Ally Personal Savings Bank Review – Is it Your Ally?

One of the first things you should do before opening a savings account on any bank is to see if it is FDIC insured, and Ally is, so cross that off the list.

The next step is to see if you are losing any money by opening the account on that bank, so check the annual percentage rates for savings accounts for several banks. And Ally has that covered too. On their website, they will show you the rates from several banks. As of February 20, 2012, Ally has the best rates compared with HSBC Advance, ING Direct, Bank of America, Chase and Wells Fargo. So opening a savings account with Ally will let your money earn more.

The catch is, these days all online banks are offering comparable rates, which is higher than most top tier brick and mortar banks we named in above paragraph.
Ally Rates

Other Things You Might Want to Know

Ally declares up front that when you open a savings account, you will be limited to six withdrawals per month, which is really a federal requirement not limited to Ally – only other banks note it in fine print where you may or may not notice it. The Ally savings account also has $0 maintaining balance, so even if you have managed to empty your account, it will still be there waiting for you.

Another thing you might want to know about Ally savings accounts is that it is pretty easy to open a second, third or as many savings account with Ally. It sort of opens a sub-account for you under your main account, so little paperwork is needed. This is a great option for people who compartmentalize their budget into pieces of savings, like a trip to Hawaii, a new car or furniture. Also, even with this kind of segregated budget, Ally works well with Mint.com, an online financial software made to handle your budget, financial goals and strategies, or anything else to do with your money. You might want to check out Mint.com if you are opening an Ally savings account, just to explore your options.

Pros of Ally Personal Saving Accounts

1. No Minimum Balance Required. You can open an account with 0 balance. Clearly a crowd puller.
2. No Monthly Fees. Although all online banks are fee-free these days.
3. No Penalty for Early Withdrawal From CD. This is one good reason I should move my CDs to ally.
4. No ATM fee. They should allow it or face withdrawal.
5. Email Suggestions to Move Money. Ally Bank will email you every time you have an opportunity to earn more money by creating a new account. Put more money in.

Cons of Ally Personal Saving Accounts

1. Not in top tier for rates. Everbank, Tiaa direct and Aurora banks have higher rates than ally.
2. Horrible reports of software glitches. There are reports of errors on Ally bank’s online portal .
3. Deposits and Withdrawals Can Take Longer. Outsourced customer service is termed as “not-friendly” in various online forums.
4. No smart phone app. Seriously?
5. Some hidden fees. Like overdraft fee for example is written only in fine prints where you have to click ‘accept’ during registration. Generally hidden from general view

The Verdict

While Ally Savings bank has a variable APR which presently stands at 0.84%, it is still one of the highest, at least in California. It also has no minimum for the variable APR to apply, unlike other banks that have a $0 to $999 range with a lower APR, and another APR for $1,000 and up. With that fact alone, it makes sense to put your money in Ally, especially since it is FDIC insured.

A common complaint even in customer reviews in the Ally website is that the bank transfers take so long to be completed. This is one area that can be a deciding factor – long bank transfers are so out of place in this digital age that it can be frustrating if you are on the receiving end of the bank transfer, and this is not even considering the situation where you are on the transferring end of the transaction.

The easy integration of Mint.com is also an added bonus, and if you are already familiar with what Mint.com can do, this will be a great help in your micro-financial management.

What is most reassuring about Ally is that it doesn’t look like it is trying to hide anything from potential customers. Trust seems to be highly valued with Ally, and anyone can see it by the way they display information on their website – sometimes even information other banks would not like you to see. With that kind of management style by operating with everything on the table, it will be difficult to resist the trust Ally offers you, without giving up the same amount of trust to Ally.

Still I am not happy with the rate they are offering and really scared with the issues with their website and customer service. Clearly they do not spend as much money as other online banks like American Express Saving or Capital one spends. Their software contains much more bugs in it.

The rate offered by ally is overshadowed by Everbank, Aurora Bank and Tiaa Direct. I wouldn’t put my money in Ally savings bank at the moment. We are giving “Avoid” rating to Ally Saving bank.

Caution – Using saving banks as investment is foolish as with such low interest you actually lose money to inflation. You should only put your emergency fund in saving accounts or the fund which you want to park for shorter duration. As I have done for my home buying fund.

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