*This post may contain affiliate links, please see my disclosure
Whether you are looking for an investment app with a strong reputation, want to streamline your finances, or both, Ally Invest might be the perfect investing app for you. After building legions of fans with its saving and checking accounts, Ally added Ally Invest to their offerings. That means that you can keep all of your money under one roof to dramatically simplify your finances.
Read on to find out more about the standout features of Ally Invest to see if this investing app is right for you.
Ally Invest Review Summary
- Ally Invest is a discount brokerage allowing investors to invest in low-fee stocks, mutual funds, ETFs, and options with self-directed trading or through robo portfolios
- Ally Invest has zero commission fees and zero account minimums
- Ally Invest also offers an attractive low options fee of $0.50 per contract
- Ally Invest offers frequent bonus offers after signing up and funding an account
- Ally Invest provides 24/7 phone and chat support for all customers
Ally Invest Pros & Cons
Ally Invest is quickly becoming one of the most popular investing platforms. Before you open an account, you want to consider the pros and cons. The pros, like their low fees and compatibility with other Ally accounts, make it an obvious choice for new investors or current Ally customers. The cons, like no access to cryptocurrency and high fees for penny stocks, might make certain investors think twice.
Pros
- No commissions on stocks, ETFs, options
- Offers several research tools
- Intuitive app that seamlessly integrates with other Ally accounts
- Includes forex trading
- Promotional offering to open and fund new account
- Offers a variety of robo portfolio types, including socially responsible investing
Cons
- No access to trading cryptocurrency
- Requires sizeable account ($2 million+) to snag full promotional offering
- Some (low) account fees including transfer fees and IRA closing fees
- Higher commissions than other brokers for penny stocks
- Mutual funds come with transaction fees
- There are no in-person branch locations
How Does Ally Invest Work?
Ally Invest is a discount brokerage with a mobile app component. They allow both self-directed trading and automated investing.
Ally Invest works like many other brokerages. You decide the type of investing you’d like to do–DIY or robo–and the type of investment account you want. After you’ve made those choices, you complete an application. Once the application is processed, you are ready to get started with investing.
One important thing to note in terms of how Ally Invest works is that it includes seamless transfers between Ally Invest and Ally Bank. That means if you already have an Ally checking or savings account, you can move money effortlessly between your bank and investing accounts.
How Do I Open an Ally Invest Account?
The first thing you need to do is decide if you want to open a self-directed trading account or an automated investing account.
After you’ve made that decision, follow these simple steps to get started right away!
Opening a DIY Account
If you’re ready to get your DIY on, a self-directed trading account is right for you.
- Step 1: Go to the Self Directed Trading page on the Ally Invest site.
- Step 2: Click the Start Trading button.
- Step 3: Fill out your personal information on the application.
- Step 4: Indicate the account type you would like and how you prefer to fund it.
- Step 5: Wait for an email indicating your account has been approved.
Opening a Robo Portfolio
Are you ready to take the time and energy out of investing? Then automated investing is right for you!
- Step 1: Go to the Robo Portfolios page on the Ally Invest site.
- Step 2: Choose the Create My Plan option to receive a personalized portfolio recommendation based on your investing specifics.
- Step 3: After you receive and review your recommendation, click the Open an Account option.
- Step 4: Fill out your personal information in the account application.
- Step 5: Note the type of account you want to open and how you plan to fund it.
- Step 6: Wait for an email saying you’ve been approved.
Types of Accounts Supported
Ally Invest offers a ton of different investment options. Investors can save for retirement with traditional, Roth, or Rollover IRAs. Ally Invest also offers Coverdell accounts. Plus, you can also open individual, joint, or custodial taxable accounts.
How do you fund your retirement and other investing goals? You can fund your Ally Invest account in four ways:
- Using an ACH transfer from a bank
- Requesting a wire transfer
- Transferring funds from another broker
- Sending Ally a check
You might also want to note how Ally processes transfers. Ally uses the Automated Clearing House (ACH) to process transfers between banks. If you make a transfer between an Ally Bank checking or savings account and your Ally Invest account, the transfer can happen in as little as 1-2 minutes during market hours.
Ally Invest Features and Benefits
Ally Invest is comparatively new to some of the other discount brokerages you might already be familiar with. But the various features and benefits of Ally Invest certainly help explain why it’s becoming a fast favorite.
Let’s take a closer look at some of the standout aspects of Ally Invest:
Self-Directed Trading
Ally Invest prides itself on being the go-to option for DIY investors. To make themselves an attractive brokerage option for people who want to get hands-on with their investments, Ally Invest offers robust research and market analysis tools. They also offer low fee investment choices, including competitive options contract fees for only $0.50 per contract.
