the standard features, such as being able to find ATMs, view history, and transfer money between accounts. Later in 2012, Ally is expected to integrate eCheck Deposit and electronic bill-pay, which are features that I eagerly await.

Ally Bank 2012 Review Rating

While Ally Bank still has a few areas to improve, mainly its mobile banking offerings, it does most things right. I recommend it to all of my friends who are looking for a better way to organize their savings into specific-purpose accounts. It’s very seamless to transfer between my brick & mortar banks, and my Ally accounts. If Ally Bank sounds like it has what you need, I absolutely recommend checking it out. I consider it to be the best online savings account currently available.

Note: Ally Bank Routing Number is currently 124003116