Navigating the world of online investing can seem daunting, especially with numerous platforms vying for your attention. Finding a broker that balances low costs, useful features, and a user-friendly experience is key for both new and seasoned investors.
Ally Invest, the investment arm of the well-known Ally Bank, has emerged as a popular choice, particularly for those seeking commission-free trading and seamless integration with their banking needs. This guide will delve into everything you need to know about Ally Invest, covering its fees, features, account types, and the steps to get started.
What is Ally Invest?
Ally Invest is an online brokerage platform owned by Ally Financial Inc., the parent company of Ally Bank. Originally established after Ally acquired TradeKing in 2016, it was rebranded as Ally Invest. This integration allows customers to manage their banking and investing activities under one digital roof, offering a convenient financial hub.
The platform caters to a broad range of investors, from beginners looking for simple, low-cost trading to more experienced individuals seeking specific tools and options. Its core appeal lies in offering commission-free trades for U.S.-listed stocks, exchange-traded funds (ETFs), and options, aligning it with many modern discount brokers.
Ally Invest Account Types
Ally Invest offers two primary ways to invest, catering to different preferences and levels of involvement:
Self-Directed Trading
This is the traditional brokerage account where you make your own investment decisions. You choose which stocks, ETFs, options, bonds, or mutual funds to buy and sell. This account type is ideal for hands-on investors who prefer researching and managing their own portfolios.
- Investment Choices: Stocks, ETFs, options, bonds, mutual funds.
- Control: Full control over investment selection and timing.
- Pricing: $0 commission on eligible U.S. stock, ETF, and options trades (a per-contract fee applies to options).
- Minimum Deposit: $0
Robo Portfolios (Formerly Ally Invest Managed Portfolios)
For those who prefer a hands-off approach, Ally Invest Robo Portfolios offer automated investment management. After you answer a questionnaire about your financial goals, risk tolerance, and time horizon, Ally Invest builds and manages a diversified portfolio for you, primarily using low-cost ETFs.
- How it Works: Automated portfolio construction and rebalancing based on your profile.
- Investment Choices: Diversified portfolios of ETFs across various asset classes.
- Control: Minimal ongoing management required from the investor.
- Pricing: An advisory fee applies, although there’s a fee-free option if you maintain a significant portion (around 30%) of your portfolio in cash (Cash-Enhanced Portfolio). A market-focused option with lower cash allocation has a competitive annual advisory fee.
- Minimum Deposit: $100
Key Features of Ally Invest
Ally Invest offers a compelling set of features designed to appeal to a wide audience:
Commission-Free Trading
Perhaps the most significant draw, Ally Invest charges $0 commission for online trades of U.S.-listed stocks, ETFs, and options. This makes it highly competitive, especially for active traders or those starting with smaller amounts.
Wide Range of Investment Products
Beyond stocks and ETFs, Ally Invest provides access to options trading, bonds (corporate, municipal, government), and thousands of mutual funds, offering flexibility for portfolio diversification.
No Account Minimums (Self-Directed)
The Self-Directed Trading account has no minimum deposit requirement, making it accessible for investors starting with any amount of capital.
User-Friendly Platform
Ally Invest offers both a web-based platform and a mobile app. Both are generally considered intuitive and easy to navigate, suitable for beginners while still offering essential tools like watchlists, charting, and real-time quotes for active traders.
Research & Educational Tools
The platform provides access to market news, analyst ratings, stock screeners, charting tools, and educational resources to help investors make informed decisions. While perhaps not as extensive as some top-tier research platforms, it covers the essentials well.
Integration with Ally Bank
A major advantage for existing Ally Bank customers is the seamless integration. You can easily view and transfer funds between your Ally banking and investment accounts, creating a unified financial picture.
Customer Support
Ally Invest offers customer support via phone, email, and chat, generally available 24/7, which is a plus compared to some competitors with more limited hours.
Understanding Ally Invest Fees and Costs
While Ally Invest promotes commission-free trading, it’s essential to understand the full fee structure.
Here’s a breakdown of common costs associated with Ally Invest:
| Fee Type | Cost (Self-Directed Trading) | Cost (Robo Portfolios) | Notes |
|---|---|---|---|
| Stock & ETF Trades (U.S. Listed) | $0 | N/A (Included in Advisory Fee) | Applies to online trades. |
| Options Trades | $0 commission + $0.50 per contract | N/A | The $0.50 per-contract fee is standard across many brokers. |
| Mutual Funds (No-Load) | $0 for No-Transaction-Fee (NTF) funds; $9.95 for others | N/A | Check the fund’s prospectus for details. |
| Robo Portfolio Advisory Fee | N/A | Fee-free for Cash-Enhanced (approx. 30% cash); 0.30% annually for Market-Focused | Underlying ETF expense ratios also apply. |
| Account Transfer Out (ACAT) | $50 | $50 | Fee to transfer your assets to another brokerage. |
| Wire Transfers (Outgoing) | $30 (Domestic & International) | $30 (Domestic & International) | Incoming wires are typically free. |
| Paper Statements | $2 per statement (can opt for free e-statements) | $2 per statement (can opt for free e-statements) | Electronic statements are recommended. |
Key Takeaways on Fees:
- The $0 commission on stocks, ETFs, and options is a major cost saving.