They also offer a variety of investment choices:
- Stocks *
- ETFs*
- Options *
- Bonds
- Mutual Funds
- Margin accounts
* It is also worth noting that stocks, ETFs, and options are all commission free.
Robo Portfolios
For as little as $100, you can work with Ally Invest to create a robo portfolio. A robo portfolio includes a portfolio tailored to your investing goals, as well as your timeline and risk tolerance. There are no annual charges or advisory fees even though the portfolio is professionally created. Portfolios are made up of diversified ETFs.
There are also several new portfolio options based on your values and priorities. Options include:
- Core – Diversified across asset classes and based on risk tolerance
- Income – A conservative option that generates dividends as an income
- Tax Optimized – Helps people who make after-tax investments
- Socially Responsible – Support companies that align with your values, including sustainability and energy efficiency, through socially responsible investing (SRI)
Socially Responsible Investing
Socially Responsible Investing (SRI) is becoming more popular, but it can be hard to navigate on your own. That’s where Ally Invest comes in. If investing ethically matters to you, Ally Invest has already done their homework. You can opt into SRI and choose from one of their SRI portfolio options that focuses on sustainability, energy efficiency, or other categories. Then, you can be confident that the companies you back with your money also align with your values.
Margin Accounts
Another feature of Ally Invest is the ability to open a margin account. With a margin account, you are able to borrow from your own portfolio to make other investments. Once you have an Ally Invest account, you can change the settings to “Add Margin” if you want to get started with margin investing. When you are ready to buy on margin, you borrow the money from your own portfolio and put it toward the securities you want to purchase. Think of it as a loan to yourself from yourself. Of course, since it is a loan, you’ll also owe some interest.
To help you see if a margin account is right for you, Ally Invest offers a ton of information and several different scenarios to help you see the reward as well as the risk. It’s worth noting that if stock prices take enough of a dip, you could lose your whole investment and then some. That’s why educating yourself first is something Ally Invest supports.
Forex
Forex trading is another standout feature of Ally Invest. Forex is actually the most traded market in the world. So if you are interested in trading currencies on the Foreign Exchange Market (Forex), Ally can help. Use their Forex trading service to trade 50 currency pairs like gold and silver five days a week around the clock.
Ally Invest also gives you the option to open a practice account if Forex is appealing to you but you aren’t ready to take the plunge just yet.
Automatic Rebalancing
Are you worried that your investments might veer off course? It happens as the market ebbs and flows. Rebalancing can realign your investments with your risk tolerance and goals. Thanks to Ally Invest, your portfolio is automatically rebalanced, saving you time and money.
Cash Buffer
Another benefit of an Ally Invest robo portfolio is that 30% of your portfolio can be set aside as a buffer. This particular option is called the Cash-Enhanced Robo Portfolio. In the portfolio, the interest-earning cash buffer functions like a high interest savings account and doesn’t come with any advisory or management fees. That way, your investment is more protected in the event of a market downturn. Of course, not every investor needs or wants this option. But for people with a shorter time horizon or lower risk tolerance, this cash buffer from Ally Invest might be worth exploring.
Transfers Between Accounts
Another perk of using Ally Invest is how quickly you can transfer money between accounts. Investors can move up to $250,000 a day to your Ally Invest account from an Ally Bank account. These transfers are completed in just a few minutes during market hours. That means you won’t ever miss a beat!
Ally Invest Investment Options
Ally Invest offers a solid variety of investment options. You can be a self-directed investor or automate your investing. You can also save for retirement or focus on other goals. The flexibility and diversity of options makes Ally Invest attractive to new and seasoned investors.
Active or Automatic Investing
Investors can decide if they want full control of their investment or would prefer a “set it and forget it” approach.
Active investors can choose to invest in any combination of stocks, options, ETFs, mutual funds, and bonds. They also have the option of using margin accounts and trading on the Foreign Exchange Market (Forex).
Ally Invest also offers automatic investing with their different robo portfolio options. The portfolios are made up of low-fee ETFs and align with your investing goals, timeframe, and risk level. Plus, you can even create a portfolio that reflects socially responsible investing.
Retirement Options
Ally Invest gives you a variety of retirement investing options.
Investors can choose from:
- Traditional IRAs
- Roth IRAs
- Rollover IRAs
There are no annual fees or monthly maintenance fees when it comes to investing in an Ally Invest IRA. Ally Invest does charge several small fees on some aspects of an IRA, such as closing your account, but the fees are low–think $25!–and clearly described online.
