When we first started banking online, we opened an account with ING Direct. They were one of the pioneers in online banking, and they also used to offer some of the best rates around. Since that time, a number of competitors have appeared and ING has struggled to keep up in terms of rates.
In the past few years, we’ve opened accounts with a variety of other online banks, including FNBO Direct, EverBank, and Ally Bank (though it was GMAC Bank back when we opened our account). While we’re still using ING Direct, we’ve recently been transitioning more of our business to Ally.
Why? In part because they’ve consistently offered some of the best online savings interest rates, and have also been very competitive when it comes to CD rates. In the few times I’ve dealt with their customer service reps, I’ve also been highly impressed (though the same can be said for ING Direct).
The latest thing that makes me love Ally is a letter that we received over the weekend regarding one of our CDs. Here’s a portion of the text:
Part of our commitment to being a better bank means offering better products. That’s why your 2-Year CD is now the Ally Raise Your Rate CD. The current rate and existing term for your Ally Raise Your Rate CD will remain the same, but we’ve added a new feature which allows you a one-time rate increase if our rates go up during the remainder of your term. You can take advantage of this benefit by just giving us a call.
While other banks have been making one anti-consumer decision after another, Ally is not only improving their products, but they’re also offering these improvements to exiting customers who already have their money locked away in a CD.
In reality, this CD expires in less than a year, and it’s unlikely that rates will rise enough for us to benefit. Nonetheless, it’s nice to see a bank doing the right thing when it comes to taking care of their customers.
See also: Ally Bank Review
Ally is no better than BoA and Chase. Thieves that use different names to get your money. Ally being the old GMAC should be enough evidence for people to bail and run.
“I love Ally Bank”. LOL I’m sure people said that about WAMU too. Fools.
PJ
Ally Bank is nothing But a new GMAC that got bailed out for 6 billion… I wouldnt put a penny in that rat infested piece of junk bank….There rates arent that good anyway.. go to a local credit union.. They sign anybody up now… As an Ex bank examiner I will tell you this.. If the rates are much higher than the competition the bank is in trouble.
Isn’t nice that Ally can get tax dollars to pay a higher rate to customers while other banks that didn’t get in trouble by making bad decisions have to tough it out. I would never open an account with Ally because I try to reward good behavior by my choices, not bad behavior.
Ally bank is not who they say they are. They GMAC have taken BILLIONS from tax payers and in return, Devastated the Automotive retail industry in there quest to receive TARP funds by becoming a bank. They have repeatedly been dishonest about there business practices and the ruse or ALLY bank is just another way for them to hide who they really are.
That is what is wrong with many people. It is ok to take advantage of a gain for me as long as I don’t get hurt the heck with everyone else. Ally was required to raise capital and took tarp money as well as GMAC. They (Ally) lost several million dollars in 2009 and based on fianancial reports continue to invest in derivative futures risking not only their own capital, but the tarp money given by tax payers. This is a bad business model for a bank that is lending its depositors money and if not lending then investing/derivatives. check out the UBPR at the FDIC web site.
I have to laugh at shmedrick being an ex bank examiner. That sounds about right. I figured anyone throwing around the term “proles” again and again in condescending fashion was from the lower rungs of the financial world. People who are more accomplished just don’t act like that.
I also laugh at a bank examiner believing that depositors go lengthy periods without their funds when a bank fails. Over 200 banks have failed in 2009 and 2010, and I’ll bet you can’t name a single specific case in which depositors have had to wait. Because it doesn’t simply happen.
Here’s a timely news item: GMAC Financial Services, the auto and mortgage lender that took three government bailouts to the tune of $16.3 billion last year, posted its first quarterly profit on Monday since receiving Troubled Asset Relief Program, or TARP, funds.
And that’s not all: Now the company, which was once wholly owned by General Motors, wants to change its brand, distancing itself further from the struggling automaker — at least in name. On May 10, GMAC will rebrand itself Ally Financial Inc. to reflect one of its most successful businesses, Ally Bank. The online bank reported $231 million in income in the latest quarter. After factoring in losses from other divisions of the company, GMAC as a whole, reported first quarter earnings of $162 million, compared with a loss of $675 million in the year-ago quarter.
