Ally Invest Review - Cheap? Yes. But Is This Robo-Advisor for You?

There are countless online brokerages out there, offering a veritable buffet of options when it comes to getting started as an investor. That being said, not every investment platform has the right features and functionality for every investor. As such, it’s important to do some research and reflection before opening an investment account at any brokerage firm.
Ally Bank has gained notoriety in recent years as an online banking solution that offers competitive high yield savings accounts; however, Ally financial also offers brokerage accounts in addition to bank accounts. Before you select them as your brokerage, here are a few pros and cons to keep in mind about opening an Ally Invest account.

What is Ally Invest?

Ally Invest started as a low-cost brokerage in 2005 with a focus on offering a variety of options to meet the needs of new investors as well as active traders. Ally Invest puts the power of choice in your hands as an investor, since they offer both self-directed trading as well as managed portfolios to their account holders, rather than focusing on one or the other like some other online brokers.
For investors interested in self-directed trading options, Ally Invest offers several perks when it comes to account minimums and other annual fees. Stocks, ETFs (also known as exchange-traded funds), and options trades are all offered commission-free. While your options trading won’t be subject to commissions through Ally, you will have a $0.50 fee per options contract. That being said, with no account minimums and fees on most trades, the do-it-yourself investor will find a lot to love with Ally—and will keep more of their return in their pocket as a result.
If you’re an investing neophyte and would rather use a robo-advisor to help you achieve your investing goals, Ally Invest can accommodate that as well. While a managed portfolio with Ally does require a minimum investment amount of at least $100, there are still plenty of perks to choosing a managed portfolio through Ally. For starters, you won’t pay any advisory fees or rebalancing fees on your account—and the same goes for annual charges.

How does Ally Invest work?

Signing up for Ally Invest is relatively straightforward and process to complete online. The first question you’ll be asked to answer is what investment approach you’re considering. Experienced investors or those that want full control of their portfolio should select “Self-directed trading,” while those that want to take advantage of Ally’s low-cost robo-advisors should select “Create Your Plan” under managed portfolios.
Ally1

Opening a self-directed investment account

To open a self-directed investment account with Ally, you’ll start by registering for an account using your legal first and last name and your email address. If you already have an Ally bank account, you won’t need to register first.
After you’ve set up your account, you’ll need to provide some basic information, including what kind of account type you want to create. Your account type can be set up as an individual investor, a joint account, or an IRA. You’ll also need to provide your social security number, birth date, country of citizenship, marital status, and the number of dependents you have.
Ally2
Once your account has been submitted and accepted, you’ll be able to fund your account by linking your bank account and adding funds.

Creating your managed portfolio plan

When it comes to creating a managed portfolio through Ally Invest, the process is quite similar to creating a self-directed account; however, you’ll first be asked to reflect on what your financial goals are as an investor first. By determining whether you’re working towards retirement, generating more income, building wealth, or a major purchase like a home, Ally will have a better idea of what sort of investing strategy is most likely to serve your goals.
Ally3
After you’ve clearly articulated your goals, you’ll be asked to determine what sort of time horizon you’re working with. Ally uses this information to determine what sorts of assets to invest in and how risky it to be in the selections that are made for your portfolio. You can choose between 5 different options: 5 years or less, 6-10 years, 11-15 years, 16-20 years, and more than 21 years. More aggressive decisions will be made with a shorter timeframe, while a longer timeframe may start with riskier investments before tapering off to more tried-and-true securities.
Ally4
Ally will also ask you whether or not it makes sense for you to start a retirement account or not. It’s worth noting that retirement accounts aren’t the only way to save for retirement, but generally speaking it makes sense to choose a tax-advantaged account—especially since, when combined with Ally’s fee-free services, you’ll ultimately make more on your investment by eliminating as many fees as possible in your allocation.
Another factor that Ally Investing considers when weighing the risk for your portfolio is what your current personal finances are like. The stock market is subject to some element of volatility, so Ally needs to understand what your current liquid assets are and how much you intend to initially invest before helping formulate the right kind of strategy for you as a robo-advisor.
Ally5
Ally Invest will also offer you some information about how its trading platform may impact your portfolio with a graph-based form of understanding risk assessment. Using green and red color-coded graphs, it’s easy to get a clear picture of how your investments may boom or bust.
Ally6
Of course, these graphs are just one form of a probability calculator and aren’t based on real-time data. That being said, seeing the highest and lowest potential rates of return can help you easily visualize how even a Very Low- or Low-risk portfolio can outpace even the most competitive interest rates a bank may offer with its savings account.
One thing to note as you’re looking at how your portfolio may perform in its best or worst year is that these percentages aren’t factoring in trading fees or transaction fees. This helps to illustrate why using a discount broker that offers free trades like Ally can be a powerful tool in maximizing your wealth. If you’ve invested in a series of mutual funds or ETF funds, the fees associated with these trades can cut into your returns, and even 1% or 2% can make a difference when you’re considering a portfolio that may someday be worth hundreds of thousands or millions of dollars.

