I switched online banks in May and now that I’ve had a couple of months with my new bank, Ally, I feel like I’ve experienced enough to write a well-rounded and informative review.
Ally is everything you need out of an online bank. They do everything adequately and there aren’t any huge misses in their approach to online banking.
Let’s run through the review thumbs up, thumbs down style so you can see what parts of Ally I like and the parts that need work.
Thumbs up: Web interface
Personally, this is the most important priority of an online bank. I’m going to be relying on this site to manage my money so it better be pretty on the eyes.
Some of the positives: I like the color scheme of purple, black, and gray. It’s relatively easy to navigate and find what you need even if it’s your first time looking for something. It’s not overloaded with unnecessary features and links. Only the vital information you need is located on the account home page. They use screen space efficiently without being bare or cluttered.
Thumbs up: Easy to create multiple savings accounts
I wrote a post about this topic a couple of months ago. Currently, I use 3 savings accounts – general savings, emergency fund, and house fund – and it takes less than 2 minutes to create a new account. You can also transfer between your accounts instantly. Having 3 different savings accounts allows me to track my savings goals and I can put aside money for an emergency fund that is untouchable.
I wish they advertised the ability to create multiple accounts a little more, but once you know how to create the account, it’s like riding a bike and you won’t forget how to do it.
Thumbs down: No daily running interest counts
I loved how my old online bank would keep a running total of your interest accumulated above your account’s information. I would check my account every couple of days and could see the progress of the account. It was like a morning coffee – it just made your day a little better.
Ally tells you how much your daily accumulated interest is , but they only list that number (which is usually too small to care) and then your total at the end of the month. This is a nitpicky complaint, but I use online banks because of their high interest rates so why not throw your customers a bone and show them how much they’re received in interest from one day to the next?
Thumbs up: Quick, simple transfers
Transferring within your accounts is instant and getting money to your external bank only takes a couple of days. An 8-year old could figure transfers out and you can even schedule transfers for reoccurring dates. This is great for automatically building savings by transferring, say, $50 a month in to your savings from your external checking account.
Thumbs down: No referral system
ING was all about getting you to tell your friends about their bank. They offered you and your referee money, promoted it on every page, and wanted you to know that they’ll hook you up if you tell your friends about them.
Ally’s main page has zero information about referrals. Nothing. Do they not want new members? Do they not want people to talk about their bank? Do they not want to give $10 to a new customer?
Fix this, Ally. I’ll tell my friends about you.
Undecided thumb: Checking account
I also opened an Ally Interest Checking Account in May, but haven’t had much experience with it since I’m abroad. They offer a healthy .50% interest rate on money in your checking account and offer a nice little bill pay feature.
Their biggest selling point is the debit card which offers no ATM fees. Since they’re an online bank, they don’t have ATMs, so you’ll see a small fee but it’ll be quickly refunded. This should be the gold standard for all checking accounts soon.
If I was in America and used this account more, I’m sure it would be a thumbs up, but we’ll have to leave that review for a later date.
Overall: A big thumbs up
Ally does everything you need, without beating you over the head with unnecessary features. Ally doesn’t bother me with e-mail and the one time I’ve called their customer service they were helpful and cheery.
If you’re switching from another online bank, like a new hair cut it’ll take some time to get used to, but after a couple weeks you’ll feel like you’ve been using their services for years.
They are a young bank so hopefully they’ll fix some of my nitpicky complaints soon, but if you’re looking for an online bank, Ally will fit your needs and leave you more than satisfied with what they offer.
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Hi Austin!
I’ve been meaning to ask you this since I first saw your posts on having an online saving/checking account. It’s great that they’ll be giving me more interest for my money then my current brick&mortar bank – but what is in it for them? Is there a service charge or any hidden fees somewhere? I guess it’s hard for me to wrap my head around sending my place somewhere abstract and having *it* pay *me* to keep my money – without seeing how it’s benefiting from it (blame it on my business background).
Also, now that you’ve started using another bank – how does it compare to your old one?
I’m thinking of going abroad in a few years so I totally love all the valuable info/advice your giving us. Keep up the awesome work!
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Austin Reply:
July 19th, 2010 at 9:18 pm
That’s actually a great topic for a blog post so I’ll elaborate on that within the day, but the great part about online banks is there are (usually) no hidden fees. You may have a limit on transfers within a month for a savings account, but the best and the one’s that pf bloggers like me talk about don’t have any fees.
