Ally Invest, a top choice among budget-conscious investors, provides a comprehensive platform catering to both beginners and seasoned traders.
Whether you prefer automated, self-directed, or advisor-guided investing, Ally Invest offers a solution.
Their platform boasts commission-free stock trading, user-friendly tools, and round-the-clock market access. However, fees apply to mutual funds, bonds, and certain stocks.
What Should You Know About Ally Invest?
Founded in the 1920s as General Motors' financial arm, the company has evolved significantly. In 2017, they acquired TradeKing Group Inc. and introduced Ally Invest, a dedicated wealth management and brokerage division.
Over the past decade, the company has emerged as a prominent digital financial services provider, offering a comprehensive range of products including banking, lending, home loans, auto financing, and digital wealth management.
Ally Invest Review: Pros
No-transaction-fee mutual funds
Ally Invest made a significant move in early 2023 by eliminating transaction fees for mutual funds, a decision that put them on par with industry leaders. Previously, they charged a $9.95 fee per transaction, while competitors like Charles Schwab, Interactive Brokers, and Fidelity offered thousands of funds commission-free. By removing this fee and offering over 17,000 funds without it, Ally has now joined Interactive Brokers at the forefront of the no-transaction-fee mutual fund landscape.
Low trading costs
Ally Invest stands out as a particularly attractive option for options traders. Their commission structure of $0.50 per contract is highly competitive, significantly lower than the industry standard of $0.65. This makes Ally a strong choice for traders who want affordable options trading without needing to reach high trading volumes for discounts.
While platforms like Robinhood and Webull offer completely commission-free trading, Ally still offers a competitive pricing structure. For stock and ETF trades, Ally is commission-free, aligning with other major online brokers. Bond trades carry a commission of $1 per bond with a $10 minimum per trade.
Integration with Ally
Ally Invest's integration with other Ally services is a significant advantage for existing Ally customers. This allows for seamless consolidation of financial accounts within a single institution, accessible through the mobile app. This streamlined approach simplifies account transfers and reduces delays when moving funds between bank and brokerage accounts. The centralized management of accounts can also be highly convenient during tax season. Ally Invest often feels like a natural extension of the broader Ally website, seamlessly integrated into the overall user experience.
For those seeking an automated investment strategy, Ally Invest Robo Portfolios offers a compelling option. With a minimum investment of just $100, Robo Portfolios create and manage portfolios based on individual goals and automatically rebalance daily.
Mobile app
Ally Invest takes a unique approach to brokerage apps, offering a consolidated mobile experience rather than a separate platform. The Ally Mobile app functions as a central hub for all your Ally accounts, including checking, savings, CDs, credit cards, and brokerage accounts. This all-in-one platform is ideal for existing Ally customers who desire a streamlined management of their financial life.
The user-friendly interface makes it easy to navigate and perform various tasks, such as depositing checks, transferring funds between accounts, paying bills, reviewing tax documents, accessing savings tools, locating ATMs, and executing other banking activities.
For investors, the app provides comprehensive trading capabilities. You can monitor your portfolio with real-time quotes, execute stock trades, and even trade multi-leg options. The app also equips you with charting tools for technical analysis and access to current market news. Although it lacks the full range of features available on Ally's desktop platform, it offers a convenient solution for trading on the go.
For forex traders, Ally provides a dedicated app called Ally Forex. This app facilitates various order types, delivers live news updates from Reuters and weekly reports, enables charting market trends, offers alerts, and allows for comprehensive account management.
Customer support
Ally Invest prioritizes customer support, offering a comprehensive range of options for assistance. They provide 24/7 phone support and an online chat feature for immediate access to a representative. While traditional methods like email are also available, physical branch locations are not an option. However, this absence of physical branches is unlikely to be a significant deterrent for the majority of investors.
Ally Invest Review: Cons
Account fees
Ally Invest's account fees deviate from the norm currently seen at many brokerages. They maintain a $25 fee for IRA termination, with an additional $50 charge for a full account transfer and another $50 for a partial transfer. Standard accounts are also subject to a $50 fee for both full and partial account transfers.
No fractional shares on purchases
While Ally Invest excels in many areas of customer management, its lack of support for fractional share trading is a notable omission. While they don't allow direct purchases of fractional shares, they do enable dividend reinvestment into fractional shares.
However, investors seeking the ability to both buy and reinvest in fractional shares of a vast array of stocks may find better options with brokers like Robinhood and Fidelity Investments.
What makes Ally Invest different?
- Costs: Ally Invest caters to both novice and seasoned investors with its cost-effective approach. They offer commission-free trading on eligible U.S. securities, no account minimum requirement, and low-cost options trading. In February 2023, they eliminated the $9.95 fee for mutual fund trades, making over 5,500 mutual funds accessible with no transaction fees.
- Advanced features: Beyond competitive pricing, Ally Invest distinguishes itself with advanced features. They provide an automated portfolio management option and a suite of free tools tailored for technical investors.
- Cash management: In terms of cash management, while uninvested cash in Ally Invest brokerage accounts doesn't earn interest, they offer instant money movement between Ally savings and brokerage accounts, enabling investors to capitalize on interest rates significantly higher than the typical sweep interest rates offered by most brokerages. However, this feature necessitates opening a separate Ally savings account.
Trade Experience
While Ally Invest's trading experience is functional for most traders, it lacks some advanced features typically found on newer platforms. Their order functionality is basic, lacking support for contingent orders like stop losses, take profits, and trailing stops. Furthermore, short selling is restricted to margin accounts, requiring a completed buy order before placing a stop.
Despite these limitations, Ally Invest offers a user-friendly interface with strong menus for navigating different securities. They provide options for selecting various strategies, including multi-leg strategies, streamlining the trading process.
However, Ally Invest currently lacks order routing, automated trading, and the ability to create customized orders based on criteria beyond price. While charting tools are available, they lack dynamic features like displaying current orders or drawing tools.
Options analysis tools are accessible on the Ally Invest website but not on the Ally Invest Live platform, which, while offering helpful tools, creates an awkward experience. The handling of open orders and order status is comparable to other online brokerage platforms.
Trading Technology
Ally Invest's trading technology is functional, but the platform could benefit from modernization, specifically by incorporating features such as conditional orders and trailing stops.
While the platform supports four-leg options strategies and provides streaming quotes for up-to-date pricing, the order entry process is basic and lacks integration of positions or orders into charts. Additionally, Ally Invest currently doesn't offer order automation or control over order routing.
The primary Ally Invest website serves as a bridge to Ally Bank, allowing users to leverage Ally Bank's competitive short-term interest rates for cash balances. Options trading differs between the Ally Invest website and other platforms, with the website providing a comprehensive suite of tools.
These tools include the ability to visualize probabilities for market movements within or beyond defined ranges and dates, as well as profitability graphs showcasing option price and profit at maturity. While not industry-leading, these tools are helpful and uncommonly offered by online brokerages.
Ally Brokerage Account: Bottom Line
Ally Invest's $0 account minimum and commission-free trading on eligible U.S. securities make it a compelling choice for all types of traders. Their low $0.50 options contract fee is particularly attractive for options traders.