How much does Ally Invest cost?

For the most part, Ally’s pricing and fee structures are as close-to-free as you can get. That being said, there are a few different types of transactions that may cost you some money and have the potential to add up a bit. For example, if you’re investing in options contracts, there’s a $0.50 fee on these transactions.
You’ll also be subject to some regulatory fees on certain sales, such as the Financial Industry Regulatory Authority (FINRA) transaction fee (TAF). According to Ally’s straight talk fees guide, this fee applies to “all stock and ETF sales at a rate of $.000119 per share with a minimum charge of $0.01 and a maximum charge of $5.95. This fee is rounded up to the nearest penny. Bonds are also subject to a TAF fee and can be charged up to $0.75 per bond traded, regardless of the bond's par value.”

Ally Invest features

Web and mobile trading

Ally offers a host of features in a web-based package that is as intuitive as it is feature-rich. You can access your portfolio, conduct research, create watchlists, and more all from your web browser, smartphone, or tablet.

Knowledgeable customer support

Ally prides itself on the quality and experience underpinning its customer support team. When you have questions about your brokerage account, Ally provides technical support as well as the opportunity to connect with brokers to learn more about the what and why behind your portfolio’s performance.

Secure

Ally takes your personal and financial data seriously. Not only is Ally’s trading platform secure to use from a data standpoint, but Ally is also a member of the SIPC (Securities Investor Protection Corporation), which protects your investment portfolio in the case that Ally fails as a business.

Plenty of options

Ally gives you the power of choice every step of the way. Whether you want to take a hands-on approach to your investment portfolio or are interested in utilizing a robo-advisor to meet your financial goals, Ally delivers. From investing in stocks, ETFs, bonds, mutual funds, options, and Forex securities, you can take your portfolio in a variety of directions using Ally Invest.

Who is Ally Invest best for?

Active investors

If you like to be in the driver’s seat, you’ll find a lot to love using your Ally account for investing. From the diversity of securities and options available to you to the low fees on most types of trades, Ally Invest accounts are a powerful way to diversify your portfolio. Plus, with plenty of tools to assess different trades, you’ll feel confident in the decisions you’re making.

New investors

For those that want a hands-off approach, Ally’s robo-advisor accounts are a powerful way to meet your financial goals. The account creation process triangulates the right risk and investment strategy for your investment portfolio through a series of questions assessing your current financial status, overall goals, timeline, and taste for risk. All of these questions can give you the peace of mind you need to feel confident that your portfolio is set up on autopilot to help you achieve your goals.

Foreign investors

Not every online brokerage lets you tackle Forex investing, but Ally Invest does! If you’re interested in trading foreign currencies for profit, Ally gives you the tools you need to dip your toes in the volatile, but potentially lucrative, market.

Who shouldn’t use Ally Invest?

