I’ll admit I was a little nervous about opening an account with Ally. First, I never worked with a bank that was online only. Second, I didn’t know much about Ally bank, although I had heard of it. Could I trust it with my money?
And I know I’m not alone in my concerns. That’s why I’m writing this review. After all, this was new territory for me, and new can be scary. Add to that, entrusting your money to an unknown entity … well, you definitely want to go slow and do your research thoroughly!
My concerns about online banking
While a lot of people have switched to online banking for almost all their needs, many are still hesitant about that. Add to that an online ONLY bank like Ally, and how do you know it’s even legitimate?
With new reports of companies being hacked all the time, your number one concern is probably security. As well it should be. Especially after the huge Equifax hack that just happened and affected so many of us.
So how can you protect your hard-earned money while still giving it a chance to grow? Here’s the thing. Your data is on computers anyway, whether you bank online or not. So it’s all about doing your research, as I will soon explain.
⇒ NOTE: You can skip this next section if not interested in Equifax hack or freezing your credit.
Recent Equifax hacking incident
Even this latest Equifax hack, involving over 140 million people, contained standard personal financial data kept on everyone. Whether you have an online banking account or not.
Equifax is one of the three official companies (also Experian and Transunion) that keep your “secure” credit information for others to check on. The data they keep also go into calculating your credit scores that get used for so many other things.
If you’re worried about the recent Equifax hack or your credit in general, you can place freezes on your credit. I think it’s a smart idea. This stops (or should stop) people from opening new accounts in your name.
How to place a credit freeze with each company
Here are the credit bureau websites that let you put a freeze on your credit. You need to go to each one separately:
And PLEASE check for any fees associated with freezing your accounts. Some states are free. But there may be a small fee allowed in your state for each bureau when placing, temporarily lifting, or removing the freeze.
For your convenience, this chart combines the fee for all three bureaus based on the state you live in: Costs of Freezing Your Credit. But if you’ve been the victim of identity theft, this service is free in every state with the right proof.
NOTE: At some point, you may need to temporarily lift the freeze. Like when you want to open a new credit account or take out a loan. And besides the possible small fee, dealing with the freeze / unfreeze can take a few days. But the peace of mind may be well worth the extra effort and any fee.
Also, you may want to enroll in Equifax’s free one-year credit monitoring. You might have been part of the 140+ million whose data was stolen. Just read the fine print about whether you’re giving up your right to sue if needed. Also, Transunion offers a FREE (at least for now) credit monitoring service.
One more thing: I was just assured by Equifax that there is no auto renewal after the year for their free credit monitoring. But, again, I would check carefully to make sure, since some folks are saying it is (or was) there.
⇒ And now back to my review of Ally Bank …
Before opening an account with Ally
First, I want to make it clear that I was only looking to open a savings account or CD. So I can only review my personal experience of Ally based on opening an account with Ally. And on the option I finally chose to best met my own needs. I didn’t experience other parts of the bank beyond customer service.
Here are the things I looked for:
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- Who are they? – I looked up their history and how long they’ve been in business. Turns out they were once a company called GMAC, related to auto loan financing. I happened to know that company from my banking days, so this helped.
- Are they a legitimate, accredited bank? – Yes. The FDIC has a site that explains how to check.
- Will my money be FDIC insured? – Again yes. That means you’re covered (in the event of a bank failure of some kind) up to $250,000 for each bank category — savings and CDs being one category; IRAs a separate category. I used FDIC Bankfind to check and actually spoke to the FDIC to confirm some of this.
- Online reviews from real customers – I believe in lots of upfront research. So whatever bank you are considering, don’t rely on just one source. And even with reviews, make sure there are enough to give you a real sample — and that they look legit.
- Ease of using the site – I used to work in online system development. And so I’m especially mindful of what it feels like to actually use a site. I liked their website “navigation” but everyone is different. So play around to see if it works for you.
- What kinds of products do they offer? – I wasn’t sure if I wanted a high-interest savings account or a CD. But I want to keep the money liquid (ready to use). So I chose their No Penalty CD. Meaning, if I want to withdraw all my money (after 6 days), I will still get to keep all the interest I’ve earned so far.
- How do they calculate interest? – They calculate it daily, and even post it online so you can see what you’ve earned so far. But, you should note that the interest they advertise is the APY (Annual Percentage Yield). The actual Interest Rate is a bit less. But that’s ok. Here’s why:
⇒ Why Is My Annual Percentage Yield Higher Than My Interest Rate?
- Penalties, hidden fees – Remember to read the small print! In the case of my CD, there really is no penalty. I just have to withdraw all of it if I need the money early. No partial withdrawals for their No Penalty CD. Again, always check each type of account carefully.
Dealing with customer service
When you log in, they actually give you the wait time if you want to call customer service. I don’t remember ever seeing that. And what they said the wait time was going to be was true.
Customer service was pleasant and helpful, even though I kept asking question after question. Some more than once just to be sure. The customer service rep also gave me some useful tips to help make signing up easier.
While doing my research, I did see some online complaints about customer service. And other aspects of banking with Ally. So I am not in any way guaranteeing everything will always be perfect. I can just say that I had a good experience all around.
Safety Tip: Beware copycat sites
From the FDIC website:
“Watch out for copycat Web sites that deliberately use a name or Web address very similar to, but not the same as, that of a real financial institution. The intent is to lure you into clicking onto their Web site and giving your personal information, such as your account number and password. Always check to see that you have typed the correct Web site address for your bank before conducting a transaction.”
My conclusions about opening an account with Ally
As I’m sure you can tell by now, I had a very good experience and wound up opening the 11 Month No Penalty CD. For my purposes, it helps keep my money liquid and available, while earning some interest. This may or may not work for you.
Also, nothing I say in this review should be considered a recommendation for Ally Bank as opposed to any other well-known, accredited FDIC insured online-only bank. As of yet, I haven’t tried any others. This is simply a report on what happened when I opened a CD account at Ally Bank.
Disclaimers
I am not affiliated with Ally in any way, apart from being a new customer. As you see, there are no direct links to Ally on my site. And I get nothing at all from them if you wind up using them as your bank.
Since my account is relatively new, I will come back to update this based on my real experience as time goes on. As of now, I can say I had a very good experience. But that doesn’t guarantee that you will. Or that this is even the right bank for you.
Everyone is different. So do your research carefully. And don’t be afraid to ask LOTS of questions — to both the bank and your search engine.
Please feel free to share your experience opening an account with Ally or anything else about your banking experience!
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UPDATE: I promised to come back and let you know how things are going with Ally bank. I’m still happy. Even added a regular savings account, some other types of CDs, and an IRA savings account. I especially like that they raise the rates on savings accounts without you needing to ask.
And if you want to close your no-penalty CD and start a new one at a higher rate, you can do that too. As they say … no penalty. But I did find the process working with customer service a little more difficult as they put you through some security tests to make sure it’s you. Then again, I want my bank to do that.
Also, when I needed to transfer money to another bank it was all done online and easy. But when it comes to an IRA that you want to take as a disbursement and transfer, just know that you need to call customer service right after you do that online and tell them if you don’t want it sent as a check but rather transferred to another bank. You can of course just wait for the check.
Hope that helps!