If you’re familiar at all with the wide world of online banking, you’ve surely heard of Philadelphia-based Ally Bank. It’s one of the oldest and best-regarded online-only banks, renowned for above-average yields, low fees, and virtually nonexistent account opening minimums.

It’s less likely that you’re familiar with Ally Invest, Ally Bank’s much newer online brokerage. Ally Invest is heir to TradeKing, an old-school discount brokerage purchased and rebranded by Ally Bank in 2016. If you’re in the market for a new brokerage or less than thrilled with your current investing experience, Ally Invest is definitely worth a closer look.

Key Features

Account Opening Bonus Offers

Ally Invest’s account opening bonus offers aren’t on par with the online brokerage sector’s leading new account bonuses, which routinely exceed $600 in bonus cash or free trade value. But it does stand up to leading online bank bonus offers, including from Ally Bank itself.

Ally Invest actually has two account opening bonus offers:

• Cash Bonus: $200 in bonus cash when you open an account with at least $25,000 in new money
• Commission-Free Trades: 90 days of commission-free trading (limit $500 in total free trade value) when you open an account with at least $10,000 in new money

The offers are mutually exclusive – you can only choose one or the other. Both offers require full funding at or in excess of the minimum deposit within 15 days of account opening. The bonus is eligible for withdrawal 120 days after receipt.

Account Opening Transfer Credit

Separately from the account opening bonuses, new Ally Invest customers can qualify for up to $150 in transfer fee credits when they transfer existing accounts (including cash and securities) from another brokerage. The minimum account size balance to qualify for a fee credit is $2,500.

Available Investment Products and Self-Directed Trading Commissions

Ally Invest’s self-directed trading platform has a pretty broad array of available investment products:

• Stocks: You can buy and sell exchange-listed stocks and certain over-the-counter stocks with Ally Invest. The standard stock commission is $4.95 per buy and sell trade. There’s a $0.01 per share surcharge on penny stock trades.
• Bonds: You can buy and sell dozens of corporate and government bonds with Ally Invest. The standard bond trading commission is $1 per bond, minimum $10 per trade. Certain bonds have purchase minimums that may exceed this threshold, so be sure to read all pertinent fine print before placing a buy order.
• ETFs: ETFs, or exchange-traded funds, look like mutual funds and trade like stocks. Like mutual funds, they’re strategically assembled baskets of equities and other financial instruments designed to achieve specific outcomes, such as mirroring the performance of an underlying index. Like mutual funds, ETFs have management fees and other expenses expressed cumulatively in each instrument’s expense ratio. Most index ETFs have low expense ratios, as little as 0.05% or 0.10% per year. Notably, Ally Invest doesn’t have transaction-fee-free ETFs, which are increasingly common elsewhere. The standard ETF commission here is $4.95 per trade.
• Mutual Funds: Like ETFs, mutual funds are baskets of securities built to specific ends. Every mutual fund has an expense ratio, but funds built for passive investors (including index funds) generally have low ratios. Ally Invest has more than 12,000 load (fund fees charged on the front or back end separately from platform commissions and ongoing expenses) and no-load mutual funds. Ally Invest doesn’t have transaction-fee-free no-load mutual funds – the standard no-load fund commission here is $9.95.
• Options: Options are derivative instruments that confer the right to buy or sell an underlying asset by a set future date (expiration). There are several different types of options, each with their own rules and advantages, so you’ll want to peruse Ally Invest’s help resources if you’re not familiar. Options trades cost $4.95 base plus $0.65 per contract.

Bulk Pricing for High-Volume and High-Balance Customers

Ally Invest customers who meet certain qualifications are eligible for special pricing on equities trades. Ally refers to this special pricing scheme interchangeably as “bulk pricing,” “high-volume pricing,” “high-balance pricing,” “volume/balance pricing,” or “special pricing.”

These special lower rates are:

• $3.95 per stock and ETF trade
• $3.95 base rate plus $0.50 per contract for options trades
• $1 per bond trade ($10 minimum)

To qualify for these rates, you need to do one of two things:

• Make at least 30 qualifying trades per quarter
• Maintain an average daily balance of at least $100,000

You need to meet one or both of these criteria for the entire preceding quarter. For instance, to qualify for special pricing during the second quarter, you need to make at least 30 qualifying trades in the first quarter.

Traditional Brokerage Accounts

You can buy and sell any of Ally Invest’s mainline products in a traditional brokerage account. Eligible products include stocks, bonds, mutual funds, ETFs, and options. There’s no minimum deposit to open a traditional brokerage account.

Ally Invest’s traditional brokerage accounts can be held by a single individual, jointly by a legal couple, or in a custodial arrangement between a parent or guardian and minor child (custodial account). Traditional brokerage accounts are not tax-advantaged.

