Ally Bank Review

October 4, 2009

Ally Bank

Ally Bank,  formerly known as GMAC Bank,  is an online bank designed with the needs of the consumer in mind.  The bank offers an online savings account, certificates of deposit products, and a money market account – all which are FDIC insured.

About Ally Bank

Ally Bank was built on the foundation of GMAC Financial Services.  They took their years of experience in the industry as GMAC, combined with the knowledge that the consumer has different banking needs in our existing economic conditions, and morphed into Ally Bank and a new way of doing business.  Accounts can be opened without a minimum deposit required, and you do not have to maintain a minimum monthly balance, either.  When Ally Bank says their banking charges no monthly fees – they mean there are no monthly fees.

The Ally Bank Difference

The Ally Bank mission is to be straightforward with their customers.  They strive to find the various pain points customers experience with other banks – and then eliminate them through their own practices and policies.  They don’t hide any terms or conditions – as evident in the many Ally Bank commercials circulating television and Youtube.  While the commercials are very entertaining, they also make the point well that keeping things hidden or in fine print is wrong – and claim that doing so is not how they do business.

Ally Bank alerts their customers when their money could be earning more.  For example, with their 10 day Guarantee for best rates on Certificates of Deposit products, Ally will ensure you get the best rate possible.  Most other banks don’t provide any rate guarantee, which means the CD rate you receive will never be higher than expected, but it could be lower.  Ally Bank compounds interest daily, helping your money earn more compared to banks that compound monthly, quarterly, or even annually.

Another difference between Ally Bank and many others is their understanding that not everyone lives and sleeps on the same schedule.  In order to accommodate the various lifestyles of it’s customers, Ally Bank offers customer support services 24 hours a day, 7 days a week.  This should eliminate some of the frustrations graveyard shift workers experience when trying to call their banks.  People who work the overnight shift are typically sleeping during the standard banker’s hours.

Since Ally Bank is an online bank, their overhead operating costs are much lower than a bank with physical branches to maintain.  The savings they receive through lower operating costs are passed through to their customers in terms of higher interest rates.  Ally Bank, being part of the GMAC family of financial products, also has an asset generation business, enabling them to put deposits to work more efficiently.  They originate competitive, quality loan assets from the GMAC mortgage and auto loan operations profitably at these deposit rates.

Financial Products Offered at Ally  Bank

Ally Bank offers a number of financial products.  If they think your money could be earning a higher rate – you’ll receive a “sleeping money alert”, letting you know you might be able to get a better rate with a different product.  Financial products available at Ally Bank include:

  • 1 year classic certificate of deposit
  • 9 month no penalty certificate of deposit
  • online savings accounts
  • money market account

How to Take Advantage of FDIC Insurance at Ally Bank

You can feel confident your deposits are safe, because Ally Bank is FDIC insured up to $250,000 per investor through December 31, 2009.  You can actually insure money over $250,000 as well.  Each individual in your family can be insured up to $250,000 on a single-name, FDIC insured savings account.

For example, Mike Smith can open an account in his name and receive full FDIC insurance coverage.  His wife, Mary Smith, can open another account in her name, and receive full FDIC insurance coverage.  The Smiths would currently be FDIC protected for $500,000.  If they still had more money to deposit, they could open a joint account, in the name of Mike and Mary Smith, and receive $250,000 FDIC insurance protection on that account, too!

In some states, you would also be allowed to open single-named accounts in children’s names.  Another option to increase your FDIC insurance protection would be to consider opening trust accounts, with the money payable to the beneficiaries of the account upon your death.

To open an account or check out the current rates for the online savings account, money market account, or certificate of deposit click here.

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Debbie

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Debbie
Debbie Dragon is a full-time writer who has been covering personal finance online for almost 9 years.

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2 Responses to Ally Bank Review

  • Mike

    Ally bank will lie straight to your face and smile while doing it. I have had my savings acount for over a year with Ally bank and thought everything was good until they started charging me tons of fees that they specially had told me that didn’t charge. Don’t use this bank unless you want to wake up one day and see your account pounded with fees when you though you had a “free” account with “no fees”. SURPISE there is a reason why the interest rate is so high, they make up for it with fraudulent fees. I am filing a small claims case in the state of Pennsylvania – go check out the court records.

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