Ally Invest Fees
It’s important to keep an eye on fees when it comes to investing. High fee investments can chip away at your progress. That’s a big reason why Ally Invest is so appealing–they are a discount brokerage focused on offering some of the lowest fees around.
Ally Invest offers commission free trades on many stocks and stock options. Many of their ETFs are also commission free, including some of their socially responsible investing options.
Ally Invest also includes a page dedicated to commissions and fees on their website. That way, investors aren’t left guessing or faced with surprises.
Ally Invest FAQ
Are you wondering if Ally Invest is the right choice for you? We put in the work to research the most commonly asked Ally Invest questions. Read through our Ally Invest FAQ to see how Ally Invest keeps your money safe, why beginners love it, and how much money you need to open an account.
Is Ally Invest Safe?
Of course, investments all carry some level of risk. It’s important to note that your investment account is not insured like a FDIC-protected savings account. However, Ally Invest is safe. Absolutely!
Ally Invest is a member of the Securities Investor Protection Corporation, also known as SIPC. That means that if Ally Invest were to fail, your funds are protected. This does not, however, protect you from dips in the stock market itself.
Ally also uses the latest encryption technology and encourages customers to set up two-factor authentication as an added security measure to keep you safe. You will also be automatically logged out after a period of time to protect your account. Ally also engages in account monitoring to check for fraud and other issues.
Is Ally Invest Good for Beginners?
Yes! Ally Invest is good for beginners for many reasons. Two of the biggest reasons why new investors flock to Ally Invest are because of their robo portfolios and customer support.
The robo portfolio options take the guesswork out of investing. Ally invest works with investors to tailor a portfolio that meets you where you are in terms of goals, timeline, and risk.
If you have questions as a new investor, they have answers. Their customer support is available around the clock by phone. Plus, you can chat or email as well. Ally Invest also offers a robust FAQ section online and integrates research and analysis tools into their platform to help you learn along the way.
How Much Do I Need To Invest With Ally Invest?
Ally Invest does not have an account minimum to get started. If you would like to use one of their robo portfolios, however, you need $100 to invest with Ally Invest.
Bottom Line: Is Ally Invest Worth It?
Ally Invest is definitely worth it for new investors and current Ally customers. New investors can feel confident in their low fees and commitment to transparency online. Plus, Ally Invest offers new investors support through their robo portfolio options, as well as their comprehensive customer support.
Current Ally customers with checking or savings accounts should also give serious consideration to Ally Invest. Their seamless transfers move a significant amount of money between accounts effortlessly. It takes all the timing and guesswork out of investing transactions.
Investors who want access to margin accounts and Forex will find that with Ally. Additionally, as socially responsible investing becomes more popular, investors with SRI in mind should be satisfied with Ally Invest’s offerings.
However, investors who are focused on cryptocurrency will want to choose a different brokerage.
Ally Invest Alternatives
Ally Invest is definitely versatile and reputable, but it doesn’t do everything. In case you’re not convinced that Ally is for you, explore all of our favorite investing apps for 2021.
You might also want to check out these Ally Invest alternatives:
SoFi Invest
SoFi Invest is pretty similar to Ally Invest. If you already use SoFi for other banking or loans, then you might explore their investment app as well.
Additionally, one of the fairly substantial weaknesses to the Ally Invest platform is the lack of cryptocurrency. SoFi Invest currently allows investors to trade nearly 30 different coins through the app. If you are interested in Bitcoin, Dogecoin, Ethereum, and more, you will want to explore all SoFi Invest offers.
See our full SoFI Invest review here.
Acorns
While we do think Ally Invest is perfect for beginners, there is definitely another strong option to consider as a newbie investor. Acorns strives to make investing as painless as possible. One of our favorite features is the Round Up tool. You can link a particular credit or debit card to your Acorns account. Then, when you make a purchase, Acorns rounds up to the next dollar and invests your spare change.
Acorns also offers more traditional investment accounts as well.
See our full Acorns review here.
Vanguard
In a lot of ways, Vanguard is the OG of investing. Their founder Jack Bogel actually created the low-cost index fund. So one reason why Vanguard is a strong alternative to Ally Invest is because of its long track record and reputation.
In truth, Vanguard, Ally Invest, and other discount brokerages all function similarly. One way that Vanguard continues to stand out, though, is because Vanguard is investor owned. That means that fund shareholders (that’s you!) drive their decision making. Perhaps this unique structure is one reason why Bogleheads are so loyal to Vanguard.
See our full Vanguard review here.
