Ally Bank Review: No-Fee High-Yield Savings

When you’re deciding where to put your money, it’s important to consider a few factors, like what fees you’ll have to pay, how much interest you can earn on your savings, and how easy it is to access your money.

Ally is an online bank that scores well in all of these areas — although since it’s online-only, you’ll need to be okay with no access to in-person branches.

If that sounds all good to you, here are some other things to know about Ally Bank.

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Overview of Ally Bank

Ally Bank is an online-only bank that offers high-yield rates on savings and certificates of deposit (CDs) that are higher than traditional large banks and the national average. 

They are, however, comparable to other online-only banks like SoFi, Wealthfront, and Marcus, and hybrid banks such as Capital One. They are FDIC-insured, so your deposits are federally insured up to $250,000 per account type.

Ally offers checking, savings, and money market accounts, and a variety of CDs. The savings and checking accounts generally have no minimum balances, no maintenance or overdraft fees, a network of fee-free ATMs, and up to $10 monthly reimbursement for out-of-network ATM fees. 

Ally also offers self-directed investment accounts, robo-advisory automated portfolios, and (for a fee) managed investment accounts, along with debt products such as credit cards, mortgages, and auto loans. 

Ally Bank Spending and Savings Products

Ally Bank has a checking account, referred to as a “Spending” account, which connects to their high-yield savings account. They also have other savings products, like a money market account and CDs.

Checking (“Spending”) Account

Ally’s Spending Account is a checking account with no minimum balances, no monthly maintenance fees, and no overdraft charges. 

Like most other checking accounts, it has a low interest rate (0.25% APY), so you won’t be earning money on your deposits. But that’s to be expected since the account is for spending rather than saving.

Because Ally is an online bank, there are no branches — but you can withdraw funds without fees within the Allpoint network of more than 44,000 ATMs (there are even no-fee ATMs located in some McDonald’s, Target, and CVS stores). 

Ally will also reimburse you up to $10 per month for out-of-network ATM fees. 

Savings Account

Ally Bank offers a high-yield savings account (HYSA) without balance tiers — which means the rates don’t depend on you reaching a certain balance level. Plus, there are no other requirements like making a certain number of direct deposits — however, you can only make a maximum of 10 transactions per month. 

The savings rate is 4.00% APY, which is much higher than traditional banks — the national average is currently 0.46%. While Ally’s savings rate is comparable to many other online savings accounts, it’s not necessarily the highest. 

To help you save better, Ally has “booster” products that can automatically shift “safe-to-save” cash from your spending account into your high-rate savings account. There are also Ally bank buckets that allow you to separate money within a single account — such as having a bucket to save for a vacation, a bucket to save for a car, and a bucket to save for college. 

READ MORE: Checking vs. Savings Accounts: What’s the Difference?

Money Market Account

The Ally money market account shares many features with the savings account. The rate is relatively high (currently 4.20% APY) and has a limit of 10 transactions or transfers out per month. 

However, the difference is the money market account has a debit card for unlimited ATM withdrawals (fee-free in the Allpoint ATM network and $10 monthly reimbursement for out-of-network ATM fees). 

Like the spending and savings accounts, Ally’s money market account has no minimum balance requirements and no maintenance or overdraft fees. 

Certificates of Deposit

Ally offers three different styles of CDs: 

• High Yield
• Raise Your Rate
• No Penalty

Ally’s High Yield CDs range from three months to five years. The rate changes depending on the term you pick, from 3.00% to 4.50% as of publishing.

One risk of traditional CDs is that market rates could increase while your rate is locked — causing you to miss out on a better rate. As a solution to this, Ally offers Raise Your Rate CDs that allow you to upgrade your rate once for a two-year CD or twice for a four-year CD. 

Another risk with traditional CDs is that there are penalties if you withdraw the money before the end of the term. Ally offers an 11-month No Penalty CD that allows you to withdraw without penalty at any time after six days of account opening.

READ MORE: Are CDs Worth It?

What We Like About Ally Bank

We like that Ally Bank is focused on helping you save. They offer high interest rates on their savings accounts — currently 4.00% APY, which admittedly isn’t the highest out there, but is still much higher than the national average for savings accounts.

There are also no minimum balances, no monthly maintenance fees, and no overdraft fees, so you don’t have to spend money to save money like you do with some traditional bank accounts.

There is a large network of no-fee ATMs through Allpoint, and you’ll get a $10 ATM fees reimbursement for up to two out-of-network ATM uses per month.

Finally, the spending and savings account buckets can make your budgeting much easier, since you can create subcategories within the same account — such as having a bucket dedicated to saving for a home down payment or college tuition.

What We Don’t Like About Ally Bank

While Ally’s savings accounts have high rates, some other online banks offer even higher APYs. For example, SoFi offers a 4.00% APY and Capital One offers comparable interest rates to Ally but also has in-branch services. 

Speaking of which, Ally Bank is online-only, with no option for cash deposits — so if you like in-person banking, you’re out of luck. However, you can deposit checks through the app and make online transfers from external accounts. 

Lastly, the short-term CD rates are quite low, although the money market account is a strong alternative.

Who Should Open an Ally Bank Account?

If the following apply to you, you’d likely enjoy banking with Ally:

• Comfortable with remote deposits and transfers
• Don’t require in-person customer service
• Satisfied with getting a high APY without chasing the absolute highest APY out there 
• Like the idea of having buckets to save up for different purposes

Who Shouldn’t Open an Ally Bank Account? 

If the following apply to you, Ally Bank likely won’t suit your needs:

• Need to make regular cash deposits
• Prefer an in-person branch
• Want a high interest rate over any other features

Alternatives to Ally Bank

There are plenty of other banks out there if you feel like Ally doesn’t suit your needs. Here are some alternate options, depending on what you’re looking for in a bank.

For higher interest rates: Wealthfront or SoFi

Wealthfront is currently advertising a 4.50% APY with no minimum balances or fees. Note that Wealthfront is not a bank itself, but partners with other banks to provide FDIC insurance. 

SoFi is offering a 4.00% APY on their SoFi Checking and Savings Account, although with some requirements for making regular monthly deposits. 

For branch access and cash deposits: Capital One

Capital One is currently advertising a 4.25% APY with no minimum balances or maintenance charges for its 360 Performance Savings account. 

Not only is this comparable to Ally, but Capital One also has approximately 750 branches (but only in a handful of states in the Northeast and the West South Central states). It also offers options to deposit cash in CVS and Walgreens stores.

For unlimited ATM reimbursements: Charles Schwab

Charles Schwab offers unlimited out-of-network ATM reimbursements worldwide — so if you travel a lot or need regular ATM access, you can save a lot on fees. There are also no monthly service fees, overdraft fees, or account minimums.

Their Investor Savings account unfortunately has a much lower APY than you can get with Ally, but you can get much higher APYs on their CDs. 

The Bottom Line

Ally Bank is popular for a reason: it’s excellent for people who want to prioritize saving, as it has minimal fees, high interest rates, and the ability to set up savings buckets for specific goals.

But it’s not the only online bank out there, so don’t be afraid to shop around to find the best bank account for you.