*but $3.95 per trade with 30+ trades per quarter or balance > $100k
Feature you’ll love
Ally Mobile app: Unlike many brokers, Ally Invest doesn’t have a dedicated app for its brokerage activities. Instead, the Ally Mobile app provides functionality for all of the company’s accounts and activities. For example, you can see all your accounts in one spot – checking, savings, CDs, credit cards and brokerage accounts. That’s a great feature for customers who already have an Ally account and want to keep their financial life consolidated within there.
This all-in-one app fits that bill well and is simple to navigate and use. You’ll be able to deposit checks, transfer money between accounts, pay bills, check tax forms, find ATMs and perform a number of other banking activities.
On the app’s investing side, you’ll be able to do even more. You can check your portfolio with streaming quotes and trade stocks as well as multi-leg options. Customers can perform technical analysis with charting tools and access market news and market movers. While it doesn’t have all of the features of Ally’s trading platform, it performs well when you can’t be at your desk.
Where Ally Invest rocks
Low trading costs: Ally’s strongest suit is probably its low trading commissions, which are even with some other top brokers but can be reduced lower for active traders. Ally charges $4.95 for a stock or ETF trade, putting it in line with commissions from Charles Schwab and Fidelity, but ahead of TD Ameritrade and E*Trade.
But Ally takes it up a notch for active traders who make 30 or more trades per quarter or who maintain a balance of $100,000 or more. The broker reduces commissions to just $3.95, clearly ahead of some of the top players.
Options traders will benefit similarly. The normal commission structure is $4.95 + $0.65 per contract. Qualifying active traders will receive options trades for $3.95 + $0.50 per trade, one of the best prices for options trades in the industry.
Integration with Ally: This is a bonus for current Ally customers, and allows them to consolidate their financial accounts within one bank, as you can see with the mobile app. That can be great for transfers between accounts, reducing delays on cash moves between a bank and broker, for example. It can be convenient to simply have your accounts in one place when tax time arrives. Ally Invest ends up being simply just another tab on the dashboard of the entire Ally website.
Customer support: Ally really steps up in this category. The broker offers 24/7 phone support and an online chat function to quickly route you to a representative. There’s also more conventional means, such as email, though customers don’t have the option of going to a physical branch for assistance. But this latter point shouldn’t be a deal-breaker for investors.
Sign-on promotions: Ally’s promotion for opening and funding an account is a nice incentive. The broker is offering $50 and three months of free trades (up to $500 in commission credit) if you bring $10,000 to an account. The cash bonus portion steps up to $200 with a deposit of $25,000. Once the bonus is in the account, you’ll have to hold the bonus and the qualifying deposit (minus any trading losses) in the account for 300 days.
Ally also offers another less-obvious bonus, too. The broker will pay for your transfer out of another brokerage account up to $150, as long as you bring at least $2,500 to your Ally Invest account. That’s real cash that doesn’t come out of your pocket if you decide to move to Ally.
Where Ally Invest could improve
Cash balances: Unlike some brokers that pay interest on your cash balance, Ally doesn’t offer that feature. However, the broker will sweep your cash into an FDIC-protected account that offers a razor-thin interest rate. That’s in contrast to brokers such as Interactive Brokers, which offer quite attractive rates on idle cash balances. In theory, it should be easy enough to move cash over to your Ally savings account, where rates are substantially higher.
No-transaction-fee mutual funds: This is a real weak point for Ally, since it doesn’t offer any no-transaction-fee mutual funds, while many other rivals allow you to skip the fee across thousands of mutual funds. Each of TD Ameritrade, Charles Schwab, Interactive Brokers and Fidelity offer at least 3,600, so Ally really stands out as lacking here.
That said, Ally’s fee is still reasonable for no-load mutual funds at $9.95, though it still doesn’t beat fee-free.
Commission-free ETFs: Ally does better in commission-free ETFs, offering more than 110 of them from two fund companies – WisdomTree and iShares. But nitpickers might note that Ally’s commission-free ETFs don’t include any from the most recognized leaders in low-cost funds, such as Vanguard.
Many of the basic WisdomTree funds charge higher expense ratios than Vanguard’s weighted average fund. For example, the lowest expense ratio on the range of WisdomTree stock funds is 0.28 percent. That would cost the average investor $28 per year for every $10,000 invested. In contrast, the weighted average Vanguard fund has an expense ratio of 0.11 percent, or $11 annually for every $10,000 invested.
Vanguard offers its own ETFs without a commission, and both Schwab and Fidelity offer hundreds of such ETFs. So if trading ETFs is a big part of your portfolio strategy, you’ll want to comparison-shop.
Trading platform: Ally’s browser-based trading platform is good but not great. It offers some standard functionality and is still two steps above basic platforms. Ally provides streaming charts with more than 100 kinds of technical studies and 36 drawing tools to analyze a stock’s performance.
Also under the hood is some other relatively standard fare: customizable watch lists, a profit-loss calculator, options probability calculator and stock pages with each company’s relevant financial metrics and data. However, the platform just doesn’t stand out against the offerings from the competition, but will suffice for less-demanding traders.
Bottom line
Ally makes a good choice for active investors, particularly for those who already have an account with Ally and are looking to bundle all their accounts:
- Volume-based pricing discounts make Ally into one of the cheapest online brokers.
- Integration with Ally makes it convenient to move money from banking accounts to investing accounts.
- However, investors in mutual funds of ETFs are not very well-served.
Investors who already bank with Bank of America may want to check out Merrill Edge if they’re looking to expand their relationship there. Merrill has a great program that rewards customers with ongoing free trades if they maintain certain balances. Investors who need more in the way of free trading for ETFs and mutual funds will definitely want to check out Vanguard, Fidelity Investments and Charles Schwab.
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