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In this Ally Invest review, we’ll cover this platform’s features, its pros and cons, and how to set up an account so you can decide if it’s right for you.
Table of Contents
What Is Ally Invest?
Ally Invest is an online brokerage that charges zero commissions on most trades and requires zero minimums. Plus, its robo-investing service charges — you guessed it — zero advisory fees.
Ally Invest is part of the Ally Financial family. Its “sibling” is Ally Bank, which offers excellent interest rates on savings products and zero fees (duh!). You can actually link your Ally Bank and Ally Invest accounts, giving you a one-stop shop for most of your financial needs.
Back in 2016, Ally Financial purchased TradeKing, a popular online discount brokerage firm. Ally rebranded TradeKing as Ally Invest, and the rest is history…
That is, until October 2019, when a big new plot twist occurred.
Ally Invest joined a number of other online brokerages in eliminating commissions on most stock, ETF, and options trades. This was big news and the culmination of a long price war among brokers.
Now that Ally Invest is essentially free (there are a few scattered fees that might apply here and there), it’s a great stock broker for anyone who is either an avid, active trader or totally new to investing.
How to Sign Up for Ally Invest
Signing up for an Ally Invest account is very easy. And right now, using this promo link will let you earn up to $3,500 in bonus cash when you open and fund a new self-directed account.
Once you click “Open an Account” on that promo page, Ally Invest will ask you if you’re new to the Ally Financial family or if you already have an Ally Bank or other Ally Invest account. You’ll also need to enter your first and last names and email address.
Next, you’ll need to determine what kind of account you’re opening. This is an area where Ally Invest really shines. Currently, you can open 13 different types of accounts with Ally Invest, including a variety of IRAs.
After that, you’ll need to enter basic data such as your Social Security number, your annual income, net worth, and whether you have any experience trading securities.
Finally, Ally Invest will ask you a list of questions designed to give Ally an idea of your investor profile. You can choose between several options with varying levels of risk. From this screen, you can also apply for a margin or options trading account.
Confirm your information, sign the agreement, and you’re done!
Overall, the application is easy to navigate and takes less than 10 minutes from start to finish.
What Can You Trade With Ally Invest?
What kind of investments can you trade with Ally Invest? Currently, the brokerage offers these investment types:
- Stocks (Free!)
- Exchange-traded funds (Free!)
- Options (50 cents per contract)
- Bonds ($1 per bond; $10 minimum)
- Mutual funds ($9.95 per trade)
What Tools Does Ally Invest Offer?
Ally Invest offers a number of great tools to help users successfully trade stocks and funds. These include detailed charts, information on and insights into individual companies, security watchlists, options chains, and calculators that help you determine the probability of profitable trades.
Is Ally Invest Safe?
Because Ally Invest is an online-only service (there are no brick-and-mortar offices you can visit), some potential users are concerned about online safety. Ally Invest uses 128-bit SSL encryption anytime personal information is transmitted between your computer and Ally’s infrastructure.
Your money is safe, too. Ally Invest is a member of the Securities Investor Protection Corp. (SIPC). That means your account is protected up to $500,000, including a maximum of $250,000 for cash claims. In addition, Ally Invest has purchased additional insurance to protect customers in case the SIPC limits have been met.
Keep in mind that this coverage applies to your investments only if Ally Invest were to fail. It does not cover losses incurred by stock market movements.
Is There an Ally Invest Mobile App?
Not only can you use Ally Invest’s trading platforms from your desktop computer, but you can also place trades and track your investments with a mobile app available for both Apple and Android systems.
Ally Invest Cash-Enhanced Managed Portfolio
Instead of — or in addition to — opening a brokerage account with Ally Invest, you can also opt for the company’s robo-advisor service.
If you want to begin investing without getting your hands dirty, Ally Invest’s Cash-Enhanced Managed Portfolio option takes care of the hard work for you. With this option, Ally tailors an investment portfolio to fit your needs, and its team monitors your accounts. There are no advisory fees for this account.
