Ally Bank has long been a strong competitor in the personal finance world for its high-interest digital deposit accounts and above-average customer service. A division of the popular online bank, Ally Invest has been getting similarly positive reviews and was named one of the best stock trading apps by Business Insider in 2021.
In this review, we’re going to go over everything you need to know about Ally Invest’s self-directed platform.
What Is It?
Ally Invest is a self-directed trading platform that charges no commission fees on many different trades and offers a wide variety of assets to choose from. You can start trading ETFs, stocks, options, and more with as little as $1.
If you don’t want to choose your own trades, you can use the firm’s robo portfolios and select a profile that meets your investing goals and personal values.
How It Works
You can trade the following assets through Ally Invest:
- ETFs (Vanguard)
- Mutual funds
- Margin account
Stocks, ETFs, and options carry no commission fees when you invest with Ally.
You can fund your account via ACH bank transfer, wire transfer, mailed-in check, or cashier’s check and start trading as soon as your deposit goes through. You can also transfer money from an Ally Bank account to your Ally Invest account almost instantly. The daily limit when doing this is $250,000 and there are no transfer fees.
There are no account minimums for trading stocks, ETFs, or options. However, there is a $100 minimum opening purchase of $100 for Pink Sheet and OTCBB stocks.
If self-direct investing isn’t what you’re looking for, you might be interested in Ally Invest’s other offering: Robo Portfolios. These robo-advisors invest in a variety of ETFs for you depending on which kind of portfolio you pick.
Choose from the following four types of portfolios:
- Socially responsible – prioritize investments in ethical businesses with green initiatives
- Tax optimized – maximize your investments by investing your after-tax income
- Core – diversified investments in fixed-income assets within your specified risk tolerance
- Income – invest conservatively and enjoy higher dividends
After you select your portfolio type and let the program know your main goal (retirement, major purchase, generate income, or building wealth) and timeline (between five years or less and 21 years or more), the robo-advisor will invest and rebalance your portfolio for you as needed.
You only need $100 to get started and there are no advisory fees or annual charges for using this service. 30% of your portfolio will be automatically set aside to earn interest and protect against volatility.
Let’s break down what it looks like to trade different securities with Ally Invest. We’ll include account minimums, fees, and other considerations here.
If you want to trade ETFs, there are a few different ways to narrow down your choices and find the right stocks for you. You can search a specific stock that you have in mind or browse within a category like tech or finance. There are thousands of ETFs to choose from and Ally Invest provides a Morningstar rating to give you a good idea of past performance and value for each stock. There are many $0 commission stocks available and no account minimum requirements.
You can trade many stocks commission-free and there are a number of securities available for low prices. For low-priced securities under $2, Ally charges a base commission of $4.95 each and a $0.01 per share fee on top of this. You will not usually pay more than 5% of a trade’s value in commission. There are no account minimums required to start trading stocks.
There is a contract fee of $0.50 when you trade options on this platform and you may incur an additional fee for index option trading if an exchange charges fees. Through Ally Invest, you will pay a fee of $0.35 per contract for indexes including the S&P 500, the CBOE Volatility, and others.
There is no account minimum for options trading and Ally Invest’s offerings for this kind of trading are extensive.
And because options trading is complicated, Ally provides an Options Playbook that can help you navigate this kind of investing. It gives an overview of the terms you’ll need to know, the risks that come with trading options, different strategies you may want to try, and more. This guide was put together by the Senior Options Analyst at Ally Invest.
Choose from various loan and government bonds and certificates of deposit if you’re looking for a low-risk, longer-term investment. You’ll make back your principal with interest over time for a nice trickle of income.
There is a flat fee of $1 charged for every bond you purchase with a $10 transaction minimum and $250 maximum. Certificates of Deposit carry a fee of $24.95 per transaction.
There are over 12,000 mutual funds to choose from including over 500 U.S.-based fund families.
The fee for No-Load mutual funds is $9.95 when you make either a purchase or a sale. This is fairly low compared to competitors, but Ally does not offer any fee-free mutual funds as many larger investment firms are doing. Ally Invest doesn’t charge any fees when you purchase or sell a Load mutual fund, but you may incur third-party fees from the funds themselves.
It’s possible to trade without paying any commission fees, but if you want to invest in mutual funds, bonds, or margin accounts, you’re going to have to pay some fees. (See the above section for more specific information about those fees in particular.)
[Related: See how Ally Invest stacks up against the competition in our rundown of the best free stock trading apps of 2022.]