I agree with Meg 100%. Ally will never receive any of my money. The only reason they are where they are is because of government bailouts that should never have happened in the first place.
Using tax payer money to gain a competitive edge over competitors is awful. I will sit back and wait for them to inevitably fail again.
ALAN
I dont give a rats butt what you think.. I am an ex bank examiner who has closed down dozens of banks. The FDIC is a joke. do you know that they did not collect any premiums from most of the banks for the 10 years prior to 2008. the 3.5 billion bailout was when I said it was. Just becasue you read whatever in the paper doesnt mean its true… You know what people like you are called…. PROLES.
I stick by my first post….. good luck to you… you will need it in the future
shmedrick, GMAC’s $3.5B bailout was more than a few weeks ago. You’re off by a few months actually. And can you tell me why I should care? Are you back to your “Texas Ratio . . . be afraid . . . you will remember this post” point? As I’ve explained, there is nothing to be concerned about. The worst possible scenario would be that Ally would fail and depositors would have to wait 4 or 5 days for a check from the FDIC. If that strikes you as catastrophic (and you give every impression that it does), knock yourself out. And to be clear, the higher yield (which is 20 bps not 50) is a very minor reason to bank with Ally. There are several others that are more important to me, all of which have been discussed above. I sense that the political angle is a big one to you. I personally couldn’t care less. Out of curiosity, what other institutions do you boycott? Is it a long list? Is it like an Enemies List?
stay away from ALLY you have been warned… A blind dog knows better than some of you trying to chase 1/2 a point from a General motors bamk… And, no, General motors did not pay back their total loan.. smoke and mirrors… How many of you know that GMAC got bailed out a few weeks ago for 3.5 billion? PROLES
Back to the subject of safety — in today’s news there is a good example of how quickly customers of a failed bank have access to their funds. The FDIC just closed a bank called CF Bancorp on Friday evening, April 30th. Saturday morning, May 1st, the bank is open for business under the new owner’s name (First Michigan). Customers can continue to write checks on their old accounts, use their debit cards and use ATMs as they’ve always done. This quick turnaround is normal. A few comments above have said things like “tread carefully” because if a bank fails the FDIC might take months to pay you, and another comment suggested that people should worry about things like the Texas ratio, etc. In my opinion, (a) Ally is safe and (b) if it’s not, it doesn’t really matter much.
Poor customer service is a completely separate matter obviously. I’ve received excellent customer service, but for those who haven’t it makes complete sense to vote with your pocketbooks by moving your money elsewhere.
Jeff, I agree with you that it’s ridiculous to leave the non-sufficient funds notes on our accounts (I’ve had perfect credit for more than 25 years). Not only that, I was told via online chat (I captured the screen) that I would receive a $25 bonus deposit as an apology. However, an associate via phone said that was untrue; that I was misinformed. Then a manager said that I would indeed get it within 24 hours, and he would phone me the following day to ensure I was properly compensated for my telephone time and troubles. He did not call. All I received was this blanket email from Ally:
——–
You may have recently experienced some issues with incorrect fees or trouble setting up new transfers. These system issues have been resolved and we’re actively working to prevent instances like this from occurring in the future.
We sincerely apologize and want you to know that we take this very seriously. At Ally Bank, we continuously strive to ensure your experience with us is a positive one.
We truly appreciate your business. If you have any questions, please don’t hesitate to contact one of our Customer Care Advocates at 1-877-247-ALLY (2559).
Thank you,
Ally Bank
———-
After this travesty, I cannot close my accounts quickly enough.
the non sufficient funds thing happened to me too. i chatted with somebody who was limited in her ability to help so while I was happy with the customer service rep I was angered at the ability Ally gave her to help. 2 non sufficient funds charges and 2 credits.
I asked instead of just crediting my account can you wipe them off my account. the answer..no. So now I have 2 non sufficient funds notes on my account.
Also asked for some sort of id number for our chat indicating the rep told me everything was ok so that I have something to fall back on. nope. so all i have is the chat reps promise that all will be ok and that she will put notes of our chat on the account.
yeah right.
ALLY BANK? You must Jest…. the easiest way you can tell a bank is in trouble is if they have rates better than anyone else.. ALLY Bank is GMAC…. why do you think they changed the freaking name… would you put your money with GMAC…. well you are with ALLY…
By the way.. GMAC just got a 3.5 billion dollar bailout from your gvt 2 weeks ago… So,, go chase that 1/2 percent difference…. What a bunch of Proles.
