Ally Bank vs. Simple: Do They Really Compare?

Ally Bank, Member FDIC and Simple are both online financial institutions, however their approach to banking couldn’t be more different. Ally is a bank with a full suite of banking products, while Simple is a fintech company that partners with its parent company, BBVA Compass. BBVA Compass has the same FDIC insurance and banking regulations as Ally Bank. One way to think about Simple is as an interface that provides features and benefits while your money is deposited at BBVA Compass. Simple offers a single checking-like personal spending account, as well as smartly-designed budgeting tools.

Both institutions offer low-fee, online banking options with high interest rates, plus valuable extra features and benefits. There are distinct differences between Ally Bank and Simple, however. As you dig through the details of both Ally Bank and Simple below, one is likely to emerge a clear winner depending on your needs as a customer.

Ally Bank vs. Simple: An overview

Ally Bank currently has a reputation as a low-fee online bank, but it’s by no means a new kid on the block. The bank traces its roots all the way back to 1919 when it formed as GMAC, a division of GM. Now it offers a wide variety of products, from online checking and savings accounts to IRAs, certificates of deposit (CDs), auto loans and home loans, and numerous investment options. Customer service is excellent, with 24/7 access via live chat, email and phone, with a live person available at any time. Fee-free ATM access is available via the Allpoint ATM network, and Ally rebates up to $10 per month in fees charged by out-of-network operators.

Simple is a product of the new age of online banking, tracing its roots back to 2009. The banking experience is completely tailored to mobile experience, providing banking and budgeting inside one package in the Simple app. Simple offers fee-free ATM access via the same 40,000+ Allpoint ATM network as Ally, but it doesn’t rebate fees charged by out-of-network operators.

Perhaps the biggest difference between Ally Bank and Simple at the present time is that Ally Bank offers a broad menu of banking services, while Simple is focused exclusively on a personal spending account. Simple also has more limited customer service options; the bank has no live chat, and phone lines are only open from 9 a.m. to 7 p.m. ET on business days, and 10 a.m. to 5 p.m. ET on Saturdays.

Ally Bank vs. Simple: Account options

Ally Bank offers a comprehensive line-up of account types that can fit the needs of nearly any customer. On the banking side, Ally offers a money market account, a checking and a savings account, as well as certificates of deposit (CDs). None of these accounts require a minimum opening deposit, and none charge monthly maintenance fees. Ally accounts offer the following free services:

• Standard or expedited ACH transfers
• Copies of online statements
• Incoming wires, both domestic and international
• Postage-paid deposit envelopes
• Cashier’s checks

This doesn’t mean that Ally Bank doesn’t have any fees. Although most standard account services come free of charge, there are some costs for special circumstances, as outlined below.

Ally Bank’s CD line is impressive in its diversity. In addition to seven maturities for its high-yield CD line, from three months to five years, the bank also offers an 11-month No-Penalty CD and both two- and four-year Raise Your Rate CDs. There are no minimums on Ally Bank CDs, although you can earn a higher rate with a larger deposit. Ally Bank CDs have no monthly maintenance fees and can be managed online. Interest is compounded daily, and Ally Bank offers a 10-day rate guarantee in case rates rise shortly after you purchase a CD. Customers earn a loyalty reward of a 0.05% APY rate bump when they renew a CD with Ally Bank. Early withdrawal penalties vary based on the length of the initial CD term, ranging from 60 days’ interest for terms of 24 months or less to 150 days of interest for terms of 49 months or longer.

Simple doesn’t offer much in the way of different accounts, with just a single checking-like spending account. However, it does offer various features and benefits that Ally Bank doesn’t. Simple operates as a single account with budgeting and spending in a unified ecosystem. It accomplishes this through Goals and Safe-to-Spend.

• The Goals feature allows you to establish specific spending goals, including the amount you want to regularly contribute, and it separates this money from your Safe-to-Spend account.
• The Safe-to-Spend feature can be used as a “free cash flow” account, as it only shows your available balance. This amount is calculated by taking your total account balance minus any Goals or regularly scheduled bills. This handy feature allows you to see at a glance how much you can spend on any given day for discretionary purposes, without having to do all the calculations yourself.

In terms of overall account capability, there are some other noteworthy distinctions between the two accounts as well. For starters, Ally Bank offers trust accounts, while Simple does not. Other distinctions include:

• Beneficiary designations
  • Ally Bank: allows easy beneficiary selection or changes online
  • Simple: must send a support message or call the bank at (888) 248-0632
• ACH limits
  • Ally Bank: outbound transfers limited to $150,000 daily and $600,000 monthly
  • Simple: a total of $2,000 in the first 30 days after account opening; $2,000 per day, up to $10,000 per month, for accounts open 30 days or longer
• Daily transaction limits

  Transaction	Ally Bank	Simple
  Debit card transactions	$5,000	$6,000 ($1,000 for international transactions — can be raised to $6,000 with advance notification)
  ATM withdrawals	$1,000	$500
  Cash advance	Treated as a debit from account, so limited to daily ATM transaction limit of $1,000	$1,000 ($500 for international transactions)
  Cumulative total	As per individual category limits	$8,000

Ally Bank vs. Simple: Rates

All rates are accurate as of 8/23/2019

On a straight-up checking account comparison, Simple trounces Ally Bank, offering a rate more than triple the best rate posted by Ally. In fact, the checking account rate for deposits of less than $15,000 is actually surprisingly low, coming in at half the national average. However, Ally Bank also has a high-yield online savings account that pays nearly as much as the Simple checking account, well above the national average. Simple offers no savings account at all.