Investors with limited capital

On the one hand, Ally’s $0 minimum investment requirements mean that anyone can get started with an Ally Invest account. However, if you’re interested in stretching your limited capital as far as it can go, you may want to invest in fractional shares in larger companies. Fractional share investing has caught on as of late, but Ally Invest doesn’t support this sort of trading approach.

Short traders

Another type of security that isn’t supported in Ally Invest is shorts. You’ve likely heard of this risky strategy reading the news about GameStop and AMC as of late. Ally Invest doesn’t offer the opportunity to short any stocks, so you won’t be able to take advantage of this sort of investment strategy with your Ally brokerage.

Pros & cons

Pros
  • Low fees. No account minimums and $0 commissions.
  • Plenty of selection. A wide variety of mutual funds, stocks, ETFs, bonds, and securities.
  • Multi-device use. Mobile and desktop offered.
  • Ally banking. If you already bank with Ally or have an Ally CashBack Credit Card, creating your investment account with Ally is a straightforward process to get more out of your existing Ally finances account.
Cons
  • Online only. No brick-and-mortar brokerage option like larger brokerages such as Fidelity.
  • Some popular securities left off the table. While Ally offers a solid amount of securities to choose from as an investor, cryptocurrencies, and shorts aren’t offered through their brokerage.
  • Functional, not aesthetic interface. Ally Invest’s user interface gets a lot right; however, it’s not as attractive or visually appealing as other trading platforms like Webull or Robinhood.

Ally Invest vs. E*Trade and TD Ameritrade

Ally Invest is one of many online brokerages available to investors. Here’s how Ally’s brokerage accounts stack up against two major competitors: E*Trade and TD Ameritrade.
Minimum investmentOptions Trades feesMutual fund trade feeStocks trade feeVirtual Trading
Ally Invest$0$0.50$9.95$0No
E*Trade$0$0.65$19.99$0Yes
TD Ameritrade$0$0.65Lots of no-transaction-fee (NTF) funds$0Yes

E*Trade

While E*Trade is similar to Ally in that it has $0 commission trades for stocks and no minimum investment, the fees associated with some securities are more expensive than Ally Invest. That being said, if you want a virtual trading tool to practice investing, you won’t find that feature with Ally.

TD Ameritrade

Like E*Trade, TD Ameritrade offers virtual trading for new investors to practice their investing. However, except for trades with NTF mutual funds, you’ll likely be charged more in fees investing with TD Ameritrade than Ally if you’re doing more than stock and ETF trading.

FAQs

How are accounts funded?
Ally Invest offers four different ways to fund your brokerage account. You may fund your portfolio using ACH transfers from your bank, wire transfers, check, or a transfer from another brokerage.
Do I owe taxes on my sales through Ally?
Yes. You’ll receive a 1099 form from Ally for any miscellaneous income you obtain as a result of your Ally Invest account, whether that’s a dividend you receive, interest payments, or the sale of bonds, mutual funds, options, stock, or other securities.
How can money be transferred out of my account?
You can request a transfer from your account via ACH bank transfer which is usually completed in about five days. Ally will process your transfer via check for a $5 check fee and will wire the funds to another account for $30.

The bottom line

When it comes to choosing between online brokerages as an investor, there are a lot of different directions you may choose to take. If you want a more middle-of-the-road approach to create your account, Ally offers the best of both worlds. Whether you want to take an active role in managing your account yourself or take advantage of the estimates and predictions made by a robo advisor, Ally will serve you well. With plenty of data and an in-depth series of questions to help you clearly define your financial goals, you’re in good hands with an Ally account.
Many investors are likely to be attracted to Ally Invest because of its fee-free approach to most securities. However, you’ll be happy to stay with Ally when you experience their top-tier customer service and realize just how easy it is to diversify your portfolio with the swath of securities available on the trading platform. Plus, you can access your account on your smartphone or desktop, ensuring that you’re never unable to make an important financial move.
At the end of the day, every investment platform has its perks and drawbacks. Even so, Ally Invest covers its bases well, only showing its limitations in a few corner cases. If you aren’t an investor with super-specific needs, Ally will likely be a great choice to meet your investing needs.There are countless online brokerages out there, offering a veritable buffet of options when it comes to getting started as an investor. That being said, not every investment platform has the right features and functionality for every investor. As such, it’s important to do some research and reflection before opening an investment account at any brokerage firm.
Ally Bank has gained notoriety in recent years as an online banking solution that offers competitive high yield savings accounts; however, Ally financial also offers brokerage accounts in addition to bank accounts. Before you select them as your brokerage, here are a few pros and cons to keep in mind about opening an Ally Invest account.