In todays market Bankrate ratings donr mean diddly… If you want to know how your bank is doing get a hold if you can of something called the Texas Ratio… You will remember this post.
#16 CF) I am going paperless with Ally — I get an email when new statements are ready, go to the website, and print them off myself. I’m only using their Online-Savings account.
Does Ally still send paper statements? When I previously had an account with GMAC Bank, it was not an option to select paperless statements – they had to send one. Pretty odd for an online bank. I moved to ING (not just for that reason, but that was part of it).
I think I will stay with USAA. It pays lower in savings but has a higher rating. I am through chasing savings rates, first Cap. One, then Smarty Pig. Smartypig is dropping interest from 2% to half % for accounts with over 50K$ in them. They only want small savers.
Kirk,
Anyone worried about FDIC insurance is worried over nothing, in my opinion. That 99 year rule you mentioned is complete fiction / urban legend. If you doubt me, Google it. The FDIC debunks that myth on its website as do several other sources. Or go by common sense: FDIC insurance is intended to alleviate fears and prevent a “run on the bank”. If you had to wait any material length of time to get your funds, people would continue to be afraid and there would be every incentive to start a run on the bank. Our government does many stupid things, but a 99 year rule is too stupid even for them to adopt.
In the overwhelming majority of cases, the FDIC announces the takeover of a troubled bank after close of business on Friday and the bank is re-opened on the following Monday (in the hands of a new owner), and depositors with insured deposits have full access to their funds that Monday. In the rare cases in which a new buyer can’t be found, the FDIC liquidates the bank and begins mailing checks for the full amount of your funds on deposit that Monday. I know this from experience. I had a high yielding CD with Advanta Bank that was shut down a few weeks ago. 5 days after I saw the headline that the bank was closed, I had a check from the FDIC for the full balance of my account. I knew the bank was in poor shape when I opened my account. But regardless, and to repeat FCN’s point, Ally is rated 3 stars; it’s safe.
Also, while you are technically correct that Ally Bank has never turned a profit as a stand-alone company, that’s a bit misleading because it has been a stand-alone company under the Ally name for less than one full year (I believe the name change was in May 2009). Prior to the name change, they were profitable in 2005, 2006 and 2007 before losing money in 2008 (like many other banks did). If anyone wants to see the financials, Google “FDIC Call Reports”. The website is pretty intuitive; you would simply search it for “GMAC” or “Ally”, depending on the time period you are interested in. I think the current losses are being generated by massive spending on advertising as they attempt to grow.
#12: BG, I went in with such high hopes! I’ve had ING for 5 years, and never even had to call customer service. But while I was willing to let the little things go in setting up Ally, (not getting the cards or checks as promised), having money disappear from my account is just too much.
#11 Janice) Wow! I’ve had nothing but a good experience with Ally.
I am on hold with Ally Bank as I write this. I’ve been on hold for 19 minutes now, waiting for a supervisor. I am very dismayed right now, as I just opened my checking and savings accounts two weeks ago and I’ve had nothing but problems. I was incorrectly told they would send both my husband’s and my debit cards, but then they only sent mine; I had to phone twice to get my free checks even though I requested them online and received a confirmation; and today I went online and saw that they’ve charged me two non-sufficient fund fees. I’ve never overdrawn in my life, so I furiously called Ally. Seems a glitch did this to many people this morning (April 28), and it will take “a day or two” to have the money credited back to my account. I really had hopes for Ally, but I’m sticking with ING Direct, running back with my tail between my legs.
are there any new customer deals being offered by Ally (like the $50 ING bonus to open a savings acct?)? Just curious 🙂 Thank you!
Despite the comments that Ally isn’t in trouble, you need to tread carefully. By current accounting, BofA, Citi and many other banks are not insolvent. If mark to market were in place, they would be.
Ally has been able to use the bailout dollars to attract new investors by offering higher rates. They are gambling with our money. Ally bank has yet to turn a profit as a stand alone so that should tell you something. The bank is still tied to GMAC financing. So if GMAC finds the auto and home loans go bad then Ally could be in trouble. This isn’t like the Lehman situation.
