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More and more people are turning to online banks for their banking needs. As a child of the recent recession, Ally Bank knows what consumers want and need. Formerly known as GMAC, a lender associated with General Motors, it decided to rebrand under a new name and offer new financial products.
Its focus has switched from automotive financing to becoming a leading competitor of online banking, offering high-yield interest products. The FDIC insures Ally Bank, so consumers can be confident that their funds are secure. This Ally Bank Savings Account review will walk you through everything you need to know about the account.
Opening an Ally Bank Savings Account
In order to open an online account, applicants will need to provide their driver’s license and social security number. Those who recently had a name change should make sure the name on their driver’s license matches the name on their social security card.
Ally Bank performs a credit check to verify identity; however, the bank may also choose to deny your account if it considers you a credit risk from this report.
As you set up your new Ally Bank savings account, you will be required to set up security features such as a strong password, security image, and security questions. You can register the browser you primarily use to avoid answering the security questions each time. It is recommended to do this on a private computer in order to ensure that personal information is not shared with others.
In the future, if you sign in from an unknown browser, Ally will send a one-time-use password to your email to verify identity; having access to email is an important aspect of banking with Ally.
About Ally Savings Accounts and Products
Ally Bank currently offers an online savings account that yields 1.05 percent interest. The bank also offers money market accounts, certificates of deposit(CD), and even interest-gaining checking accounts to help you grow your savings.
Money market accounts currently yield 0.85 percent interest per year. High-yield CD accounts offer interest at 1.5 percent; deposit durations can range from three months to five years with variable interest rates.
Ally also offers a two-year or four-year Raise Your Rate CD. With this type of CD, if interest rates go up, consumers may raise their rate one time with a two-year CD or two times with a four-year CD.
Ally also currently offers a No Penalty CD for 11 months with an interest rate starting at 0.90 percent; there is no penalty for withdrawing money early from this CD.
Consumers can also earn interest on a checking account with Ally, starting at 0.1 percent. Note that all interest rates in this paragraph are current as of the time this piece was written.
Retirement Savings Plan Available With Ally Bank
If you are interested in saving for retirement, Ally also offers IRA CDs and savings plans at rates comparable to their other CDs and savings accounts. The company offers Traditional IRA, Roth IRA, and SEP IRA.
The SEP IRA plan is for self-employed business owners and employer contributions. These plans are typically tax deductible, and interest is typically tax free, unless funds are withdrawn too early.
Retirement plans have maximum contribution limits and some have required minimum annual distribution after halfway through age 70. These limitations are put in place through the IRS, so it is important to speak with a tax professional, financial advisor, or other trusted consultant to understand the details of each plan before depositing money into a retirement account.
Benefits of Ally Banking
Ally Bank allows consumers to create multiple savings accounts. This can help with an envelope budget by naming each savings account after different savings goals.
For example, a person may create a savings account for certain bills that do not come out every month, a savings account for vacations, an account for home or auto repairs, and an account for child expenses such as college.
The easy-to-use online interface lets you view account balances at a glance and manage any of your accounts quickly and easily. Ally also provides a CSV spreadsheet for download in case you need to use Excel to reconcile any differences that may arise. You will also have access to your accounts across all devices and 24-hour customer service.
Possible Fees Associated With Ally Bank Products
There are no monthly maintenance fees and no daily minimum balance requirements with Ally accounts. However, if you exceed six withdrawals per month from your Ally Bank savings account, there will be a $10 fee. Cashier checks and bank wires also carry an additional charge. The charge for a return or bounced check is $7.50. When using CD products, be sure to understand the penalties if funds are withdrawn before the CD is mature enough to cash out.
Ally Bank is quickly becoming a leading competitor in the online banking industry. The benefits Ally offers apply to a wide variety of people. With rising market prices, Ally Bank is a good option to consider if you are looking for free interest-gaining checking and high-yield savings products for current use or even retirement planning. The 24-hour customer support is there when you need it. When you think next-generation banking, think Ally Bank.
Author: Jeff Gitlen