First, there is a $0.50 per-contract fee for options trading. There are no fees for exercising or assigning options. However, you may incur the following fees:
- Option Position Management: $100 + regular commission.
- Optional Expiration Sellouts: $40 + regular commission
Other fees include:
- an ACAT Transfer Out fee of $50,
- an Outgoing Domestic Wire Transfer fee of $30,
- a Worthless Securities Processing fee of $30,
- a $50 fee for foreign stock transactions (+ regular commission),
- and a $40 fee margin sellout fee (also + regular commission).
There are no low balance fees, inactivity fees, or low balance fees for using the platform.
Ally Invest will reimburse up to $150 in transfer fees when you move more than $2,500 from another brokerage to this account.
For a complete list of fees, see this page.
How to Open an Account
If you want to transfer funds from another brokerage account, you can request a transfer online using this online form. You don’t need any other accounts with Ally Bank to get started but you can link one of these accounts to your Ally Invest account to transfer funds and pay fees.
When you open a new Ally Invest account, you qualify for a cash bonus of up to $3,000 depending on how much money you deposit into your account. You must deposit at least $10,000 to earn a bonus and over $2 million in order to get the full $3,000.
|$10,000 – $24,900||$100|
|$25,000 – $99,900||$250|
|$100,000 – $249,900||$300|
|$250,000 – $499,900||$600|
|$500,000 – $999,900||$1,200|
|$1,000,000 – $1,999,000||$2,000|
If you qualify for a bonus, it will be deposited into your account 10 business days after your deposit is received.
Pros and Cons
The best thing about Ally Invest is that it is both beginner-friendly and advanced enough to give intermediate investors some of the options and flexibility they’re looking for. The platform itself is easy to use and intuitive, if a little bit old-school. Note that some features look a little different between mobile and the online portal and others are available only through the online portal.
Also working in Ally Invest’s favor is the selection. Options traders especially will appreciate the range of products available and the low contract fees.
Another thing Ally Invest does better than a lot of similar platforms is providing a number of educational resources. The most notable is the Options Playbook, which details everything you need to know to get started with options trading (see “Options” for more information). There’s also a great selection of informational articles you might find helpful if you’re new to investing on the site itself. Everything is free to access.
However, when it comes down to actual investing tools and insight, Ally could do a better job sharing market research and data with investors. You won’t get a whole lot of information outside of how an asset is performing when you’re looking for a trade.
It’s also cheaper and easier to get started with Ally Invest than a lot of platforms. Ally Invest has low account minimum requirements and plenty of commission-free securities, so it isn’t expensive to sign up and there’s little commitment.
Unfortunately, uninvested money doesn’t earn interest with this account. Although this is pretty common, it would be nice to see the bank–known for such great interest rates on savings accounts, CDs, and MMAs–to at least give users something for the cash not invested.
Another potential disadvantage is that you can’t trade cryptocurrency or futures with Ally Invest. There are also no mutual funds you can invest in without incurring a transaction fee, which might be a bummer if you were planning on doing some or all of your investing in mutual funds.
Finally, you can find a firm that charges lower fees for general account maintenance such as transfers and trades themselves. Though not bad by any means, Ally’s not the cheapest option in this respect.
Is It Safe?
All Ally Invest accounts are covered by SIPC protection up to $500,000 per depositor which includes $250,000 for cash claims. Ally is safe to use with a highly secured platform that keeps your information safe and protects your assets against cyber attacks.
Ally Invest gets solid marks all around for the quality and convenience of its customer support. The firm itself seems to deliver a satisfactory customer experience when you contact them with questions or concerns, and most users don’t have any major issues to report about their accounts. With that said, depending on when you call, you might have trouble reaching a representative.
The Ally mobile app, which is the same app you’d use to manage any other Ally Bank accounts you might have, is pretty good. It has a score of 3.9 out of 5 stars on Google Play and 4.7 out of 5 stars in the App Store. Overall, it’s easy to get around in the app but you won’t find all of the advanced tech features of some larger firms.
To contact customer support for Ally Invest, call 1 (855) 880-2559. This phone line is separate from Ally Bank and open 24/7. You can also chat with an agent through the app or online or email your question to firstname.lastname@example.org.
If you’re looking for a self-directed investing platform that is easy to use with low opening deposit requirements and securities with $0 commission, Ally Invest might be the account for you. Those looking to trade stocks, ETFs, and options will likely benefit the most from the features this account offers.
Since you can really start trading with as little as $1, this firm is also an all-around great choice for beginners who might not have a lot of money to invest yet. Consider a larger firm if you’re an intermediate investor as Ally’s offerings aren’t as advanced.
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