Are you looking for a better checking account, but aren’t sure what to think of online checking?
Let’s look at Ally Bank and see whether or not you can trust an online checking account for your daily money needs.
What is Online Checking?
You are probably used to going to a brick and mortar bank to purchase checks, make deposits, and use the ATM.
With the growth of online finance you can now enjoy the benefits of a checking account with the low cost perks of banking with a firm that doesn’t have the overhead of thousands of physical branch locations. This low cost profile allows online banks to offer lower fees and better deposit interest rates to their customers.
The normal features to expect from online checking include:
- Great online access and services
- Significant ATM access to make up for the lack of physical branches
- The ability to have a physical checkbook like you would with any other bank
- A debit card
- Overdraft protection
- FDIC coverage on your deposits up to $250,000, just like any other bank
What Features Does Ally Bank Offer with Online Checking?
Ally Bank offers all of the standard features customers come to expect from online checking accounts. But what makes Ally different?
Low and Simple Fee Structure
What makes Ally different from almost every other financial institution is the company’s differentiator in the marketplace is a simple, low-fee business model that doesn’t gouge customers.
At most banks you’ll pay anywhere from $25 to $35 for each instance of overdraft until you get your balance back into positive territory. So if you go shopping and swipe your card 10 times, you get charted $250 to $350 in overdraft fees.
Not with Ally.
Instead, there is a $9 overdraft fee and you can only have one per day. If you swipe your card 10 times, you still only pay 1 fee for the day. This will save struggling customers a ton of money — which is good for the customer and Ally.
Another example of the low fee structure is ATM fees.
You get free ATM fee reimbursement from any ATM nationwide. No more having to pay $2 to your bank to use an ATM plus $3.50 for the bank that actually runs the ATM.
You’ll never pay another ATM fee again.
Free Products and Services
Ally will give you free standard checks and cashier’s checks. You won’t pay for checks ever again (unless you want a fancy logo in the background or some other customization).
Another nice addition: you get free check images online. Most banks charge for that or require you to maintain a minimum balance.
Speaking of minimum balances, Ally Bank doesn’t have one.
You won’t get dinged for your account dipping below a certain amount. In fact you can open an Ally Checking account with $1 if you want. There’s no minimum deposit to get started.
The bank also has a great website and online services. Again, this is a necessity if you’re going to cut out branch locations. You can scan in paper checks that you would normally take to the bank as well.
But what if you need to talk to someone that you would normally talk to at a bank?
No worries there either. You get 24/7 phone customer service that isn’t complicated to reach. There’s no crazy phone tree to figure out.
Not at a place you can talk? You can chat with a representative online. The website also lists current hold time estimates so you know when peak calling time is and when to avoid it.
You can also send money to your friends.
With Ally’s Popmoney® you send send money to anyone who has a U.S. banking account. You can use their bank account number or even an email address or cell number. It’s a great way to get money to people, especially if you don’t know when you will see them next. You can also receive money as well.
And you also can earn money back with your debit card purchases.
When you use your debit card to buy stuff from participating retailers, either online or in-store, Ally will give you cash back right into your account.
Related: See our review of Ally Savings.
How Does Ally Compare to the Competition?
In short, Ally compares very well to the competition. Let’s look at the specifics.
Main Competition: ING Direct’s Electric Orange Checking
In my opinion, Ally Bank’s main competitor is ING Direct. Both are behemoths in the online banking industry.
Compared to ING’s Electric Orange Checking, Ally’s Online Checking looks to be a great deal:
- ING has 3 tiers of interest rates. The first is minimal, but you have to have $50,000 or more in the account to reach the second tier of earnings. Ally only has two interest rate tiers. The first tier goes to $15,000 and then you earn a higher rate after that.
- Ally gives you free standard paper checks. ING charges you $5 for every 50 checks.
- ING’s interest rate for the 2nd and 3rd tier of earnings has traditionally been a bit higher than Ally’s. However, you have to have $35,000 more in the bank ($50,000 vs. $15,000) to get to the higher interest rate tier with ING.
- Ally charges $9 per day for overdrafts. ING lends you the money at an incredibly low interest rate. (ING usually comes out ahead here unless you’ve overdrafted thousands upon thousands of dollars.)
Not many banks can match what both Ally Bank and ING Direct offer online. You’ll find better interest rates, fewer fees, and less complications with the two major players.
[Related: Check out our list of great free online checking accounts.]
Yet of the two it seems that Ally is in the lead. The fee structure is simple and easy to understand, and the higher interest rate tier is easily accessible for the average customer.
Want to try it out?
Open an Ally Bank Online Checking account today with as little as $1. Put a little bit of money into the account to test it out before you commit all of your banking to it.
I don’t think you’ll be disappointed.
I actually use ING for my long-term investments.
This was a great comparison between Ally Bank checking and ING Checking. Great review.
I personally use ING Direct but don’t really use the checking account in a normal manner. I’m sure Ally would work just as well but I enjoy having all of my sub savings accounts at ING. Maybe one day I will research banks again and make a switch but interest rates are so low right now that I’m not bothering.
ING did a better job at marketing at the beginning and pioneered online banking. It seems Ally is just too late to the table and will have to offer some high incentives to get people to switch from ING. It does seem like a good option though based on your review.