A few weeks ago, we received a letter saying that GMAC Bank had been re-branded as Ally Bank. We actually opened a GMAC account last fall (more on this below), so I was quite interested when I heard this news.
If you’re in a rush, and just want the executive summary, here it is:
Ally Bank is a great online savings option. They’re FDIC insured, they offer a wide variety of products, they don’t have any minimum deposits or balance requirements, and they don’t have any account maintenance fees.
If you’d like more info, read on…
A short history of GMAC/Ally Bank
The GMAC brand actually goes back to 1919 when GMAC Financial Services was established as a wholly-owned subsidiary of General Motors to provide financing for automotive purchases following WWI. GMAC eventually branched out into retail banking, offering savings account, certificates of deposit, money market accounts, etc. under the GMAC Bank brand.
In 2006, GM sold a majority stake in GMAC to private investors, thereby providing a bit of distance between the now-bankrupt automaker and the financial services company. Nonetheless, the name stayed, and consumers no doubt wondered about the stability of the bank given its apparent connection to GM. Hence, the name change — Ally Bank.
Having logged in and poked around, it appears that little else has actually changed — and that’s a good thing. Their rates are still highly competitive, and the web interface is as convenient and functional as ever.
Ally Bank products and rates
We were first attracted to Ally Bank last fall by their high CD rates. At the time, we were looking to set up a five year CD ladder, and we also wanted to keep things fairly simple. We were thus pleased to see that Ally offered the highest rates across all maturities.
One particularly interesting product is what they refer to as their “no penalty CD.” This CD allows you to lock in a great rate (though not quite as high as with a traditional CD) while still retaining the flexibility to break the CD without penalties. Thus, if an emergency arises, or if rates simply raise, you’re covered.
Note that they also have a highly competitive online savings rate, as well as a slightly lower (but still high) money market account rate just in case you want a check card and check-writing ability.
Customer service
When it comes to online savings accounts, I look at one thing above all others — the interest rate. Nonetheless, it’s still nice to be able to reach out and touch an actual human being if/when trouble arises.
The good news here is that Ally not only publishes a customer service phone number in the top right corner of the page, but they also disclose the expected wait time right next to the number (see below).
I just tested the system at 9:10 AM Eastern on a Monday morning and, sure enough, they picked up less than 10 seconds after I indicated that I wanted to speak to a CSR.
Closing thoughts
If you’re looking for an excellent online bank with highly competitive rates, you should seriously consider Ally Bank. We’ve been very happy with them over the past eight months or so, and have actually been thinking about opening another account with them to hold cash for a trust that my wife and I manage.
This May, I recently have been hit with one of Ally’s computer gliches. I had opened an initial account about one month ago and because it was going well, I decided to open another account with them.
Then the huge problem arose!
Ally bank has a feature that if you verify an account with the same test deposit numbers than it automatically initiates a transfer from an external bank into your other account.
For example,
1. Account # 1- You open your account with $1000.00 and you have verified your test deposits.
2. Account # 2- You decide to open another account and use the same test deposits but this time only want to open your new account with $100.00,
Then
3. A transfer of 1000.00 will initiate to account # 1.
Leaving you with no solution and alot of overdraft fees from the external bank account.
Ally bank made it clear that they don’t have a gliche in their system, and I informed them that if I wanted to transfer $1000.00 from my external account into my Ally bank account then I would have specifically did just that. But this was not the case. Instead you use the same test deposits of $0.45 and $0.22 and this is what happens.
Has anyone else incurred this type of problem because I do not believe that I am the only one.
For professional purposes, Ally bank should have at least tried to care about this gliche or the customer but that was surely not the case. They were dumbfounded!
What else can I say, I’ve been duped by this bank, hmmm no surprise there I guess.
The rates are good and competitive. I have multiple accounts and CD’s. There customer service experience is exasperating and painful. Even after calling the corporate office, they do not care. The constant shuffle off until you give up. Don’t bother. In the future I will take the lower rate of my local bank and deal with folks who actually care about my business.
