The economic downturn that affected Americans and most of Europe in 2008, had a ripple effect on the entire world. Fast forward almost a decade. The economic prosperity still concerns large pockets of worldwide economies as they trudge through the mud. Job security is no longer guaranteed and working the corporate ladder does not provide the stability it once did.
The tightened lending belt forces consumers to turn towards savings to build up the cash required to fund their expenses. This is not a bad thing per se. Banks have come onboard to provide competitive rates and products to capture the market. The Ally Bank Online Savings Account is one of them. This account offers the means for those who wish to build up a reserve. Read more on Ally Bank.
Why Choose Online Banking?
Traditional bank structures with physical locations have many overheads to take care of, such as:
- Front-end staff and their back-office counterparts
- Purchased or leased property
- Added security to protect customers and cash
- Insurances for the above
- Utilities and other expenses, and more
Without all these expenses, Ally Bank can keep it’s overheads to a minimum which translates into savings for their customers. See how the National Australia Bank compares with their online banking.
How Ally Bank Online Savings Account Compares to Others
With the reduced infrastructure of Ally Bank, the annual yield of this investment becomes apparent. Although 1% may not seem like much, the compounding effect of interest over this period yields a much higher return than the products provided by the other institutions. Things that consumers need to remember, include:
- The rate used is variable and not guaranteed, meaning that fluctuations in the market, economic conditions, etc. could alter the rate.
- Certain fees apply during some circumstances, such as when they meet the transaction threshold. This may affect the return.
- The information on the other banks can change as they alter their products in line with the market conditions and require proper comparison.
Check out a roundup of all the Ally Bank Savings products.
What are the Charges for an Ally Bank Online Savings Account?
This account is the ideal solution for the consumer who wants more out of their savings account, not just watch fees go down the drain. The operational costs of Ally Bank are low enough to provide consumers with a savings account which attracts 0% maintenance fees. This means more of the consumer’s savings will attract interest, ensuring their funds grow at a satisfactory rate. This provides consumers with the peace of mind that their capital isn’t being eaten away by odious monthly maintenance fees. Some of the other fees consumers can say goodbye to with this account, include:
- ACH transfers to a non-Ally Bank account
- Statement copies online
- Incoming wires (domestic & international)
- Postage-paid deposit envelopes
- Official/cashier’s checks
- Unlimited deposits
There are, however, some items that attract fees which account holders should keep to a minimum to ensure the growth of the savings account.
Restrictions and Penalties that Consumers Should Know about Ally Bank
Although this account seems to be the ideal solution for those who wish to see massive results with their savings, there are restrictions. The design of this account is not as an everyday run-around. Account holders should also take the limitations of six transactions into account.
The account meets the immediate savings needs of the individual, by calculating the interest on a daily balance. This means that the account needs to meet certain FDIC standards. Any transaction over the allowed six transactions a month will attract costs, which can negate the effect of the interest earned. This leads to charges potentially eating away into the capital. To prevent this, consumers need to remain within their six transactions.
As this is a savings account, there are no credit limits attached to it. Accounts that go into overdraft will attract penalty fees and returned deposits. Clients who require a credit facility will need to apply for this on another product.
Consumers who wish to deposit extra funds into their savings account will need to make use of remote check deposits, online transfer, direct deposits, wire transfers, and mail transfers. These accounts cannot accept cash deposits.
The notice of withdrawal period is seven business days, which could be detrimental in emergencies. This account is not ideal for emergency savings which need access in shorter periods than seven business days.
How to Get the Most Out of the Ally Bank Online Savings Account
This account is the ideal vessel for those who wish to make the most of their savings accounts. The account restrictions under Federal Law only permits six transactions, however, the consumer can do as many ATM withdrawals and deposits as they need to. There is also the option to request a check to the account holder, which bypasses the restriction.
Consumers need to keep the account in a positive balance at all times. Compare special transactions to the fee schedule, especially those that don’t fall within the everyday transaction category. Limit withdrawals to benefit from daily interest. That being said, deposits that remain in the account for longer periods of time may enjoy a better return on long-term savings or fixed deposit accounts. Consumers should seek advice to determine their risk tolerance, short, and long-term investment needs.
Other Benefits Consumers Should Know about Ally Bank
It is understandable when consumers may want to steer clear of banks considering what happened in 2008 and the years thereafter. The concern of an online institution only makes it shaky for consumers to put their trust, and cash into a banking institution again.
The Federal Deposit Insurance Corporation insures deposits made into the Ally Bank Online Savings Account up to the maximum allowed by law. This gives consumers that extra bit of assurance that their funds are in good hands.
Ally Bank also has many ATMs scattered across the country which allows easy access to funds when required.
How To Open an Online Savings Account with Ally Bank
There are only six steps required to open an Ally Bank Online Savings Account. The account is open to those who live in the United States only, to ensure that the bank fulfills Federal requirements. Those over the age of eighteen with a US mailing address can open an account.
The customer chooses the option that describes them best, whether they are a new or existing customer, and whether they’ve started an application or not.
This takes a customer to the product screen, where they will choose the Ally Bank Online Savings Account among the options listed there. This is also where customers will note the amount they wish to deposit.
Customers will choose whether the account is an Individual or Joint Account. This screen will create a pop-up where customers will enter all relevant information.
This screen allows customers to create their account.
Customers will decide which method they will use to make their opening deposit.
This is the final step in the account and takes customers to the online banking screen. Once the customer completes all the relevant information, the account is ready for use.
The entire process should only take 10 minutes and guests can transact as soon as their deposit reflects. Customers can also decide whether to open the account for a Trust or UGMA.
Ratings and Reviews of Ally Bank
Ally Bank enjoys a rating as the Best Online Bank in Time.com’s Best Banks in America 2015-2016 awards. Consumers are hard-pressed to find another online banking institution to equal it.
Nominated as the best online bank five years in a row, the bank holds the title from 2011 through 2015 by MONEY® Magazine
Screenshot of the “Best Online Bank” Award ©Ally Bank
Customer satisfaction is fairly high as well, with the bank enjoying an average rating of 4.6 out of five. This is what customers have to say:
My Review: 9½/10
With all the positives this account has to offer, it is hard to find any drawbacks. My review is based on the following:
- Short-term savings, high interest: compared to many of the other short-term savings products on the market, this one offers a rate that’s favorable and fees that are low.
- Simple opening procedure: Six steps with just the bare necessities, no need for mountains of paperwork.
- Direct explanations: Help icons provide insightful information that doesn’t confuse. The site has no bank jargon, making the decision-making process a lot simpler.
- Upfront disclosure of fees and rates: Customers are aware of the costs before signing up, as well as any penalties that may apply.
- Easy access: After opening the account, customers are immediately linked to online banking.
- Low costs: Customers enjoy the benefits of an online bank by not having to pay for infrastructure and a fleet of staff members.
Drawbacks to consider:
- There is no physical building, which could be difficult for those who wish to deal with people face-to-face.
- The bank does not accept cash deposits.
- Not for everyday banking.
- Long notice of withdrawal periods – at least 7 working days.
We also did a review on the Ally CashBack Credit Card.