Ally Bank (GMAC Bank) Review

September 12, 2009 by Millie Kay G.

The other day, we provided a review of EverBank to explore some interesting ways to diversify our investments using foreign currency accounts, high interest savings accounts and global certificates of deposit with international exposure. This time, we’re returning to familiar territory by taking a look at a well-known bank that offers straightforward savings products, which recently just went through a “facelift” (or shall we say, rebranding?).

We’re talking about Ally Bank, of course, and you might already be familiar with its previous incarnation as part of GMAC Financial Services. Now rebranded, this online bank offers products such as an online savings account, certificates of deposit, and a money market account. So how safe is it? There’s no risk to your money here given that all accounts are covered up to $250,000 per depositor by the FDIC.

Let’s briefly investigate why Ally Bank might be a reasonable option for you if you’re looking for a new place to park or keep your funds.

Ally Bank Review (Formerly GMAC Bank)

#1 Online Savings Account

The Ally Bank Online Savings Account has a current yield of 1.75% (Updated 9/18/09) APY, which seems generous compared to contenders like Bank of America’s savings account (returning a measly .10% APY) offered in Illinois, or even ETrade’s Complete Savings Account at 0.60% APY. The interest here is compounded daily. In addition, there’s no minimum balance, no monthly fees, and you can open an account with $0.

If you haven’t started an emergency fund yet or if you have a specific savings goal in mind, then the Online Savings Account can be a good starting point.

Here’s where you can open an online savings account at Ally Bank.

#2 Money Market Account

Some of us need the convenience of a money market account. With the Ally Bank Money Market Account, you can have a 1.65% variable APY and a free check card. Your first fifty checks are also free. As for ATM fees, Ally Bank won’t charge you; even better, it will refund the first four fees you pay in a month for using another bank’s ATM, up to $6 per month. That certainly gives you some leeway and flexibility to use other ATMs if need be. Convenient!

On the down side, there are withdrawal and transfer limits. If you have a Money Market Account, only three of the six withdrawals you can make each statement cycle (usually per month) can be by check or with your check card at a point of sale. Exceeding the limits means that you’ll be hit with a $10 per transaction fee, so it helps to plan ahead for withdrawals and transfers.

Other fees include: returned deposit item for $7.50, non-sufficient funds for $20.00, and stop payments for $15.00. By comparison, Capital One Direct Banking’s money market account charges $25 for a deposited check return, $25.00 for non-sufficient funds, and $25.00 for a stop payment request, so it would appear that banking at Ally Bank is cheaper and more cost effective.

#3 Two Ally Bank CD Options

You have a few more savings choices with Ally Bank’s CDs:

The Classic CD has the bank’s highest fixed CD rate with a fixed term; as of today, it’s a 2.00% APY for a one-year term. In comparison, the Orange CD at ING Direct has a 1.50% APY for a term of 12 months.

Like Ally Bank’s savings account, you can open the Classic CD with $0 (you can fund the CD account later) and there are no monthly fees. At maturity, the Classic CD will automatically renew. If you want to withdraw the earned interest, you just need to let the bank know about your intentions either before the maturity date or within the next ten days after maturity.

You’ll encounter some fees if you decide to withdraw your money before the CD matures. It will cost you three months of interest for early withdrawal from CDs with terms of 3, 6, 9, or 12 months. The penalty goes up to 6 months of interest for CDs with terms of 18 months or longer.

Here’s where you can open a Classic CD at Ally Bank.

The No Penalty CD is another type of certificate of deposit that some savers may prefer. It’s a fixed rate CD with no fees for early withdrawal. Right now, the APY is set at 1.85% for 9 months. Like the Classic CD, you can open it with $0. It also compounds interest daily and will automatically renew at maturity.

Here’s the beauty of the No Penalty CD: if you so wish, you can ask for an early withdrawal and get back your entire deposit and interest without having to pay any fees or penalties at any point after the first six days of funding your CD.

Ally Bank Has Accessible Customer Service Options

This bank has other notable features that should contribute to your satisfactory banking experience with them:

  • They’ve got great customer service: they live in the modern ages as they have options for email, online chat, and a 24/7 phone number! If you need to mail in deposits, you can also send them in through snail mail.
  • If you want to review your transactions, know that your account history will show activity going back 18 months. Also, you’ll be able to download transactions into popular money management software programs like Quicken.
  • You can also set up automatic transfers, which can bring you closer to your savings goals. With Ally Bank, you can set up auto transfers between your online savings and money market accounts, with the transfers being credited immediately.

Although Ally Bank doesn’t offer checking accounts right now, their selection of savings products with good rates makes it a favorable contender in the banking space.

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