How do i apply for an escrow acct
Don’t trust Ally bank!
My wife and I tried to open a CD account with them. After several back and forth phone calls and requests to establish our residence and mailing addresses (in addition to our original paperwork and copies of our drivers licenses they wanted utility bills and a copy of our PO Box receipt), we told them to return our money. Their customer service said they would send our original check back. They didn’t. We never had an account with them but they cashed our check. Our bank statement showed the check was paid.
When I called to ask why my check was cashed, no one could explain. They told me that they would send my complaint to an escalation team for immediate resolution and they would call me back with the results 2 days later. No one ever did. When I called them to find out the status of my check, I was told that my account was pending and that in 5 days or so, they would review the matter. After yelling at the CSR, I was put on hold and eventually told by the rep that she made a mistake, my check was already mailed. I would have it in 7-10 working days.
A few days later, Ally called me again. This time, I was told that I would have to prove that the check had been cashed in order to receive a refund. So basically, they never opened an account for me, they cashed my check, lied to me that they had already refunded my money, then called me and told me that I had to prove my check had been cashed to get a refund. This is after they acknowledged receiving the check and accidentally cashing it. They knew the check number and the amount but still no refund. Unbelievable.
In all, they’ve held my money hostage for a month. Someone either lost or stole my check and they won’t give my money back yet. Don’t give this company your business.
I have been with Ally (GMAC) for 3 years. I had no problem with GMAC before.
Recently I spend 2 months in Ally and still can not open a new account, this experience is very frustrated. The customer representatives have inconsistent answers. One day they call you with one answer, and please don’t feel surprised for the call from them in the following days with another answer; I fax the documents to them, and they can not find/locate the fax. I am tired with several rounds of this kind of inconsistence.
My question is:
If representatives can NOT provide standard guidance/answer, what’s the meaning of customer service of the bank?
Although they have 7-24 call service, it won’t help if they can NOT solve your problem. (In fact, it wastes your time!)
I am searching for another bank with relative high rates. Enough is enough.
Greg, thanks for that link. The accounts are FDIC insured, and the CEO (from the article) says that Ally bank has triple the well-capitalized minimum — so, I don’t understand what the American Bankers Association is really complaining about. If the ABA thinks that the minimums are too low, and invite risk — then the ABA should petition the FDIC to raise the minimums, not try to force Ally to pay less interest on deposits.
BTW: on Ally’s website, it shows the classic 9 month CD paying at 1.83%, but the no-penalty 9 month CD is paying %2.27. That can’t be right…
You might want to read this article before depositing money in Ally:
http://money.cnn.com/2009/06/03/news/ally.enemy.fortune/index.htm
Sabrina and Kev: FWIW, I just checked Bankrate’s Safe & Sound ratings, and GMAC (that was their name at the last rating) has three stars. This puts them ahead of banks like ING. Of course, Bankrate only updates the data quarterly, so that could be a bit out of date.
They recently failed the government mandated stress test and are currently in the “lets offer killer deals in a desperate attempt to raise capital” phase. The only reason they still have a pulse is b/c of you… and me… and everyone else who generously donated their tax dollars.
The decent rates on the their savings accounts and CDs will most likely be history by the first of year, so enjoy it while you can…
I have a friend who has worked in banking for 12 years. Her opinion is that they are already losing money and would never put her money there even if they are FDIC insured.
I opened an on-line savings account with GMAC (now Ally) just a few months ago. I have had an ING account since 2003, but the rates are consistently low as compared with other on-line savings accounts.
I opted to open an MMA with just $1.00 at the same time. Why? Well, you can transfer from your savings to your MMA on-line or over the phone, and the transfer posts instantly. Since I have a checkbook for the MMA, I can have immediate access to the funds should I need them. That knowledge makes me happy.