This disparity continues in the CD category, as Simple doesn’t offer CDs while Ally Bank not only offers a significant range of CDs but also pays high rates. The 1-year CD at Ally Bank is nearly double the national average, while the 5-year CD pays about 25% higher than the national average.

Ally Bank vs. Simple: Fees

On the fee front, both Ally Bank and Simple succeed admirably. Essentially, neither charges fees for services that most customers want. Both banks have no account maintenance fees and no ATM fees. However, this comes with a caveat. Customers of both banks are susceptible to out-of-network surcharges from ATM operators, but only Ally Bank offers to rebate those fees, up to $10 per month.

One important distinction is that Ally Bank does charge $25 for overdrafts, up to one time per day, whereas Simple does not. However, Ally Bank makes this fee easy to avoid with its overdraft protection service, which allows a fee-free transfer from another account to cover the overdraft. This emphasizes the importance of the diversity of Ally Bank’s overall bank offerings — if Ally Bank didn’t offer additional accounts to cover an overdraft, there would be no way to avoid that $25 fee.

For those looking for a more traditional banking relationship using paper checks, Ally Bank is the winner when it comes to fees, as it issues checks free of charge. Simple, on the other hand, charges $5 for paper checks. This is an important distinction because Simple ended their online bill pay program on July 9, 2019, meaning that many customers will have to resort to ordering paper checks to make their checking-like spending account truly useful. In addition to having free paper checks, Ally Bank still offers free online bill pay as well.

Ally Bank does charge fees for other less-common account transactions, as outlined here:

• Returned deposit item, $7.50
• Excessive transaction fee, $10 per transaction
• Expedited delivery, $15
• Outgoing domestic wires, $20
• Account research fee, $25 per hour

The excessive transaction fee refers to certain savings account withdrawals in excess of six per month, specifically electronic and phone transfers or transfers to cover overdrafts.

For Simple, the fee schedule is essentially nonexistent. With the exception of the $5 fee for ordering paper checks, Simple doesn’t charge for anything. You may encounter out-of-network charges from ATM operators, but those aren’t charged by Simple.

Who should bank with Ally Bank?

There are three main reasons why a potential customer might prefer Ally Bank:

• Wide array of products
• High interest rates
• Customer service

For an online bank, Ally Bank offers a comprehensive array of financial products. Although checking and savings accounts are often the gateway into an online bank, Ally Bank goes far beyond these intro accounts to offer high-rate CDs, IRAs, loans and other financial products. Customers looking for more than a simple high-rate savings account can have a full and complete financial relationship with Ally Bank.

Of course, high rates are one of the main attractions at Ally Bank; the bank itself realizes this, as its high rates are plastered all over its web pages. The online savings account rate isn’t the highest in the nation — and it’s not as high as Simple’s checking account rate — but it’s competitive, and far above the national average. The bank’s line of CDs pays very high rates as well.

One of the potential concerns for some customers with an online bank is the lack of a physical branch for customer service. Ally Bank goes above and beyond in this category, as it has customer service reps that are literally always available. Whether you prefer live chat, email or an actual person at the end of a phone line, you can contact an Ally Bank customer service representative 24 hours a day, 7 days a week.

Who should bank with Simple?

Simple also has valid reasons for why one might prefer it over Ally Bank:

• High interest rate
• All-in-one account experience
• No fees

If you’re looking for the best interest rate on your money, Simple has Ally Bank beat. With a current APY of 2.02%, Simple will pay you more than any Ally Bank checking or savings account. Considering the Simple account has no minimums and no fees, this is a good option for those who may not need or want the additional Ally Bank products and just need a parking place to earn higher interest.

Simple offers a unique all-in-one account experience that is different than that provided by Ally Bank. Whereas Ally Bank has numerous separate accounts, Simple has only one, with all of its features and benefits built into the single account. If you’re looking for help with budgeting and setting savings goals, Simple is an interesting option. The Goals feature allows you to target any number of savings goals, such as vacation or retirement, while the Safe to Spend feature prevents you from dipping into your savings or expense accounts for day-to-day discretionary spending. These features can be immensely helpful for people who don’t want to have to compute their own budgets or who might be in danger of overspending if they see money in their accounts.

The last type of customer who might be drawn to Simple is the fee-averse customer. Although Ally Bank also does an admirable job of avoiding account fees, it does still have a few fees that customers may trigger -- including a steep overdraft fee if overdraft protection is not set up. With the exception of a $5 charge for paper checks, Simple literally has no fees whatsoever.

Ally Bank vs. Simple: Which is the better online bank?

As befitting its long history of providing financial services, Ally Bank is a one-stop shop for customers seeking comprehensive financial services, all wrapped up in a convenient, online package. Simple, on the other hand, offers a focused, streamlined experience, offering limited options but doing them very well.

Overall, Ally Bank is the clear winner for most customers. In a head-to-head comparison, Simple comes out on top primarily in one area – APY. As of writing, Simple pays 0.12% above the Ally Bank high-yield savings account. However, considering that rates fluctuate all the time, and that even higher rates can be currently found at other online banks, that seems like a slim thread to hang an entire banking relationship on.

Ally Bank still offers a competitive APY, and it also provides a checking account, investments and loan options. Importantly, the bank also offers up to $10 per month in out-of-network ATM fee rebates, which can be hugely convenient if you’re in a rush and don’t happen to be near one of the 40,000+ fee-free Allpoint ATMs.

Simple may have an edge for customers who want all of their budget and spending handled in a single account. The Goals feature, when combined with Safe-to-Spend, can be helpful for those who might struggle with raiding their savings accounts to make discretionary purchases.

Net-net, Simple offers an easy-to-use, mobile-friendly place to stash your cash, along with various slick mobile features, but Ally Bank’s all-in-one package is likely a better overall option for most customers seeking an internet bank.