What is Ally Invest?

Ally Invest started as a low-cost brokerage in 2005 with a focus on offering a variety of options to meet the needs of new investors as well as active traders. Ally Invest puts the power of choice in your hands as an investor, since they offer both self-directed trading as well as managed portfolios to their account holders, rather than focusing on one or the other like some other online brokers.
For investors interested in self-directed trading options, Ally Invest offers several perks when it comes to account minimums and other annual fees. Stocks, ETFs (also known as exchange-traded funds), and options trades are all offered commission-free. While your options trading won’t be subject to commissions through Ally, you will have a $0.50 fee per options contract. That being said, with no account minimums and fees on most trades, the do-it-yourself investor will find a lot to love with Ally—and will keep more of their return in their pocket as a result.
If you’re an investing neophyte and would rather use a robo-advisor to help you achieve your investing goals, Ally Invest can accommodate that as well. While a managed portfolio with Ally does require a minimum investment amount of at least $100, there are still plenty of perks to choosing a managed portfolio through Ally. For starters, you won’t pay any advisory fees or rebalancing fees on your account—and the same goes for annual charges.

How does Ally Invest work?

Signing up for Ally Invest is relatively straightforward and process to complete online. The first question you’ll be asked to answer is what investment approach you’re considering. Experienced investors or those that want full control of their portfolio should select “Self-directed trading,” while those that want to take advantage of Ally’s low-cost robo-advisors should select “Create Your Plan” under managed portfolios.
Ally1

Opening a self-directed investment account

To open a self-directed investment account with Ally, you’ll start by registering for an account using your legal first and last name and your email address. If you already have an Ally bank account, you won’t need to register first.
After you’ve set up your account, you’ll need to provide some basic information, including what kind of account type you want to create. Your account type can be set up as an individual investor, a joint account, or an IRA. You’ll also need to provide your social security number, birth date, country of citizenship, marital status, and the number of dependents you have.
Ally2
Once your account has been submitted and accepted, you’ll be able to fund your account by linking your bank account and adding funds.

Creating your managed portfolio plan

When it comes to creating a managed portfolio through Ally Invest, the process is quite similar to creating a self-directed account; however, you’ll first be asked to reflect on what your financial goals are as an investor first. By determining whether you’re working towards retirement, generating more income, building wealth, or a major purchase like a home, Ally will have a better idea of what sort of investing strategy is most likely to serve your goals.
Ally3
After you’ve clearly articulated your goals, you’ll be asked to determine what sort of time horizon you’re working with. Ally uses this information to determine what sorts of assets to invest in and how risky it to be in the selections that are made for your portfolio. You can choose between 5 different options: 5 years or less, 6-10 years, 11-15 years, 16-20 years, and more than 21 years. More aggressive decisions will be made with a shorter timeframe, while a longer timeframe may start with riskier investments before tapering off to more tried-and-true securities.
Ally4
Ally will also ask you whether or not it makes sense for you to start a retirement account or not. It’s worth noting that retirement accounts aren’t the only way to save for retirement, but generally speaking it makes sense to choose a tax-advantaged account—especially since, when combined with Ally’s fee-free services, you’ll ultimately make more on your investment by eliminating as many fees as possible in your allocation.
Another factor that Ally Investing considers when weighing the risk for your portfolio is what your current personal finances are like. The stock market is subject to some element of volatility, so Ally needs to understand what your current liquid assets are and how much you intend to initially invest before helping formulate the right kind of strategy for you as a robo-advisor.
Ally5
Ally Invest will also offer you some information about how its trading platform may impact your portfolio with a graph-based form of understanding risk assessment. Using green and red color-coded graphs, it’s easy to get a clear picture of how your investments may boom or bust.
Ally6
Of course, these graphs are just one form of a probability calculator and aren’t based on real-time data. That being said, seeing the highest and lowest potential rates of return can help you easily visualize how even a Very Low- or Low-risk portfolio can outpace even the most competitive interest rates a bank may offer with its savings account.
One thing to note as you’re looking at how your portfolio may perform in its best or worst year is that these percentages aren’t factoring in trading fees or transaction fees. This helps to illustrate why using a discount broker that offers free trades like Ally can be a powerful tool in maximizing your wealth. If you’ve invested in a series of mutual funds or ETF funds, the fees associated with these trades can cut into your returns, and even 1% or 2% can make a difference when you’re considering a portfolio that may someday be worth hundreds of thousands or millions of dollars.

