Ally Invest Review for 2021

Investing
Updated: 1st Jan 2021
Written by Ryan Barnes
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Investing
December 19, 2020
Written by Ryan Barnes

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Since its founding, Ally Invest has attracted a legion of die-hard fans. Recently, Ally Financial Inc, has invested heavily into its tools, expanded its service offerings, and increased securities available to trade.

As an online-only broker, Ally Invest has refined its tools and platform to ensure investing is a streamlined experience.

Like its peers, Ally Invest now offers $0 commissions for all U.S.-listed stocks, ETFs, and options in addition to offering over 10,000 mutual funds for $0 transaction fees.

Read on to see if Ally Invest is the right place for you to start investing and open a brokerage account in 2021.

Ally Invest Overview

Features: Details
Account Minimum: $0
Commissions:$0 on all stock, options, and ETF trades.
Account TypesIndividual and Joint Taxable Accounts, Traditional and Roth IRAs, & Robo-Advisors
Customer Support:24/7 email, live chat, and phone support for customers.
Human Advisor(s):No
Mobile App:iOS & Android
Tax Strategy:No
Tradeable Securities:Stocks, ETFs, Options, Bonds, and Fixed Income Assets.
SIPC Insured:Yes
Socially Responsible:Yes

About Ally Invest

Ally Invest is a leading online stock broker and tied to one of the largest online banks in the United States.

Ally offers one of the widest selections of available securities to trade, including Forex, OTC “penny stocks”, and options contracts at just $0.50/contract. This is one of the lowest rates in the industry.

Investors can open Individual and Joint taxable accounts, Traditional, Roth, and Rollover IRAs. There are no minimums to open any of these accounts and no-account maintenance fees. It’s a win-win all around.

With a robo-advisor that only requires $100 to get started, makes Ally Invest a top choice for beginner investors as well.

Pros:

  • Ally Invest has one of the lowest per-contract options rates around, at just $0.50/contract. Users can opt into Ally’s upper-tier trading layover, InvestLIVE, by contacting support or by making over 10 trades per month.
  • Margin rates are lower than Ally’s larger peers and some of the best in the industry.
  • Customers love how easy it is to open an Ally Invest account, transfer funds, and view aggregated balances.

Cons:

  • Limited account types make it hard to have your full long-term financial needs met just at Ally Invest/Ally Bank.
  • Forex trading requires a different platform to log into.
  • Service charges of $4.95 per trade may apply to stocks that trade for under $2/share.

Ally Invest Account Details

Account Minimum Balance:

$0 minimum balance for all Individual and Joint brokerage accounts, and for all Individual Retirement Accounts (Traditional, Roth, or Rollover).

Commissions:

  • $0 commissions on all stock trades, options trades, and exchange-traded funds (ETFs) made online or on the mobile app
  • $20 service fee for any broker-assisted trades.
  • Options contracts trade for $0 commission and a $0.50 per contract fee.

Management Fee(s):

No management fees for standard brokerage accounts, robo-advisor service, and managed portfolios

Account Types:

  • Individual and Joint taxable brokerage accounts, margin accounts
  • Traditional IRAs, Roth IRAs, and Rollover IRAs
  • Ally Bank savings/checking account (to enable cash sweeps into higher-yielding money markets).

Automatic Rebalancing:

Not offered in standard brokerage accounts unless enrolled in the robo-advisor or managed portfolios services. Managed Portfolios are monitored 24/7 and rebalanced as needed.

Expense Ratios:

Ally Invest offers multiple commission-free ETFs with operating expense ratios (OERs), ranging from 0.18% per year up to 0.90% per year. There are no expense ratios charged by Ally Invest over the underlying funds’ base OER.

Customer Support:

Support for customers is available by phone 7 days a week, 7 a.m. – 10 p.m. EST, as well as live chat with specialists or automated services in both the mobile app and desktop trading platform.

Human Advisor(s):

Human advisors available for broker-assisted trades for a $20 fee. Moreover, there is currently no program to offer 1-1 personalized advice on topics like retirement planning.

Mobile App:

Ally Invest has a mobile app on Android (4.3/5) and iOS (4.7/5). The investing app is feature-rich, allowing for easy trade execution. Do note, some options positions cannot be traded on the mobile app. Users can also review balances and transfer funds to and from Ally Bank accounts.

Tax Strategy:

No automated tax harvesting strategy for standard brokerage accounts. Robo-advisor users can choose one of the pre-structured options that offer tax-optimized portfolios.

Tradeable Securities:

All U.S.-exchange listed stocks, funds, and ETFs are available to trade. Most of the 10,000+ mutual funds available to trade can be traded online for no transaction fee. Others will incur a minor fee of $9.95 per buy or sell order.

Options and Over-The-Counter stocks (penny stocks) can be traded in the U.S. However, extra fees apply to stocks that trade under $2/share. Fixed income investments are available, but only on the web platform. Sadly, fractional share buying is not available.

Socially Responsible Investing:

Ally Invest has screening tools for socially responsible-themed ETFs and mutual funds available to trade.

And robo-advisor customers can select the Socially Responsible portfolio option. This portfolio chooses ETFs based on their Environmental, Social, and Governance (ESG) efforts.

Current Promotions:

Ally Invest currently offers cash bonuses up to $3,500 for new qualifying accounts. The cash bonus starts with a minimum deposit of $10,000 for a $50 bonus, scaling up to $3,500 for deposits over $2 million.

Margin Trading:

Margin trading is available on taxable Ally Invest accounts. Interest starts at 7.75% for balances under $10,000, and margin rates can go as low as 3.25% for accounts over $1 million.

