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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Karmin is a renowned reporter for The Wall Street Journal so I decided to dive into a subject I didn’t know too much about. Besides, I write about money 3 times a week – and it doesn’t hurt learning more about your favorite subject.

The book is split into just 6 chapters, but is still 250 pages. Karmin discusses several aspect’s of the dollar including its rise to power, history, how it’s made, and impact on the world

With all of the negative media talk about the dollar recently, it was scary to read how vital the dollar is to the world’s financial health. Many countries outside of the U.S. rely on the dollar for trading and even Saddam Hussein’s palace had hundreds of thousands of dollars stored away in case of a financial emergency.

Here’s my thoughts on the positive and negative parts of the book.

You can tell Karmin has spent a better part of his adult life writing about finance for the WSJ. His inside stories and accounts of financial moments are really fascinating. For example, he talks in depth about the specifics behind the foreign currency market. I learned how popular this market is and that the amount of trading done on the forex market destroys the amount done on the regular stock market.

My favorite parts of the book were the information about counterfeiting. The amount of time and energy the government puts into thwarting potential counterfeiters is truly amazing. The specifics within the bill, the way it feels to the finger tips, and the specific weight are all meticulously discussed and reworked.

Readers also get an insider’s look at the Bureau of Engraving and Printing. These are the people in charge of making the dollars that are sent around the world. The security is tight and the BEP is actually a private company – charging the Federal Reserve around 5.7 cents for each dollar it creates.

The accounts of BEP workers trying to steal cash was my favorite part of the book. Any bills that are mistakes are to be destroyed, but occasionally workers try to steal them as they are awaiting their death. They usually didn’t get far, but the book actually had me laughing out loud at some of the creative ways workers tried to smuggle out money.

Besides, learning about the tangible money, it was fascinating to learn how much other countries rely on the dollar. For example, Ecuador, El Salavador, and East Timor have all been using the dollar for almost 10 years. This is incredible to me, and really shows how powerful the dollar is.

Other countries will only trade with dollars. So if a country called Austin wants to trade with a country called Morgan, Austin will change their money to dollars, and then to Morgan’s money. The dollar is the great equalizer in many trades around the world.

This is a picky choice, but I didn’t really care for stories about what made the dollar rise or fall. The last 1/3 of the book read rather slow for me and I found myself skipping sections because I wasn’t interested in what caused the dollar to fall in 1981. If you’re interested in the economics of the dollar, you’ll love this part, but I could’ve done without it.

The book isn’t for beginners so if you’re looking to learn more about money for the first time, I wouldn’t start with Biography of the Dollar. Some of the discussions about foreign exchange markets were over my head and I had to skip sections that seemed way too complicated for my interests.

I loved the parts about the tangible dollar, but would’ve liked to learn more about the history behind the dollar’s creation. Not the idea of the dollar, but the physical piece of paper you and I have in our wallets. Who’s idea was the dollar? What were some stories about its rise to what we have today? This was the most fascinating stuff to me, and I was disappointed the book left me wanting more in that category.

I would suggest The Biography of the Dollar to anyone who is intrigued by money at all. As the dollar loses power, it’s important to understand what we actually have in our wallets.

In 2006, only 66% of the world’s cash reserves were in dollars, compared to 71% in 1999. More and more people are holding their money in multiple currencies and this book will introduce you to a new way of thinking about your money.

If you’re not interested in the economics of the dollar, but are interested in the history of the dollar, then you’ll still enjoy the read.

It’ll be interesting to come back to this book in 25 years to see how the dollar’s place in the world has changed. Karmin and Biography of the Dollar does a terrific job of making sure you better understand the complexities of the dollar and will be able to react accordingly as the dollar’s place in the world changes over the next couple of decades.

Grade: 78 out of 100

Where do you think the dollar will be in 25 years?

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I started a Lending Club account last year and I’ve been really impressed by the company during my time there.

For those new to Lending Club, LC falls under the category of social peer-to-peer lending.

It can work one of 2 ways for the average customer. One, a person can apply for personal loans from other members to consolidate debts or help pay off any debts like credit card, student, or personal. LC offers you a cheaper interest rate than you will get else where, making it easier to pay off your debt.

On the side of LC, an investor can invest money in notes – meaning investing in people who are trying to pay off debts. You can choose who you want to invest in, as LC provides loads of information about the person behind the loan, or you can just insert your risk level (7% is low, 20% is high)and LC will choose notes for you.

Lending Club’s claim to fame is their great return return – a whopping 9.65%. To compare, the S&P 500 has averaged around 8% after tax over it’s lifetime, and ING Direct’s saving account is currently at 1.1%.

