Ally Bank - an honest bank… honestly

I’m sure you have seen the comercials. A little kid being told to ride a bike, but then stop from going more then a foot or two. A boy given a toy truck to play with but having it swept away and replaced with a cardboard version shortly after. The point of the commercials is to say that even children know that this kind of behavior is wrong, so why don’t banks?

These commercials are for a new kind of bank in town, an honest bank. They claim no monthly fees, no minimum deposits, no minimum balances, and their fine print is couple font sizes greater then other banks.

Who Are They?
The bank is called Ally. Technically they are not new, they have been around for awhile under a different name. GMAC just recently rebranded itself and emerged under the new name Ally Bank. Part of the reason for the name change is no doubt to put some distance between them and there old relative General Motors -which I am sure you have all heard by now, is not the most trusted company to be associated with these days.

The fact that this bank could be looked at as GMAC just with a sneaky new name shouldn’t bother anyone though. While GMAC used to be owned by GM, they were sold off awhile ago and are now quite separate entities. But, as the saying goes ‘its all in the name’ so GMAC re-branded itself as Ally Bank. And with the name change came a new philosophy, a philosophy of treating customers fairly.

Why Should We Care?
Apart from it being very refreshing to have a bank that whats to be honest, Ally has two products that I think will be of interest. First is there online savings account and their one year certificates of deposit.

Online Savings Account
Ally’s online savings acocunt has some pretty good perks. The best however is that the current interest rate is 2.05% APR (June 11, 2009). That is definitely higher then the norm these days. Some of the others include:

• $0 to open
• No minimum balance
• No monthly fees
• Daily compounded interest
• FDIC insured

I was surprised to see that Ally also had listed, very clearly on their online account overview page, that you only get 6 withdraws or transactions per statement cycle. This might sound like a big drawback, but it is not. Being limited to 6 transactions per cycle is actually a Federal law. This law limits electronic and telephone transaction to only 6 per cycle. So all banks, by law, can only allow up to 6 transactions. The difference between other banks and Ally is that Ally clearly states this while others hide it in the fine print.

One Year CDs
I said in my post about laddered savings that CDs are great for storing your emergency fund but that they need to be handled correctly because of the fees that you get hit with if you pull out early, like if there is an emergency and you need the funds. Ally Bank does away with this concern by offering no penalty CD with an APR of 2.30%. No minimum balance required and no penalty for taking the money early. So if you are looking for a good place to keep your emergency fund you might want to check out Ally Bank and look into their no penalty CDs.

Other Products
Ally also offers a classic certificate of deposit, there are fees on this one for early withdraws, but at 2.49% APR, you do stand to make a bit more interest if you don’t have an immediate need to withdraw the cash. A money market account is also available with 1.90% APR that includes a check card. Additionaly, as with all of Ally Bank’s products, there is no minimum to open, no minimum balance, and no monthly fees.

Tell Me More
On the account creation page it states that it will take only 10 minutes to open a new acocunt. In actuality, I would say it took less time then that.

Another nice feature was that, when you open and account, you can actually open multiple savings accounts and certificate deposits all from one screen.

Conclusion
From everything that I have seen and read, I am sold on Ally Bank. The no minimums, no opening balance, and no monthly fees are all a great plus, but so is having a bank that discloses it’s fees up front in a readable font size. They are fully FDIC insured so there is no risk to loosing your money as long as you keep your balance under the $250,000 limit. Oh, and them having higher-than-average-rates don’t hurt either.

I would highly reconmend you check them out at Ally.com