It will be introduced by the end of the week. We don't have many details other than it will be a checking account.
If it's like the checking accounts at other online banks, the rate will probably be much lower than the savings and money market accounts. The benefit of the checking account is that it shouldn't limit the number of transactions. The savings and money market accounts have a limit of 6 per month. Also, I would assume it'll offer online bill pay.
Ally's Money Market Account as a Checking Account Alternative
For those who don't need to make many transactions per month, Ally's money market account is a good alternative to a checking account. You're allowed to write up to 6 checks per month. Note, the check limit for money market accounts used to be 3, but the Federal Reserve changed the regulation to 6 transactions of any type including checks. I'm glad to see Ally has updated its rules to match this regulation change.
Money Market Rates and Rate Changes
Ally Bank used to change rates on Fridays, but now rate changes are happening on any day. The 12-month CD yield just fell from 1.80% to 1.79% APY today. Last week, the money market and savings account yields also fell by 1 basis points. They're now 1.49% APY as of 1/13/10. Ally's rates have remained competitive, but the only question now is how much will their rates be constrained by the FDIC. According to this November WSJ article, the FDIC is forcing Ally to keep rates below the nation's top five rate payers, as measured by Bankrate.com. This might explain why they've been cutting their rates by just one basis point. Currently on Bankrate.com, there are only 4 savings accounts with APYs higher than 1.50%. By dropping their rate to 1.49% APY, they're below the top 5.
Even if Ally Bank will no longer be a rate leader, 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.
Thanks to the reader who mentioned this news in the comments.