How much does Ally Invest cost?

For the most part, Ally’s pricing and fee structures are as close-to-free as you can get. That being said, there are a few different types of transactions that may cost you some money and have the potential to add up a bit. For example, if you’re investing in options contracts, there’s a $0.50 fee on these transactions.
You’ll also be subject to some regulatory fees on certain sales, such as the Financial Industry Regulatory Authority (FINRA) transaction fee (TAF). According to Ally’s straight talk fees guide, this fee applies to “all stock and ETF sales at a rate of $.000119 per share with a minimum charge of $0.01 and a maximum charge of $5.95. This fee is rounded up to the nearest penny. Bonds are also subject to a TAF fee and can be charged up to $0.75 per bond traded, regardless of the bond's par value.”

Ally Invest features

Web and mobile trading

Ally offers a host of features in a web-based package that is as intuitive as it is feature-rich. You can access your portfolio, conduct research, create watchlists, and more all from your web browser, smartphone, or tablet.

Knowledgeable customer support

Ally prides itself on the quality and experience underpinning its customer support team. When you have questions about your brokerage account, Ally provides technical support as well as the opportunity to connect with brokers to learn more about the what and why behind your portfolio’s performance.

Secure

Ally takes your personal and financial data seriously. Not only is Ally’s trading platform secure to use from a data standpoint, but Ally is also a member of the SIPC (Securities Investor Protection Corporation), which protects your investment portfolio in the case that Ally fails as a business.

Plenty of options

Ally gives you the power of choice every step of the way. Whether you want to take a hands-on approach to your investment portfolio or are interested in utilizing a robo-advisor to meet your financial goals, Ally delivers. From investing in stocks, ETFs, bonds, mutual funds, options, and Forex securities, you can take your portfolio in a variety of directions using Ally Invest.

Who is Ally Invest best for?

Active investors

If you like to be in the driver’s seat, you’ll find a lot to love using your Ally account for investing. From the diversity of securities and options available to you to the low fees on most types of trades, Ally Invest accounts are a powerful way to diversify your portfolio. Plus, with plenty of tools to assess different trades, you’ll feel confident in the decisions you’re making.

New investors

For those that want a hands-off approach, Ally’s robo-advisor accounts are a powerful way to meet your financial goals. The account creation process triangulates the right risk and investment strategy for your investment portfolio through a series of questions assessing your current financial status, overall goals, timeline, and taste for risk. All of these questions can give you the peace of mind you need to feel confident that your portfolio is set up on autopilot to help you achieve your goals.

Foreign investors

Not every online brokerage lets you tackle Forex investing, but Ally Invest does! If you’re interested in trading foreign currencies for profit, Ally gives you the tools you need to dip your toes in the volatile, but potentially lucrative, market.

Who shouldn’t use Ally Invest?

Investors with limited capital

On the one hand, Ally’s $0 minimum investment requirements mean that anyone can get started with an Ally Invest account. However, if you’re interested in stretching your limited capital as far as it can go, you may want to invest in fractional shares in larger companies. Fractional share investing has caught on as of late, but Ally Invest doesn’t support this sort of trading approach.