Tax-Advantaged Accounts

You can buy and sell any mainline investment product in a tax-advantaged account:

• Traditional IRA: You can contribute pretax dollars to your traditional IRA, up to 100% of compensation or $5,500 per year ($6,500 for those age 50 and older). Depending on your income, filing status, and other factors, your contributions may be tax-deductible.
• Roth IRA: You can contribute after-tax dollars to your Roth IRA, subject to the same limits as traditional IRAs. Roth IRA contributions aren’t tax-deductible. After age 59.5, you can generally take tax-free distributions on contributions held in the account for at least five years. If your income exceeds certain limits that vary with filing status, you can’t make Roth contributions.
• Rollover IRA: You can transfer assets held in a qualifying corporate retirement plan (such as a 401(k)) to a rollover IRA account held in your name. Rollover IRAs are designated as traditional IRA accounts, with the same contribution and distribution limits as traditional IRAs.
• SEP IRA: SEP IRAs are small business pension accounts designed for companies with fewer than 25 employees. Employees make before-tax contributions, subject to IRS-imposed contribution limits and restrictions, and pay taxes on distributions at their then-current tax rate. Employers can make tax-deductible contributions, subject to IRS restrictions.
• SIMPLE IRA: SIMPLE IRAs are salary reduction plans for employers with fewer than 100 employees and no other qualifying retirement plans. If you’re self-employed, you likely qualify for a SIMPLE IRA as well.
• Coverdell Education Savings Account: Education Savings Accounts, or ESAs, are designed to grow funds set aside for education expenses. ESA beneficiaries must be under age 18 or have qualifying disabilities when the account is established. Contributions aren’t tax-deductible, but distributions are generally tax-free. Contributions are limited to $2,000 per tax year.

Unless otherwise noted, these accounts don’t have any ongoing fees charged by Ally Invest. Check with the IRS or your financial professional for important information about tax-advantaged account eligibility, suitability, restrictions, and more.

You Might Also Like: Not sure which IRA best suits your needs and objectives? Check out our in-depth post on the differences between traditional and Roth IRAs.

Forex and Futures Trading

Ally Invest offers separate accounts for forex (currencies) and futures trading.

The minimum deposit required to open a forex account is $250, but Ally Invest recommends at least $2,500 “to take full advantage of our products and to allow you more flexibility and better risk management.” The forex platform supports more than 50 currency pairs, plus gold and silver, and touts its tight spreads and transparent pricing scheme as major selling points. Unlike some competitors, Ally Invest doesn’t charge hidden fees or commissions on currency trades. If you’re a first-time forex trader, use Ally Invest’s practice portfolio to test strategies and get comfortable with the market.

Ally Invest’s futures vertical features a customizable trading platform with more than 100 technical indicators. It’s fully capable of supporting day traders and active investors seeking exposure to dynamic (if risky) metals, agricultural products, and other commodities. Commissions vary depending on volume, account size, and other factors, but start as low as $0.45 per contract.

Pro Tip: Assets held in forex and futures accounts are not protected by the Securities Investor Protection Corporation (SIPC). Assets held in other Ally Invest accounts are protected by SIPC, subject to certain restrictions and limitations: $500,000 in aggregate balances and $250,000 in cash claims. Note that SIPC doesn’t protect against investment losses due to market fluctuations – it only kicks in if the covered brokerage (in this case, Ally Invest) fails.

Managed Portfolios

Ally Invest’s managed portfolios are ideal for hands-off investors who aren’t sold on the DIY approach and aren’t convinced that they need to pay premiums for help from human financial advisors. There’s a minimum opening deposit of $2,500 and a flat advisory fee of 0.30% of assets under management (AUM) per year, regardless of balance size or investment mix.

Ally Invest’s managed portfolios are “professionally designed, personalized portfolios tailored to your financial needs, risk tolerance, goals and investment horizons.” Following an onboarding consultation with a human financial professional who assesses your goals and risk tolerance, they’re built largely with low-cost index ETFs. They’re then automatically rebalanced on a flexible schedule that turns on the composition of your portfolio, risk tolerance, balance, and time horizon. Trades made using this automated investment advisor are always commission-free.

Platform Tools and Resources

Ally Invest’s self-directed side has a nice lineup of tools and resources for enterprising traders and investors:

• Real-Time (Streaming) Charts: These customizable charts come in six different configurations, including the immediately recognizable candlestick and mountain varieties. You can plot the performance of indices, stocks, and ETFs with more than 90 visualization and drawing tools.
• Profit-Loss Calculator: This tool does the hard work of calculating the potential profit or loss of an options trade before it’s made. While it’s not predictive, you can use it to get a general sense of your likely exposure.
• Watchlist: This perennial brokerage tool lets you compile your favorite equities and funds in one place. Track their performance at your leisure, then pull the trigger when the timing is right.
• Snapshots and Market Data: Ally Invest’s market and company snapshots are information-rich (but not too dense) profiles built to increase your market IQ. The market data tool gives you a deeper, more granular look at companies, funds, and indices, including historical performance and key financial data.
• Probability Calculator: Like the profit-loss calculator, Ally Invest’s probability calculator isn’t predictive. But it does take a scientific approach to risk assessment, using implied volatility to determine the relative likelihood that your strategy will pay off.