Based on a four-step questionnaire, Ally Invest considers your preferences and needs when crafting your portfolio. Although Ally Invest provides recommendations for portfolio adjustments, you always have the option to manually make changes to meet your investment comfort level.
Most of your portfolio will consist of exchange-traded funds (ETFs), but roughly 30% will be set aside as a cash buffer. Your cash will earn interest (1.90% at the time of writing) and is intended to protect your portfolio from market downturns.
There’s a $100 minimum to open a Cash-Enhanced Managed Portfolio account.
The Cash-Enhanced Managed Portfolio can be compared to other robo-advisors, but it stands out because it’s free and requires a relatively low minimum ($100).
Betterment charges an annual fee of 0.25% but doesn’t require a minimum investment. Wealthfront charges 0.25% too, but it requires a minimum of $500 to invest. Acorns charges $1 to $3 per month but doesn’t have a required minimum.
How to Open a Cash-Enhanced Managed Portfolio Account
When opening a Cash-Enhanced Managed Portfolio account with Ally Invest, you’ll first answer a four-step questionnaire to help Ally craft the optimal portfolio for your situation. This questionnaire asks you:
- How much money you plan to invest at this time
- What your investment goals are
- How many months or years you’re planning on keeping your funds invested
- How much risk you’re willing to accept with your investments
Once you complete the questionnaire, Ally will provide your recommended personal portfolio.
You’ll then fill out a brief online form to register your Ally account.
A Quick Peek at Other Ally Services
Ally Financial also offers other financial services, such as banking and loans. These products are generally in line with Ally’s investment products in terms of quality and competitive rates.
Auto and Home Loans
Ally Financial offers auto and home loans. The auto loan page has a handy calculator to estimate your car payment based on the loan amount and interest rate. Its site doesn’t provide an auto loan rate table, but you can search to find a dealer near you that partners with Ally.
Ally’s home loan page offers much more comprehensive information, including published rate information. You can contact an Ally Home Loan Advisor at 1-855-256-2559 to see if you pre-qualify for an Ally home loan, or you can submit an application online.
Banking
Ally Bank has a lot of options for banking from high-yield savings accounts to IRAs, CDs, and money market accounts. If you’re looking to diversify your accounts, Ally Bank provides plenty of ways you can make that happen. You can also quickly compare rates across different deposit products and view links to competitor rates so you can find the right account for you.
Ally Invest Review: Pros and Cons
Ally Invest is a convenient online option for would-be investors. Here’s a quick list of pros and cons if you’re considering investing with Ally.
Pros
- Commission-free stock, ETF, and options trades
- 24/7 customer service
- No minimum balance for the brokerage service
- Plenty of resources and tools to help you manage your account wisely
- Option for a managed account if you don’t want to manage it yourself
Cons
- No physical branches for in-person support
- Mutual funds have transaction fees ($9.95 per trade)
- Minimum $100 required for a Cash-Enhanced Managed Portfolio account
Whether Ally Invest is right for you depends on your investment goals and how much one-on-one attention you need as you grow your money.
Ally Invest Review: Who Is Ally Invest Best For?
Ally Invest is a solid company with a good reputation. Its rates are lower than many other companies in the industry, and it offers 24-hour customer service. The company makes it easy for you to take as much or as little control of your investments as you want.
If you’re looking for a little flexibility in how you handle your investments, Ally Invest may be a good option for you.
Overall, Ally Invest is a great stock broker for beginners looking to start trading, but it also gives experienced investors a simple commission-free trading platform.
It just may be the best of both worlds!
Plus, if you sign up now for Ally Invest, you can enjoy a cash bonus of up to $3,500.
Author:
Angela is a finance and real estate writer based out of Salt Lake City, Utah. She has contributed to publications such as LendingTree and FinanceBuzz.