Short traders

Another type of security that isn’t supported in Ally Invest is shorts. You’ve likely heard of this risky strategy reading the news about GameStop and AMC as of late. Ally Invest doesn’t offer the opportunity to short any stocks, so you won’t be able to take advantage of this sort of investment strategy with your Ally brokerage.

Pros & cons

Pros
  • Low fees. No account minimums and $0 commissions.
  • Plenty of selection. A wide variety of mutual funds, stocks, ETFs, bonds, and securities.
  • Multi-device use. Mobile and desktop offered.
  • Ally banking. If you already bank with Ally or have an Ally CashBack Credit Card, creating your investment account with Ally is a straightforward process to get more out of your existing Ally finances account.
Cons
  • Online only. No brick-and-mortar brokerage option like larger brokerages such as Fidelity.
  • Some popular securities left off the table. While Ally offers a solid amount of securities to choose from as an investor, cryptocurrencies, and shorts aren’t offered through their brokerage.
  • Functional, not aesthetic interface. Ally Invest’s user interface gets a lot right; however, it’s not as attractive or visually appealing as other trading platforms like Webull or Robinhood.

Ally Invest vs. E*Trade and TD Ameritrade

Ally Invest is one of many online brokerages available to investors. Here’s how Ally’s brokerage accounts stack up against two major competitors: E*Trade and TD Ameritrade.
Minimum investmentOptions Trades feesMutual fund trade feeStocks trade feeVirtual Trading
Ally Invest$0$0.50$9.95$0No
E*Trade$0$0.65$19.99$0Yes
TD Ameritrade$0$0.65Lots of no-transaction-fee (NTF) funds$0Yes

E*Trade

While E*Trade is similar to Ally in that it has $0 commission trades for stocks and no minimum investment, the fees associated with some securities are more expensive than Ally Invest. That being said, if you want a virtual trading tool to practice investing, you won’t find that feature with Ally.

TD Ameritrade

Like E*Trade, TD Ameritrade offers virtual trading for new investors to practice their investing. However, except for trades with NTF mutual funds, you’ll likely be charged more in fees investing with TD Ameritrade than Ally if you’re doing more than stock and ETF trading.

FAQs

How are accounts funded?
Ally Invest offers four different ways to fund your brokerage account. You may fund your portfolio using ACH transfers from your bank, wire transfers, check, or a transfer from another brokerage.
Do I owe taxes on my sales through Ally?
Yes. You’ll receive a 1099 form from Ally for any miscellaneous income you obtain as a result of your Ally Invest account, whether that’s a dividend you receive, interest payments, or the sale of bonds, mutual funds, options, stock, or other securities.
How can money be transferred out of my account?
You can request a transfer from your account via ACH bank transfer which is usually completed in about five days. Ally will process your transfer via check for a $5 check fee and will wire the funds to another account for $30.

The bottom line

When it comes to choosing between online brokerages as an investor, there are a lot of different directions you may choose to take. If you want a more middle-of-the-road approach to create your account, Ally offers the best of both worlds. Whether you want to take an active role in managing your account yourself or take advantage of the estimates and predictions made by a robo advisor, Ally will serve you well. With plenty of data and an in-depth series of questions to help you clearly define your financial goals, you’re in good hands with an Ally account.
Many investors are likely to be attracted to Ally Invest because of its fee-free approach to most securities. However, you’ll be happy to stay with Ally when you experience their top-tier customer service and realize just how easy it is to diversify your portfolio with the swath of securities available on the trading platform. Plus, you can access your account on your smartphone or desktop, ensuring that you’re never unable to make an important financial move.
At the end of the day, every investment platform has its perks and drawbacks. Even so, Ally Invest covers its bases well, only showing its limitations in a few corner cases. If you aren’t an investor with super-specific needs, Ally will likely be a great choice to meet your investing needs.

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