Earlier today, I wrote about the American Express high-yield savings account. That account certainly does have its perks – and no, you don’t have to be an American Express cardholder to apply. It also features no minimum balance and no maintenance fees. It’s great at everything. However, it doesn’t have the greatest interest rate out there. There are 3 national banks which offer you more money. Since I teased Ally Bank in the last article, I knew I needed to do a follow-up. I can’t just tease like that and offer no content!
Ally offers .99% APY. Interest is compounded daily with Ally. This means more money in your account, faster. Graph below courtesy of WalletHub:
Ally has claimed awards from Pew Charitable Trusts, GOBankingRates, Kiplinger’s, Money, NerdWallet, and many others. View the awards page here.
But this article isn’t meant to praise Ally. No, if there are shortcomings to be named, they shall be named. This is an unbiased article. Let’s get started digging:
Fees and Other Annoyances
I’ve been using an Ally savings account for five years. I’ve encountered no surprises. Ally Bank does not charge account maintenance fees and no minimum balance is required to open. You also don’t need to keep a balance to retain the account.
You only get 6 withdraws per cycle. Beyond that, your account is charged $10 for each transaction. But remember, this is a savings account. Who makes more than 6 withdraws per month on a savings account?
Ally customer service is available online or over the phone. I’ve used both. The Ally site gives approximate wait times but I’ve always gotten through faster than it says. Although customer service is good, keep in mind that this is an online institution. Rarely do you have to talk to an actual human being. Customer service shouldn’t be a huge concern.
Ease of Application
There are 3 ways to apply: online, phone, or via a mail-in form. Applying online takes just a few minutes. You can fund your account many different ways as well. You can do an online funds transfer. It days 3 days until the funds are in your account. You can also do an Ally eCheck Deposit via a mobile device. Your third option is to do a wire transfer like we’re living in the wild west. Or you can mail in your deposit if you enjoy the anticipation. Although remember, no money has to be deposited when the account is open. If, for some reason, you decide not to fund the account, you can either close it or leave it sit for free.
What Your Savings Will Look like with a .99% Interest Rate
Let’s say you keep a balance of $25,000 in your savings account. Ally (.99% APY) with net you $247 in interest each year. American Express (.90% APY would earn $225. A difference of $22 per year. But if you keep the account for 10 years, that’s $220 you’d be giving up by not choosing Ally. Something to consider.
Cool Bonus for Banking with Ally
A lot of people like to set savings goals. This is a great psychological move. However, these goals usually requires a person to have multiple savings accounts. That’s a lot of hassle. To help people save, Ally offers the ability to easily open multiple accounts to keep the goals separate. You can give the accounts names like “Hawaii trip” or “New car fund”. You can setup recurring transfers from one account to another to keep up with your goals. You can also manage all accounts via one simple-to-use online interface. It’s pretty cool, I think.
If your goal is to get the highest interest rate possible, Ally is your bank. You can Apply via their site. If you’re still not quite convinced, you can read through the 200+ Ally reviews found here.
*There are banks out there that offer better than .99% interest. See this list. However, those banks come with many inconveniences. Residency restrictions, minimum balances, exorbitant fees apply.