For investors, the notes are a minimum of 3 years and each is a minimum of $25. If you need to liquify your money, they provide a way to sell notes to other investors making it less risky for short term investors. To maximize return, you can easily choose to reinvest notes. When my principals and interest repayments reach $25, a new note is automatically purchased.

LC takes around 1% as a fee.

With social lending there is the risk of default loans. The default rate has been below 3% since 2007 and LC claims they’re on your side as they only accept 1 in 10 loans – meaning they’re trying there best to make it a safe investing place. Regardless, diversification of notes is your best bet to keep your return high.

My Returns After 5 Months

I started off last fall with a $25 free trial, but eventually invested $500 into 20 different notes.

How does it look so far? Well, pretty good.

I wanted to diversify so I went with a lot of notes – 20 notes, $25 each –  since I was fearful of someone defaulting.

(click to see specifics)

So far no one has defaulted and my average return is 14.24%. According to LC, my return compared to investors like me (under $1,000) puts me in the 81 percentile meaning my net annualized rate to date is higher than 81% and lower than 19% of all investors.

After 5 months, I’ve received $68.62 in payments – $22.35 of which is interest.

Who is Lending Club for?

Well, it depends on your situation. Are you drowning under debt? Then maybe you should apply for a loan.

On the other side, do you have some extra money floating around in a 0% checking account that you could do without for a while? The returns on LC’s loans are great, even with a default or two, you should be able to get much higher than any CD or savings account out there today.

I’m considering investing more of my money in LC notes since it’s so difficult to get a good return with CDs and interest rates. Maybe it’s just the investment vehicle you’ve been looking for, too.

Interested? Check out Lending Club today.

Have you had any experience with Lending Club? Leave your stories in the comments!

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Starting Out

The sign-up process was a little time consuming. It required printing out multiple forms, sending them through the mail, and a couple phone calls with Zecco’s customer service to ask some questions about some unclear instructions.

After the sign-up, transferring funds was fairly easy. The most common option is linking a bank account to your Zecco account, which can take up to 5 days. You can also wire funds from you bank to Zecco, send in a check, or transfer from another brokerage.

After around 3-5 days, you’re ready to trade.

Fees

Zecco was renowned for their commission free trades, but since March 2009 they’ve started charging $4.50 per trade which is a pretty good rate, especially if you’re a buy and hold customer. Options trades are also $4.50 with a $.50 contract.

If you have a $25,000 net equity balance, or make 25 trades a month, you get 10 free trades a month.

Otherwise, Zecco is straightforward with their business and great for novice or experienced traders who are looking to avoid unnecessary fees. There is no account minimum, service fee, or inactivity fee.

Zecco also hosts Roth, Traditional, and Rollover IRAs for just a $30 a year maintenance fee.

Trading

You can purchase stocks, options, and mutual funds directly from the trading center and they don’t make you jump through any hoops to get this process completed. There are five purchasing options: market, limit, stop limit, stop, and trailing stop.

I was happy with how easy it was to buy back in December, and selling was also a simple process. Allow three days after a sale until funds are available to transfer.

Zecco doesn’t automatically enroll you in automatic dividend reinvestment. You have to e-mail their customer service and state which holdings you’d like reinvested. Once this is done, it’s a fairly easy process, but I’d like to see this become much easier for customers to choose in the near future.

They also don’t do partial shares so if you’re dividend is not enough to cover a whole share it’s placed in your cash balance.

Site Layout

The site interface is my one complaint about Zecco. The trading center feels cramped and a little dated. The sidebar is also difficult to navigate and after a year it still takes me a while to find what I need.

However, my favorite aspect of the trading center is the “Positions” box which holds the stock information. The box provides not only the shares and current price, but also the price you bought the stock at, the profit and loss percentage, and the profit and loss dollar amount.

With this information you’re always up-to-date with how your holdings are doing and you don’t have to dig further into the site’s performance bar to find this information like some other sites.

The research area does a good job of answering questions and presenting information concisely. There’s no wasted space and it’s easy to find what you want. It could use a re-design to make it feel less dated, but their presentation of information here is stellar.

Conclusion

I would recommend Zecco to the new investor who wants to test out purchasing stocks or mutual funds for the first time. The price is right and their overall presentation will allow you to get some experience trading and handling stocks, without getting gauged by fees.

If you are a more experienced trader you may want to steer away from Zecco for your major holdings. If you are a stickler about website layout, you may find it a bit frustrating navigating Zecco’s site. The fact that they don’t offer partial shares is also a pain for more experienced investors who want to optimize their dividends.

But if you’re looking for an affordable discount brokerage for easy trading, Zecco is right for you.

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