- Options traders still pay a competitive $0.50 per contract.
- Robo Portfolio fees depend on the cash allocation choice; the 0.30% annual fee for the market-focused option is competitive within the robo-advisor space. Remember that the ETFs held within the portfolio also have their own expense ratios.
- Be mindful of potential miscellaneous fees like outgoing transfers or paper statements.
How to Open an Ally Invest Account: Step-by-Step
Opening an Ally Invest account is a straightforward online process. Here’s what you need to know:
Eligibility Requirements
- Be a U.S. citizen or legal permanent resident.
- Be at least 18 years old.
- Have a valid Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
- Have a legal U.S. residential address.
Information Needed
Prepare to provide the following information during the application:
- Full Name, Date of Birth, Residential Address
- Social Security Number (SSN) or ITIN
- Employment Status and Employer Information (if applicable)
- Basic Financial Information (annual income, net worth)
- Investment Objectives and Experience
- Bank Account Information (for funding)
The Application Process
- Visit the Ally Invest Website: Navigate to the Ally website and find the “Invest” section.
- Choose Account Type: Select whether you want a Self-Directed Trading account or a Robo Portfolio account. You’ll also choose the account registration type (e.g., individual, joint, IRA).
- Complete the Online Application: Fill out the application form with the required personal, financial, and employment details. This typically takes 10-15 minutes.
- Review and Submit: Carefully review all the information you’ve entered for accuracy. Agree to the terms and conditions and submit the application.
- Identity Verification: Ally may verify your identity electronically. In some cases, you might need to upload identification documents.
- Fund Your Account: Once your account is approved (which can often happen quickly), you can fund it.
Funding Your Account
Ally offers several ways to add money to your new investment account:
- Electronic Funds Transfer (ACH): Link your bank account (Ally Bank or external) for easy transfers. This is often the most convenient method.
- Wire Transfer: Send funds via wire from another financial institution (check for fees from the sending bank).
- Check Deposit: Mail a check payable to Ally Invest.
- Account Transfer (ACAT): Transfer assets directly from another brokerage account.
Funding times vary depending on the method chosen, with ACH transfers typically taking a few business days to settle before you can trade with the funds.
Ally Invest Pros and Cons
Like any brokerage, Ally Invest has its strengths and weaknesses:
Pros
- $0 Commissions: No commissions on online U.S. stock, ETF, and options trades.
- No Account Minimum (Self-Directed): Highly accessible for beginners or those starting small.
- Seamless Ally Bank Integration: Convenient for existing Ally Bank customers to manage finances in one place.
- User-Friendly Platform: Intuitive web and mobile interfaces suitable for various experience levels.
- Robo Portfolio Option: Offers automated investing for those who prefer a hands-off approach.
- Good Range of Products: Access to stocks, ETFs, options, bonds, and mutual funds.
- 24/7 Customer Support: Extensive support availability via multiple channels.
Cons
- Options Contract Fee: While commission-free, the $0.50 per-contract fee applies.
- Mutual Fund Fees: Fees apply for trading mutual funds not on the NTF list.
- Robo Portfolio Fees: The market-focused Robo Portfolio has an advisory fee (though competitive), and the fee-free option requires a significant cash holding.
- Research Tools: While adequate for many, advanced traders might find the research tools less robust compared to specialized platforms like thinkorswim.
- Limited International Trading: Primarily focused on U.S. markets.
- Payment for Order Flow (PFOF): Like many $0 commission brokers, Ally Invest receives payment for routing orders to market makers. You can learn more about PFOF from the SEC.
Is Ally Invest Right for You?
Ally Invest is an excellent choice for several types of investors:
- Beginners: The $0 minimum, $0 commissions, and user-friendly platform make it easy to get started.
- Cost-Conscious Investors: The commission-free structure for common trades is a significant benefit.
- Ally Bank Customers: The seamless integration offers unmatched convenience for managing banking and investing together.
- Hands-Off Investors: The Robo Portfolio option provides a low-cost, automated investment solution.
- Mobile Users: The well-regarded mobile app allows for investing on the go.
However, it might be less ideal for:
- Highly Active Options Traders: While commissions are $0, the per-contract fee can add up with high volume.
- Advanced Traders Needing Top-Tier Tools: Investors requiring sophisticated charting, screening, and research might prefer a more specialized platform.
- Frequent Mutual Fund Traders: Those focusing heavily on mutual funds not on the NTF list might incur transaction fees. Find comprehensive information on mutual funds via FINRA.
Conclusion
Ally Invest stands out as a strong contender in the online brokerage space, particularly due to its $0 commission structure for stocks, ETFs, and options, coupled with the lack of an account minimum for self-directed trading. Its integration with Ally Bank is a significant advantage for existing customers, streamlining financial management.
Whether you’re a new investor drawn by the accessibility and ease of use, or an experienced one looking for low-cost trading and a solid platform, Ally Invest offers a compelling package. The availability of both self-directed trading and Robo Portfolios provides flexibility to match different investing styles and preferences. Carefully consider the fee structure, especially for options and mutual funds, and evaluate the platform’s features against your specific needs before opening an account. For official details and to begin the process, consult the comprehensive Ally Invest Investments Guide on their official website.
