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Ally Bank Review

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Ally BankIn mid-May, GMAC Bank changed its name to Ally Bank. With General Motors in the news every day for something negative, it’s hard to do business when everyone thinks you’re about to go out of business. The funny thing about it all is that GMAC Bank’s parent company, GMAC Financial, hasn’t been a part of General Motors for several years. When you have financial companies in distress and auto companies in distress, a bank that people think is inextricably linked to auto company is in some deep trouble.

So, they changed their name.

But are they a good bank to do business with? Let’s find out.

History Lesson on GMAC

If you are confused with all the acronyms and relationships between businesses, you aren’t a lone. I was very confused. GMAC stand for General Motors Acceptance Corporation and was once a wholly owned financial services arm of General Motors, the auto manufacturer. The financial services company provided financing to GM dealers, among other things. In 2006, General Motors sold a majority stake in GMAC to Cerberus Capital Management, thus providing some separation in the GM and GMAC relationship. Last year, GMAC was converted to a bank holding company to give them access to TARP funds.

GMAC Bank is a subsidiary of GMAC Financial Services, which offers a whole host of other financial products. This year, in May, GMAC Bank changed their name to Ally Bank.

Whew! Hopefully that all makes sense, but the end result is that Ally Bank/GMAC Bank is part of GMAC Financial Services, which is separate from General Motors itself and has been since 2006.

Rates are out of date. Compare today’s high yield savings account rates.

FDIC Insured

First things first, always confirm that the bank is FDIC insured. I would never bank at a non FDIC/NCUA insured financial institution and neither should you. Ally Bank is FDIC insured under FDIC certificate #57803 and have been since August 2004. The FDIC certificate still lists gmacbank.com as their primary internet web address but that will redirect you to the Ally Bank homepage. If you’re curious, their headquarters is at 6985 Union Park Center, Midvale, UT 84047.

Bankrate Safe & Sound rating: I don’t put a tremendous amount of credence in bank ratings because I believe FDIC insurance trumps everything, but they are valuable to read so you know what you’re getting into. Since the reports are quarterly, the most recent one is from December 2008, which is arguably a little dated. Back then, they still had a three star rating (out of five) and their predictive indicator was positive. You can read the memo for GMAC Bank here. I didn’t find a more recent report.

Online Savings Account

Let’s get to the reason why you and I care about Ally Bank in the first place, their deposit products. Ally Bank’s high interest rate on their high yield savings account is pretty good, enough to snag one of the top spots on my table of high yield savings account rates (Everbank is listed higher with an asterisk because they offer a promo rate for three months). The minimum to open is a comedic $0 (they will close your account if you don’t fund it, but I’d read that to say “no minimums”) and there are no monthly fees.

One thing I do like seeing is the explicit listing of a limit of six withdrawals or transfers per statement cycle. This limit is true on all savings accounts because there is a six transfer/withdrawal limit mandated by federal regulations. So many people, myself included, run into this problem with online accounts and it’s mostly out of ignorance. It’s nice to see them inform people about it.

No Penalty Certificate of Deposit

They’ve been heavily promoting the fact that they have no tricks, with no fees, no minimums, and all sorts of other anti-gimmick messages. It’s a great angle, especially during a time when banks are trying to earn as much revenue as possible, but a lot of other banks have very low minimums and don’t have any maintenance fees. In that respect, they’re not that much different. However, they do have one unique product – a no-penalty CD.

The no penalty CD lets you withdraw your money without paying a penalty, which is usually several months worth of interest. On CDs shorter than 12 months, the standard penalty is three months worth of interest. On CDs greater than 12 months, the standard penalty is six months worth of interest. For the no penalty CD, the penalty is in fact $0. The difference is in the interest rate.

In May 2009, they offered a 9-month No Penalty CD at 2.50% APY and a 9-month regular CD at 2.60% APY rate, a difference of 0.10% APY (the rates have since changed). That translates into $0.75 on ever $1,000 deposited over the 9 month period. Seventy five cents doesn’t look like a lot, but to be fair you need to compare it with the interest you would’ve earned at 2.60%. When you calculate the difference as a percentage of the total interest earned, it’s not a significant price to pay at 3.86%. You lose a little under percent to gain the flexibility to cancel, it doesn’t seem too bad and would be a fair price if you think interest rates are rising.

The only downside with the no penalty CD is that the only term they offer is 9 months.

Summary

It’s FDIC insured, they have great rates compared to their peers, and they seem to be in sound financial shape. I don’t have an account with them but I’ve heard good things about people who opened GMAC Bank accounts because of their great rates. I don’t see anything that would stop me from banking with them.

Do you have a GMAC Bank/Ally Bank account? What do you think of them?

{ 345 comments, please add your thoughts now! }

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345 Responses to “Ally Bank Review”

  1. E says:

    I find humor and sadness when I see someone educated beyond their intellignce.

  2. Anonymous says:

    is it easy to get a loan for a truck through them or does your credit have to be perfect

  3. Bill Todd says:

    Who owns GMAC notes publicly traded as Gma selling for about 22.00 and paying .46 per quarter dividends?

    Bill Todd

  4. Jaden says:

    Wow. I’ve been banking with Ally for over 2 years now and I LOVE MY BANK! For real, though… I have not had any problems with Ally whatsoever.

    I haven’t had to pay one red cent for my checking or savings account, or any ATM fees, and I even had an overdraft of $23 one time! Which led me to read up on their fees for overdrafts and learned that they would have only charged me $9 per day (not per overdraft) for having a negative balance. I brought my account current the same day, and didn’t get charged anything.

