Ally Bank Changing ATM and Overdraft Policies

Ally Bank is just starting to notify its customers of some changes that will affect their checking, money market and savings accounts. The changes will be effective on 8/15/2015. These changes will probably have no effect on most savers.

The first change involves ATMs. Ally Bank is eliminating unlimited ATM fee rebates. Ally Bank will reimburse up to $10 per statement cycle in ATM fees other banks charge when customers use their Ally Bank debit card at any ATM machine nationwide. Ally Bank will continue to not charge its customers ATM fees.

If you use ATMs many times a month, you won’t have to worry. Ally Bank has joined the Allpoint network to allow customers no fee access to more than 43,000 ATMS in the U.S. Ally will include domestic Allpoint ATM locations on its ATM and Cash Locator app by the end of August, 2015.

It should be noted that the policy doesn’t change for ATM use overseas. Ally Bank only reimburses fees charged at other ATMs if the ATM you use is in the US. If you use an ATM overseas, you may be charged a fee of up to 1% of the transaction amount for the currency conversion and/or cross border transaction. Additionally, the ATM owner may charge you a fee.

The second change involves overdraft fees. Ally Bank is increasing the NSF fee from $9 to $25. Ally Bank will continue to limit the NSF fee to a maximum of one per day.

Ally Bank offers free overdraft transfer service and balance alerts to help customers avoid fees altogether.

My Take

These type of change is probably good for savers since Ally Bank will be spending less to accommodate the heavy ATM users or those who overdraft their accounts. The unlimited ATM fee rebates can easily be abused. This My Money Blog post showed that Ally Bank reimbursed all of the fees charged at expensive ATMs in Las Vegas casinos. I could see Ally Bank reimbursing some of its customers hundreds of dollars using these casino ATMs. I rather see Ally Bank using that money to pay higher deposit rates, and that’s also the case for overdraft fees. I think the vast majority of savers have never paid an overdraft fee.

If you are a heavy ATM user or if you do occasionally overdraft your accounts, you’ll find Ally Bank will still be very competitive as compared to other internet banks. The largest one, Capital One 360 (formerly ING Direct), doesn’t provide any ATM fee rebates. To avoid fees, you have to rely only on the Allpoint network or its own ATMs.

Capital One 360’s policy on overdrafts may be considered to be a little better than Ally Bank’s since it doesn’t charge a fee for overdrafts. You only pay interest on the amount you borrow. However, it’s easy to avoid the Ally Bank overdraft fee by setting up free overdraft transfer service and balance alerts. Just remember that all savings and money market accounts limit the number of withdrawals to six per statement period. Ally Bank charges $10 for each withdrawal when the customers goes over this limit (ATM withdrawals are unlimited).