Banks that are offering higher rates are playing a game of chicken. They are attempting to attract capital to cover any potential losses in their lending divisions.
Now, you may feel easy that you have FDIC insurance, but remember that FDIC can hold up your assets for some time. Legally, they have 99 years to repay. I doubt they would take that long, but what if your money sat there for 6 months with no interest. Not a great deal at that point.
I’m a huge fan of Ally Bank as well. Previously I started on ING Direct (like everyone else) and moved over to HSBC. The last 12 months or so I grew increasing frustrated with them due to lowering rates and ‘international’ customer service. In other words, you’re talking to some random person overseas whose following a script and is of minimal help.
So I gave Ally a try. The customer support is domestically based with little/no wait time. Online interface and easy of use is great. Interest computed daily. What’s not to like. I can forgive the TARP money, since I’m receiving 2X what other banks are offering and of course its FDIC insured. Worth a look to the still-skeptics out there.
@Alan – That’s great clarification as I thought Ally was recapitalized when GMAC received a government lifeline. Good info to know.
I have two sets of comments. First, I love both ING and Ally, and I plan to continue using both for the foreseeable future. As noted by FCN, Ally’s rates are better now, so I’ve been moving more of my funds there. In addition, it’s nice that they offer free paper checks, and they offer a larger number of linked accounts than ING does. Lastly, Ally allows you to use any ATM in the country for free (reimbursing you for fees charged by other banks), whereas ING has one ATM network that can be used without charge. But I also like ING’s “paperless” checking account which allows you to snail mail a check at their expense from your computer. I also like both companies’ websites and the customer service at both.
Second, I just want to clarify the relationship between Ally and GMAC. Ally Bank, formerly known as GMAC Bank, has been a subsidiary of GMAC for quite a while. It has operated as an “industrial bank” since it was formed. GMAC is the parent company, and it filed to become a “bank holding company” in late 2008. Neither Ally nor GMAC is insolvent, and Ally has never been close to being in any kind of financial trouble. It’s a completely separate stand-alone company with a solid balance sheet, and even if GMAC were to go belly up, it wouldn’t affect Ally Bank. Lehman Brothers owned a bank, and when Lehman was liquidated in bankruptcy court in 2009, the bank was sold. It continues to operate as Aurora Bank.
Meg: Bankrate has Ally rated at 3 stars, which is better than money of their online competitors. They’re not insolvent.
Evan: Their rates aren’t out of line with other banks. Yes, they’re on the high end for online banks, and have consistently been in that range, but they’re on par with the likes of DollarSavingsDirect and actually slightly lower than Discover Bank.
FCN,
Notwithstanding FDIC insurance, does it bother you that their rates are killing similar competition? I remember right before WAMU went under they doubled CD/Savings Rates.
I was really into Ally Bank briefly too, and almost opened an account with them until I realized that they are a division of GMAC.
GMAC won government approval to turn itself into a bank last year just so it could qualify for TARP funds. Currently the government owns nearly 35 percent of GMAC under the terms of a $12.5 billion bailout. The company is insolvent and is soaking up billions of taxpayer money while taking jabs at “traditional” banks in their TV commercials and using taxpayer money offer above market rates.
I say thanks but no thanks to their desperate (though slick and cleverly marketed) attempt to buy enough customers to avoid being liquiditated.
I like Ally’s online chat option, which allows me to ask detailed questions by chat and not pick up a phone. Chatting allows me to dispense with pleasantries, phone trees, and being put on hold. I have used Ally chat four times and each time, the chat associate was able to answer my questions within 2 to 3 minutes. Lots of time saved.
I used to keep funds at Dollar Savings Direct online savings account. They require $1k minimum and allows me to link to only two external banks. In comparison, Ally requires no minimum (or $1??) and allows me to link to unlimited number of external banks. After my interest at Dollar posts this month, I will transfer my funds from Dollar to Ally and close the Dollar account.
I love Ally Bank as well.
Since creating my short-term CD ladder (12-month CDs that expire every 1 month), I have receive multiple notices with Loyalty Bonus rate increases for their CD’s. So far, I’ve received 2x 0.50% rate increases and 3x 0.25% rate increases. A great company!