Asset Management:

Ally Invest and Ally Bank do not have an extensive asset management business, only the robo-advisor program, which can be started with a minimum balance of just $100.

Ally Invest Review:

Put simply, Ally Invest is a solid broker that doesn’t blow the doors off in any one department but doesn’t fall flat anywhere either.

This makes it a good fit for a beginner investor and favors those who currently bank at Ally already.

Ally offers two robust trading platforms, loaded with good research, screening capabilities, and detailed stock charts. The mobile app has solid reviews, but Android users have noted some annoying features.

If you’re looking for a place that offers access to financial advisors, you’ll want to look elsewhere. Ally invest does not have mountains of CFPs on staff like some other places do.

But if you are committed to the online banking experience with Ally already and are a DIY investor, there are benefits in combining your assets under one financial roof.

If you are looking for a simple online broker, then Ally Invest is a safe choice. And on cost, it’s hard to beat. Ally Invest has what a deep discount brokerage should have – a commitment to a low-cost trading experience.

Ally Invest is Best For:

  • Option & Forex Traders
  • Active Traders
  • Young Investors
  • Commission-Free Trades
  • Simplicity

Ally Invest is a broker for both young investors and experienced traders. On the technical side, the trading platform has been simplified over the years. But active traders will still find a lot to like here, such as favorable margin rates and low options contract fees.

People who already bank at Ally will find it easy to open an Ally Invest account and will enjoy viewing balances together.

What is Ally Invest?

Ally Invest is the rebranded TradeKing brokerage, acquired in 2016 by Ally Bank. Ally Bank itself has undergone tremendous transformation.

Originally, it started out as General Motors Acceptance Corp and served the auto financing market. Today, Ally Bank has over 2 million depositors and over 400,000 brokerage clients.

Ally’s brokerage products and services are offered through Ally Invest Securities LLC, member FINRA and SIPC.

How Does Ally Invest Work?

Ally Invest allows account holders to buy and sell stocks, bonds, funds, and options in taxable or retirement-based accounts, all for $0 commissions.

Ally has many features and tools that cater to options/forex/OTC traders, and Ally earns extra fees for some of these trading activities. In addition, Ally makes money from:

  • Interest on Cash Balances – Ally Invest earns interest income on uninvested cash balances held at their brokerage and pays only part of that interest income back to customers via cash yields.
  • Interest on Margin – customers who take out loans to buy stocks or other investments pay interest on those loans, earning fees for Ally Invest.
  • Payment for Order Flow – Ally Invest earns fees from market makers that work for securities exchanges) by selling customer order flow.

This is common among online brokers and does not affect the price you’ll receive for a trade.

What We Like:

The fully online experience and deep ties with an online-only bank are two of the biggest standouts here. Investors will also appreciate rock-bottom fees and a robust and customizable platform.

Also, the robo-advisor having no management fees is a nice touch, especially for new investors who are just getting their feet wet.

How Ally Invests Your Money:

All cash deposits and proceeds from sales, go into a standard money market account that pays a slightly higher interest rate than normal.

From there, everything is self-directed unless you enroll in their robo-advisor service. Ally is a hands-off broker.

Related: How to Invest $1,000

Does Ally Offer Wealth Management?

No, there is no wealth management division at Ally Financial. ☹

Ally Invest Fees and Pricing:

  • Zero commissions on all U.S. stock, ETF, and options trades. There is a $0.50/contract service fee for options trades.
  • Account transfer fees: $25 if coming from another broker
  • Account closure fee: $50
  • Outgoing wire fee: $25
  • Many mutual funds trade for $0 commission; some mutual fund trades have a $9.95 transaction fee.
  • 0% management fee for Ally’s robo-advisor service.

Is Ally Invest SPIC Insured?

Yes, assets (securities + cash) held at Ally Invest are Securities Investor Protection Corporation (SIPC) insured up to $500,000 in the event of a broker-dealer failure.

This $500,000 in protection applies to each account capacity (such as Individual, Joint, or Trust account). The limit for SIPC claims on un-invested balances is $250,000 cash. Forex trading balances are not SIPC insured.

For additional protection, Ally Invest has obtained bolt-on insurance for $37.5 million.

Research and Tools for Investors:

Ally Invest has partnered with key data providers like Morningstar to provide data on mutual funds and ETFs and to provide market data for technical stock analysis on the web platform.

Traders will like their tools for evaluating options chains, viewing financial metrics for a stock, interactive charting, creating watchlists, and more. Most of this functionality passes over into the mobile app, but not all of it.

New investors can research stocks and trade right on the platform, without having to dig up details on another site.

There are also articles related to trading issues, tax management, and portfolio rebalancing on the website, but these resources are scant compared to some of Ally’s peers.

Related: Motley Fool Review

Bottom Line: Ally Invest Review

Ally Invest is an online-only broker that makes investing approachable. With straightforward accounts, low-fees, and detailed research, there is a lot to like here. However, if you are looking for a more all-inclusive experience and some handholding then look elsewhere.

More Broker Review:

Ryan Barnes
Ryan Barnes
Ryan is a certified Chartered Financial Analyst (CFA) with over 15 years of experience managing and steering hundreds of millions in client assets through complex and dynamic financial markets. Ryan’s work has appeared in the Wall Street Journal, Barron’s, Forbes, Nasdaq.com, Investopedia, and Bloomberg. Additionally, he has multiple citations in peer-reviewed papers for reporting done on the U.S. housing market preceding the Great Financial Crisis.