Updated. If you are looking for a flexible alternative to a megabank account with tiny interest but convenient ATM network, here is my review of the Ally Interest Checking Account which I use in conjunction with the Ally Online Savings Account and also Ally CDs. I think they represent a reasonable compromise from your neighborhood credit union with only a few ATMs sprinkled across town. I’ve used this combo for years, and here are my experiences:
User Interface. Below is a screenshot of the main page after logging in (click to enlarge). I can see all of my accounts and their balances at a glance. The overall design is clean and minimalist, and it was recently updated to be more mobile-friendly.
Customer Service. Ally Bank differentiates itself with their customer service. First of all, they are available 24/7 at 1-877-247-ALLY (2559). When you use their smartphone app or log into their website, you can see the wait time beforehand. Even better, if you don’t want to call them you can just use their Live Chat feature.
Security. Ally Bank supports two-factor authentication with security codes sent via either e-mail or text message. They ask for a security code when you log in from a computer they don’t recognize. However, if you’ve logged into that computer before with a security code, they may not ask you again and you can’t choose to have two-factor authentication to always be in effect.
Awards. Ally Bank has won “Best Online Bank” from Kiplinger’s Personal Finance magazine in 2014 and “Best Online Bank” from Money Magazine from 2011-2014.
FDIC Insurance. Ally Bank is a member of the Federal Deposit Insurance Corporation, FDIC Certificate #57803. As with other FDIC-insured banks, this means your Ally deposits are insured by the FDIC up to $250,000 per depositor, for each account ownership category.
Funds Transfers. With no physical branches, online savings accounts should have maximum flexibility as they are often secondary accounts (given most megabank checking accounts pay either no interest or a sad 0.01% APY). Ally Bank allows you to link any other external bank account using the standard routing number and account numbers. As long as you initiate the transfer before 7:30 pm Eastern Time, the transfer will take 2 business days. You can link up to 20 different accounts (it used to be unlimited; but other banks limit to 3; I have 7 myself).
So if I initiate a transfer on Monday afternoon by 7:30pm ET, the money will be debited first thing on Tuesday, and credited to the destination account first thing Wednesday. But know that if you initiate on a Saturday, you’ll get the same result. Even bank computers really don’t like working weekends, it seems. Overall, free transfers within 2 business days during the week is about as good as it gets for online banks.
The transfer limits are also relatively high. On my accounts, I see that I have a $150,000 daily limit outbound and $250,000 daily limit inbound, with a total monthly limit of $600,000 outbound and $1,000,000 inbound. Keeping in mind that all savings accounts from any bank are limited to six withdrawals per month.
ATM Rebates. As of August 15, 2015, Ally Bank will no longer offer unlimited ATM rebates in the US. Here is the new structure:
- Ally Bank continues to not charge ATM fees on their side of the transaction.
- Ally Bank has added the Allpoint ATM network, with locations such as CVS and Walgreens pharmacies, Target stores, and 7-11 convenience stores. (Certain other online banks like Capital One 360 Checking also partner with Allpoint).
- Ally Bank will now limit ATM fee reimbursements to $10 per statement cycle for fees charged by other institutions or ATM owners nationwide.
This is definitely a reduction in the benefit, but honestly I was surprised that it lasted so many years. Ally eliminated their international ATM rebates in August 2011. I used it a few times at a Las Vegas casino at $5 a pop; can you imagine their annual cost if someone did that every few days? For me, if I can find convenient ATMs that charge around $2.50 each, that means I can still go 4 times a month. Their online app also has an ATM locator that works pretty well (see below) .
I’ve made a few ATM withdrawals at random ATMs, and the surcharges have been credited at the end of the month as promised. (I wish they were credited immediately.) International ATMs are not eligible.
Free Overdraft Transfers from Savings. The checking account pays less interest than savings, so it is best to open both and keep as much money as you can in the savings. The Ally Online Savings account pays 0.99% APY as of 7/14/15, and is one of the places I keep my emergency cash reserves.
With their free Overdraft Transfer Service, Ally will automatically transfer the required funds from savings if your checking goes negative. I usually use this service whenever I write a relatively big check or make a large transfer:
Ally transferred an amount equal to a round number near the overdraft amount plus $100. Alternatively, you can set it to auto-transfer a preset amount over if your checking balance dips to a certain threshold. Remember, you can only do 6 withdrawals from savings each money due to banking regulations.
Mobile check deposit. You can use the Ally smartphone app to deposit checks using your smartphone camera. (This is in addition to using your computer scanner and/or free postage-paid deposit envelopes.) I’m not sure if this is the same for everyone, but my deposit limit is $50,000 which is higher than many other electronic deposit programs. I’ve used the app to deposit multiple checks without issue. Screenshot below.
Mobile app. Available for iOS and Android… you can do all the important stuff – see transactions, transfer funds, deposit checks, pay bills. It can remember your username, but you must type in your password every time. I usually just use my Mint app for checking balances, as that only requires a 4-digit PIN. The overall design is acceptable, and the ATM locator is helpful to find those free AllPoint ATMs or stores that allow cash back with purchase with no fees.
Paper checks. Even though they are an online-only bank, Ally still provides free paper checks. You get a set of 50 to start, but you can always order more online for free. Cashier’s checks are free as well.
Paper statements. If you prefer physical statements via snail mail, you’ll be happy to know that Ally still offers those free of charge. Of course, you have the option of paperless statements as well.
Ally Perks. Ally discontinued their Ally Perks Debit Card Rewards program in 2013.
- Current interest rate: 0.60% APY for daily balance $15,000 or more, 0.10% APY for daily balances under $15,000 (last checked 7/14/2015)
- Interest Compounding: accrued daily, compounded daily, credited monthly
- Minimum to open: $0
- Minimum requirements to avoid monthly service charge: None
- Number of external bank account links allowed: 20
- Routing Number: 124003116
Bottom line. The Ally Interest Checking Account is a solid offering with with no monthly fees, no minimum balance requirement, ATM fee rebates (up to $10 per statement cycle), free online billpay, and the ability to use the savings account as a free overdraft source. Additional features like a flexible funds transfer system and solid 24/7 customer service help differentiate themselves from the competition.
I would highly recommend pairing this account with the Ally Online Saving Account, as you can keep the majority of your fund in the savings account at a higher interest rate. You can then set up the savings account as a free overdraft source, allowing you access to all your funds with no fees to worry about. Ally also has certificates of deposit which offer competitive rates at times.