    I came to Ally from Suntrust because I was informed that Suntrust was going to start charging me $7/mo for my “free” checking account AND $.50 everytime I used my PIN number to buy things with my card!! I don’t think it’s fair to have to pay a bank for holding my money. It would be different if I had borrowed money and was getting charged for interest, but just to hold money that I have worked for? I don’t think so.

    I have recommended Ally to all of my friends!!

    • x says:

      Wow, someone that actually knows the advantages of banking with Ally. Current employee of a service cetner for Ally. To all of the people that complained about Auto on this page, D is right, sorry, seperate company, complain somewhere else about them, that is NOT this company. However D does have one good point, customer service is very much underpayed. If Ally wants its service to be the best they really need to keep the good ones and pay them more than keep cycleing in new people. Anyone with a real brain doing service for Ally gets out as soon as possible unless they just LIKE being poor and underpayed. An employee could calm an upset customer and keep that person from taking out all their money, even have them add a million more, and not see one cent in recognition from Ally. Not even a $1.00 an hour raise after a year of honest work with absolutley no tardies or abscences. This is the truth. It is sameful and degrading. However, D should’ve been fired for surfing the web at a workstation used to handle customer accounts, that was just plain silly. People get fired all the time in the modern age for unauthorized use of workstations.

      Ally bank is a good bank, they just need to retain the good employees, pay them enough to atually survive. Then you will truly see Ally’s custoemr service be as stellar as they claim it to be.

  5. Koty says:

    I personally found good customer service through the online chat. They were both informational and easy to understand. I would like to know if Ally bank is safe, legite, and whether it scams you or not

  6. Cyrene says:

    I have had a Money Market Account as well as CD’s with GMAC Bank, now Ally Bank, for the past ten+ years. I would rate them excellant in Customer Service.

    All my Money Market and CD’s accounts are mainly at Ally Bank and Pentagon Federal Credit Union. I am fully satisfied with Ally Bank representatives. They have always been professional and a pleasure to deal with over the phone. Without exception, Ally Bank posts all interest the same day each month and mail all interest checks on time.

    I am especially pleased with Ally’s 24-hour telephone Customer Service availability.

  7. Head says:

    I believe “D” is hoping some head honcho from Ally might come across these reviews and read his heroic defense of Ally Bank. Then, Ally will come to the rescue and scoop up “D” and take him to Never Never land. Where “D” will be Ally’s leading commander in chief instead of some bum trolling around in cyberspace.

  8. Dave says:

    I’ve used Ally for several years and keep a CD ladder with them. Sure, the rates keep coming down, but that’s true everywhere. I also like that they have a loyalty bonus that adds .25 to the interest rate when you renew a CD. The website isn’t the greatest, but for an online savings account, I don’t need to do that much.

    Their customer service is the best. The website tells you how long the phone wait is, and you can press 0 immediately to skip the automated system and go right to a person. I plan to keep using them as long as their rates are competitive.

  9. Jackson says:

    Consider that Ally is 74% owned by the United States Treasury. Maybe that matters to you, maybe not.

  10. trent says:

    For what it’s worth. I know someone the gets paid a lot of money to do consulting work for banks, and he recommended Ally as a friend, this is after working with a variety of different banks.

    To summarize:

    Loans are a different company; don’t complain about them here.

    You can deposit checks with a SCANNER. No cash deposits. Online ONLY.

    If you are young, can work a computer, and don’t get frustrated talking to support online, then maybe Ally is for you.

    If you are older or prefer face to face service, or a friendly phone conversation and a place to deposit real cash, then Ally isn’t for you.

    Please read this, before you post another dumb anecdote that could have been solved by reading a fraction of the comments above. Regards.

    Trent – not affiliated with Ally, came to this page to see what others thought.

  11. MBinWV says:

    I’ve been an Ally customer for approximately 4 months.

    During that period, my place of employment has attempted to direct deposit my paychecks into Ally, but the deposits were rejected. I then tried to e-check deposit my paychecks….which Ally held for 12 days EACH time before depositing. In the mean time, I had checked and double checked and triple checked that the account information that was being used was correct. Each time I called Ally I was subjected to yammerings about account numbers that I’ve confirmed and hold times I find excessive, given the fact that it’s a salary check for the same amount every two weeks. But, I figured it would all be fine when the direct deposit issue was fixed.

    After five attempts, my accounting department said “Good news, your deposit has been accepted!” and I was so happy. But on deposit day, my money wasn’t in my account. My pay stub said “This is not a check” and Ally said “We don’t know where your money is…but it may take us 24 to 48 (business) hours to research it” On a Friday that means I won’t hear from Ally until Tuesday, and if they DO find it, I’m sure they’ll come up with a reason to hold it for another 12 days.

    The worst part…while speaking with a customer service supervisor (almost as useless as a customer service representative, but with a more authoritative sounding title) she indicated that there was no way to further expedite my resolution, as it was a newly opened issue. WTF? I’ve been calling over and over for months about the same issue. Maybe it’s a bit different than the last eight calls, but it still boils down to the same. little. nugget. My direct deposit isn’t being deposited and Ally won’t give me my money.

    The fee-less accounts, the interest, the convenience, the friendly customer service, the e-check deposit…it all sounds fantastic, but BEWARE. You’ll continuously call with the same issues. You’ll wait weeks for access to your own money and there is no direct line to the resolution center…leaving you at the mercy of friendly, but relatively helpless customer service reps (and supervisors).

    I’ll be posting this review on every available site for each waking hour that my funds remain missing in some Ally limbo. At the earliest availability I’ll be removing my money and marching it straight toward the teller of a better bank…if there is such a thing.

    Wish me luck.


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