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Ally Bank Launches an Interest Checking Account

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Ally Bank
Ally Bank has added a checking account to its online products. It's an interest checking account that currently pays 1.15% APY on balances over $15K and 0.50% APY on smaller balances. Some important features include:
  • No minimum balance or monthly fees
  • Free Online Bill Pay
  • Free standard checks and no limit on check writing
  • You can use any ATM worldwide and Ally will automatically refund ATM fees charged by other banks
As I mentioned on Wednesday, Ally Bank's money market account can be used as a checking account if you don't need to write many checks (no more than 6 per month).

Comparison to Other Interest Checking Accounts

With this new checking account, Ally has an edge on many of its internet competitors including ING Direct and HSBC. There is a concern about future rates at Ally since there is the rate cap issue that I mentioned on Wednesday. But if Ally can stay near the top on rates, its banking features will still give it an edge in my opinion. As I mentioned on Wednesday, it has one of the best bank-to-bank ACH transfer services. Some reasons why it's one of the best include: No limit on the number of links to your other bank accounts, transfers are fast and it doesn't place small limits on the amount that can be transferred. Not many banks have all these features.

The features and the rates of Ally's interest checking account make this competitive compared to others such as Schwab Bank High Yield Investor Checking which has similar features and a 0.75% APY on all balances as of 1/15/10. Ally's checking interest rate is not great, but compared to other internet non-reward checking accounts, it's competitive. If you want higher rates in a non-reward checking account, Alliant Credit Union and Clear Sky Accounts would be two good choices. Incredible Bank currently has the highest rate of 2.02% APY, but this is a newcomer, and it's hard to say if it will be able to stay competitive over the long run (see review). For other high-yield, non-reward checking accounts, DepositAccounts.com has a table of classic checking accounts.

If you want rates higher than 2% from a checking account (or any liquid account), your only option is a reward checking account. It'll require some work to meet the monthly requirements. You can find reward checking accounts at the reward checking section of DepositAccounts.com. To learn more about reward checking, please refer to this reward checking overview.

  Tags: Ally Bank, checking account

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Comments
16 Comments.
Comment #1 by Anonymous posted on
Anonymous
hard or soft pull?

1
Comment #2 by Anonymous posted on
Anonymous
Just wanted to let you know that I renewed our 1-year CD today with Ally, and they did offer the "loyalty bonus" of .5% added to the 1.73% interest rate - for a final interest rate of 2.23% for a year - not bad in these times.

1
Comment #3 by bryce.billing (anonymous) posted on
bryce.billing
Schwab just dropped their checking to 0.52% APY and savings to 1.05% APY

1
Comment #4 by Anonymous posted on
Anonymous
I couldn't get a straight answer from customer service on what the foreign ATM transaction fee would be. I was told it is a pass-through from Mastercard at 1-2% ... but they couldn't tell me if it's 1% or 2% or if it is in fact country-dependent, then what it is for a specific country. Ugh.

1
Comment #5 by Anonymous posted on
Anonymous
Schwab checking is still at 0.75%. I've seen several websites listing 0.52%, but I'm an actual customer and everything on Schwab.com including my personal account still says 0.75%.

1
Comment #6 by Eckie (anonymous) posted on
Eckie
Schwab also has excellent customer service and actual brick and mortar locations (albeit for brokerage uses).  They also offer the atm fee reimbursement as well as free cheques with their Schwab One package.  Free Schwab ETF trades to customers too!

2
Comment #8 by sam (anonymous) posted on
sam
Free overdraft service and balance alerts.

I wonder would the overdraft service can do it over the saving or money market account, so that we can keep 0 or near zero in interest checking to maximize the interest.

1
Comment #9 by Anonymous posted on
Anonymous
This is in response to Anon comment #4. This is what it says for my Ally Visa Check Card disclosure regarding foreign ATM transactions.

Exchange Rate Disclosure
Visa selects from the range of rates available in wholesale currency markets for the applicable central processing date. An additional Issuer fee equal to 1% of each foreign transaction will be assessed.

3
Comment #10 by Anonymous posted on
Anonymous
Is the debit card a Master Card or Visa?

1
Comment #11 by Anonymous posted on
Anonymous
Chatted with online customer service rep who confirmed it is a HARD credit pull, regardless if you have an existing Ally account or not.

1
Comment #12 by cactus posted on
cactus
1099 finally showed up on Feb 6. They are a relatively new outfit with some process problems.

2
Comment #13 by cactus posted on
cactus
Got another 1099 today, February 8. It was for the $0.03 interest on the savings account.

Eight days after the federally-mandated deadline.

There is no requirement to send reports of less than $10 to customers.

These guys are amateurs.

cactus - #12, Saturday, February 6, 2010 - 4:33 PM CT

1099 finally showed up on Feb 6. They are a relatively new outfit with some process problems.

1
Comment #14 by darkdreamer4u posted on
darkdreamer4u
Had an online chat with Ally concerning an issue I inquired about last January upon opening the checking account. The issue is that scheduled billpays are not reflected in the future view of available balance. 'Dale' promised to escalate this to the next level. We'll see...

1
Comment #15 by Anonymous posted on
Anonymous
According to an Ally CSR that I just chatted with, there is a 1% foreign transaction fee with the VISA debit card that comes with the money market account.  The Interest checking account comes with a Debit MasterCard, and all the CSR could tell me was that MasterCard has a 1-2% foreign transaction fee.  The CSR had no idea if it was 1% or 2%, which I found a little frustrating.

2
Comment #16 by Anonymous posted on
Anonymous
If there's a foreign transaction fee of 1%, how much is their foreign exchange fees on top of that?

1
Comment #17 by BELLY (anonymous) posted on
BELLY
To # 16.

I gather that the excange rate on you Visa is : depends on the market rate of the money plus the 1% fee.Does this make sense ?

1