I assume they make most of their money off getting people to sign up for loans, mortgages, overdraft fees, or CDs/money markets accounts which they can then use to loan out. Ally is a little different because they don’t offer loans/mortgages so my guess is a larger company owns Ally and just makes their money else where?
Great question though – I’ll write it down and see if I can dig in to it more in depth later.
I would give Ally an 88 and ING a 93. Is it much worse? Not at all, but there are some small things I miss. In the end, the 5 point difference is nothing and I really love a lot of things about Ally.
Where are you looking to travel to?
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Austin Reply:
July 23rd, 2010 at 12:08 pm
I contacted Ally about this. They responded:
“Our accounts are invested in long-term mortgages and real estate. Ally Bank does not engage in targeted sub prime lending activities, and information on the Bank’s level of loan loss reserves and classified loans is available on http://www.fdic.gov.”
Pretty interesting stuff.
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Hey Austin,
I recently switched to Ally bank as well – in my opinion for young professionals like us, the more online the better. I got a money market account through them though – they provide you with the same free checks and debit card, as well as 6 free transactions a month (federal limit on money market accounts) which is pretty cool, and you get the same interest rate as a savings. (1.29 currently) Only downside is not all atm fees are refunded, and no automatic bill pay. :)
I also switched to optionsXpress to check out their roth ira but it hasn’t been long enough for me to be able to say anything for sure about them. All I know is that the interface and perks seem pretty good.
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Austin Reply:
July 19th, 2010 at 9:21 pm
What are the benefits of the money market when the savings account is the same rate? If you need checks and a card couldn’t you get the checking account and then you’ll have your ATM fees refunded.
I’ve never looked in to optionsXpress but I’ve read a lot of good things – I’m sure you’re in good hands.
If you don’t mind me asking, what bank did you switch to Ally from?
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After setting up an acct with ally, I then initiated a fund transfer to ally (using ally’s online system). I called ally beforehand to make sure it would be ok since the 30 day time frame to deposit was approaching. I was ASSURED that as long as I initiated the transfer before 30 days, it was fine. I waited patiently for several days but received nothing from ally.. no e-mail, no phone call. I signed onto my ally acct. and now my balance showed a NEGATIVE dollar amount instead of zero. When I called them, they said my acct had been closed because I didn’t deposit money in time! BUT.. they had taken my money from my other bank! Incredulously though, they said at the same time that since the acct. was closed that they DIDN’T really have my money! My “old” bank confirmed the monies had been sent to ally. MORE calls to ally.. they have NO idea where my money is or how to get it back! I go into my “old” bank and they actually spend a LOT of time helping me figure it out although they had NOTHING to do with the problem. With the information (ACH tracking numbers that ally wouldn’t bother looking for) from my “old” bank, I call ally AGAIN ( I don’t even know how many times I called ally). This time (after mentioning perhaps banking authorities might be notified) they miraculously are able to find the money! I am STILL waiting for the money to be returned to my “old” bank. Funny.. their claim to fame.. being an ultra modern, high-speed, web-based bank.. sure seems like BS when you consider it has been over TWO WEEKS and I STILL don’t have my money back and they weren’t able to find, track, or identify ANYTHING! I had to go into an old-school, brick and mortar bank and have a REAL PERSON help me! So, an online bank may give you a little interest and allow you to use ATMs nationwide, but JUST WAIT until something goes wrong! THEN you will wish you had a REAL PERSON to help you! The winner here is oddly enough.. BANK OF AMERICA (my “old” bank)! haha! Caveat Emptor!
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Austin Reply:
July 28th, 2010 at 1:10 pm
I’m sorry for your troubles. No one ever wants to deal with a bank problem like that.
Did you not initiate the transfer the day you set up the account? I’m a little confused about that.
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Ally Bank’s web interface is technically unsound for these reasons:
- It doesn’t work with recent versions of any browswers
- It works with IE7, and IE7 can’t even be installed on a computer running Vista or later
- Instead of give useful messages like ‘your browser is too new…try x, y, z’, it just boots you to the login screen, over and over again
- It doesn’t allow you to login and manage your money
- Interest rate started at 1.5% when I opened my account, and now it is ~0.99%, why the volatility?
- “Registering your computer” to skip the challenge question step, simply doesn’t work, and hasn’t worked for over 6 months, using Chrome – why can’t their programmers put out a quality product in less than 6 months – it’s unconsciable for an online bank?
- Logging in process shows inconsistent behavior – are you sure your money is safe? Do you trust your money with people that aren’t paying for the technical talent it takes to program the interface website correctly? I don’t, not anymore – I stopped ignoring those technical pecadillos for the 1% interest rate.
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