Customer Support

Ally Invest has a robust customer support apparatus that includes call-in phone support and live chat. The call center, which serves Ally Bank and Ally Invest customers, is open 24/7 – I’ve called during the wee hours just to make sure. The system displays current wait times, so you can plan your calls accordingly.

The live chat system claims to be open 24/7, but my experience is more hit or miss. It’s unclear whether this is due to bad luck or systemic issues. Forex support is available from Sundays at 10am Eastern to Fridays at 5pm Eastern.

Advantages

1. No Minimum Deposit for Self-Directed Accounts. Like Ally Bank’s checking and savings accounts, Ally Invest’s self-directed accounts don’t have deposit minimums. That’s obviously great news for low-balance investors and a strong argument for Ally Invest’s inclusion on any first-time investor’s shortlist.
2. Low Fees for Managed Portfolios. Ally Invest’s managed portfolios carry low management fees: just 0.30% AUM, annualized, regardless of balance. By contrast, human financial advisers typically charge 0.75% to 1.50% AUM. Hybrid advisers that blend hands-on financial advice with automated investment management generally charge 0.50% to 1.00% AUM, depending on the platform and account balance. Ally Invest is more in line with fully automated platforms like Wealthfront and Betterment, which both tout low management fees as a major selling point.
3. Relatively Low Trading Commissions for Self-Directed Accounts. Ally Invest’s self-directed trading commissions are quite low relative to some competing full-service brokerages. You won’t pay more than $4.95 for a stock trade here, even if you only buy and sell occasionally. Some brokerages charge twice as much per trade.
4. Solid Account Opening Bonus Offers. Ally Invest’s dual account opening bonus offers hold their own against top bank account opening offers. The cash offer is worth $200 when you open a new account with at least $25,000 in new money. The free trades offer is worth up to $500, though you’d need to make at least 100 stock trades within 90 days to reach that cap.
5. Wide Range of Available Account Types. Ally Invest has a comprehensive lineup of account types: traditional self-directed brokerage accounts, a slew of retirement accounts, and specialized account types, such as forex/futures and managed portfolios. No matter your strategy or time horizon, you can probably find an account that suits your needs here.
6. Robust Customer Support. Ally Invest’s customer support team is available by phone and online chat 24 hours a day, seven days a week. This is a distinguishing feature of Ally Bank too. Most competing financial institutions limit customer support hours to business days, or close for 12 hours or longer overnight.
7. Access to Advanced Investment Products Through Forex and Futures Accounts. Many online brokerages forgo futures and forex, both advanced investment products that aren’t suitable for everyone. That Ally Invest makes room for them is great news for experienced users for whose investing or trading strategies these products may well be invaluable.
8. Full-Service Sister Bank Makes for Full-Spectrum Financial Management. Though functionally separate, Ally Bank and Ally Invest are clearly related. Ally Bank enthusiastically markets Ally Invest to its customers, for whom Ally Invest is an ideal first brokerage. Likewise, it’s not hard to see how high-yield Ally Bank deposit accounts might factor into Ally Invest customers’ diversification and liquidity plans. While many online brokerages have associated or adjacent banks, it’s rare to find one as comprehensive or well-run as Ally Bank.

Disadvantages

1. No Commission-Free Option for Self-Directed Users. Ally Invest has no commission-free trading or investing option for self-directed users. This is a drawback relative to subscription-based services, such as Folio Investing, whose unlimited plan allows up to 2,000 free trades per month – more than most users will ever need.
2. No Transaction-Fee-Free ETFs and No-Load Mutual Funds. Though it reserves the right to add them in the future, Ally Invest has no transaction-fee-free ETFs and no-load mutual funds at present. This is a major drawback for Ally Invest customers whose investing strategies rely heavily on these products. As low-cost ETFs and mutual funds are integral in passive and index investing, and for many investors with longer time horizons, this is a glaring omission. Competing full-service brokerages, such as TD Ameritrade and Schwab, have plenty of no-transaction-fee funds.
3. No Physical Infrastructure. Ally Invest doesn’t have physical branches or offices – you can’t meet Ally Invest staff in person, even if you’re a managed portfolio client. If you prefer to have a hands-on, personal relationship with the folks responsible for managing your money, a traditional financial adviser might be a better fit.

Final Word

Ally Invest is an above-average online brokerage, but it’s not the only trading and investing platform worthy of your hard-earned dollars. There are plenty of other options out there, and only you (perhaps in consultation with a financial advisor) can decide which one best fits your needs.

If you’re thinking about switching up your online investing game, feel free to share your thoughts and experiences here. What do you look for in an online brokerage? How do you find that elusive fit?