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Ally vs. Capital One: Which One Is Better?


Written by David Rodeck | Published on 4/12/2019

Ally Bank and Capital One are two financial innovators challenging the traditional banking industry. Both Ally and Capital One focus on alternatives to brick-and-mortar branches, so they can deliver lower fees and higher rates to their customers.

Ally started as a regular bank in 1919. Its original name was GMAC, and it was part of General Motors. In 2009, during the financial crisis, it decided to change its business model. It shut down its physical branches and shifted to an online-only approach under a new name, Ally.

Capital One has only been around since 1994. Its original focus was on credit cards, but it has since expanded to offering bank accounts and loans. While Capital One has branches in a few states like New York, New Jersey, Texas, Louisiana, Maryland and Virginia, as well as DC., it deals with most of its customers online. It also runs Capital One cafes, which are a mix of a coffee shop and a bank.

These banks know that they need to work hard to attract customers in the competitive online space, which is why they both offer excellent rates. But if you compare Ally vs. Capital One, is one better than the other? We analyzed the details so you can see.

Ally vs. Capital One: Rates

To start our review, we compared the rates for Ally vs. Capital One on their standard checking account, standard savings account and two certificates of deposit. We also listed the national average for each product, as well as the online banking average. You can see that online banks pay much higher rates than the national average since they have fewer expenses like branches.

Ally Capital One National Average Online Bank Average
Savings 2.20% APY 1.00% APY 0.272% APY 1.52% APY
Checking 0.10% APY for balances less than $15,000

0.60% APY for balances $15,000 and up
0.20% APY for balances between $0-$49,999.99

0.75% APY for balances between $50,000-$99,999.99

1.00% APY for balances $100,000 and up
0.191% APY 0.41% APY
1-year CD 2.75% APY 2.70% APY 1.373% APY 2.09% APY
5-year CD 3.00% APY 3.10% APY 2.249% APY 2.70% APY
As of 4/12/2019

Both Ally and Capital One offer competitive rates, as all their accounts pay more than the national average. In most cases, they even pay more than the higher online bank average. For savings accounts, Ally is the clear winner. It pays more than double the rate at Capital One and offers one of the best savings accounts in the country.

For checking accounts, the higher earner depends on how much you plan on keeping in your account. Ally is better only if you keep between $15,000 to $50,000 in your account. For smaller and larger balances, Capital One has the better rate. However, there are other institutions that offer some of the best checking account rates nationwide.

Ally and Capital One have some of the best CD rates, so in this category, it’s a draw. Overall, both banks pay excellent rates across the board on their deposit accounts.

Ally vs. Capital One: Account options

When it comes to account options, Ally and Capital One have a similar lineup. They both offer a checking account, a savings account, a money market account, CDs and IRAs. This covers the full range of deposit accounts, so you can find one of any type at the two banks.

Ally and Capital One keep their offerings simple. For adults, they each only offer one type of checking account, one type of savings account and one type of money market account. There aren’t different options with different rates, balance requirements, fees, etc. This makes deciding easier because you don’t need to sort through multiple options. But there are no premium accounts for larger balances.

One notable difference between the two banks is for CDs. Capital One only offers regular, fixed-rate CDs. The CDs always earn the same interest rate, and you can’t take out money without owing a penalty.

Ally also offers fixed-rated CDs, but it has a few other options as well. It offers a Raise Your Rate CD, which lets you request a higher payout if interest rates go up after you enroll. Ally also has an 11-month no-penalty CD, which lets you take out money before the maturity date without a penalty. If either of these specialty CDs caught your attention, you can only find them at Ally.

Ally vs. Capital One: Fees

Ally Capital One
Standard savings account No monthly fee or minimum balance requirement No monthly fee or minimum balance requirement
Standard checking account No monthly fee or minimum balance requirement No monthly fee or minimum balance requirement
ATM fee Free in-network withdrawals from Allpoint ATMs. Ally does not charge a fee for out-of-network transactions, and will refund up to $10 per statement cycle in fees from out-of-network ATM owners. Capital One offers free withdrawals from its ATMs, as well as ATMs in the Allpoint network. If you make an out-of-network transaction, Capital One will not charge a fee. But it will not refund any fees from the ATM owner.
Overdraft fee $25, maximum of one charge per day $35, but only if you opt in for Capital One to cover overdrafts. Otherwise, your account will automatically decline transactions that go over your balance at no charge.

Compared to your typical large bank, Ally and Capital One are great at keeping costs low. Neither bank charges a monthly fee for its checking and savings accounts. They also do not have minimum balance requirements, so you can launch your account for any amount of money and don’t have to worry about how much is in your account.

Ally and Capital One have similar ATM access because they both give free access to the Allpoint network, one of the largest networks in the country. Capital One also provides free ATMs at its banks and service centers.

Ally doesn’t have its own ATMs. But it will reimburse $10 per month for out-of-network ATM fees. While Capital One does not charge a fee for out-of-network use, it also does not reimburse the charges from the ATM owner. Ally gives you a bit more flexibility to access your money from anywhere.

Finally, for overdraft fees, Ally is less expensive: $25, versus $35 at Capital One. Capital One offers several options so you can avoid its charge, like getting these transactions automatically denied.

Who should bank with Ally?

If you want a high-paying savings account, Ally is one of your very best options. Its savings rate is not only better than Capital One, it’s one of the highest in the entire country. Its savings account also has no monthly fee and no balance requirement, and the high rate applies to any balance, large or small. That’s a tough combo to beat.

Beyond its savings account, Ally also has a fantastic money market account and a nice variety of high-paying CDs. We liked that, on top of its regular CDs, it also has some specialty options that give you the flexibility to take out money early or increase your rate in the future.

The weakest account at Ally is its checking account. It doesn’t start to pay a competitive rate until you have at least $15,000, which is too high for the average checking balance. Ally is great for your long-term savings, but you can do better elsewhere for your day-to-day finances. Before signing up, keep in mind that Ally is completely online. You should only work with it if you are comfortable not having any face-to-face contact with your bank.

Who should bank with Capital One?

Capital One combines the high rates of an online bank while still keeping some of the personal customer service of a brick-and-mortar organization. Depending on where you live, you can stop by a Capital One branch and/or cafe to get help with your finances, while getting a nice cup of coffee at the same time. This could be appealing if you’re not ready to go online-only just yet.

The Capital One deposit account rates are all respectable. Its CDs earn just as much as the top-notch offers at Ally. For the checking account, Capital One also pays a little more interest. But its ATM feature is not quite as good because Capital One doesn’t refund fees for out-of-network transactions. If you work with Capital One, make sure to only use its ATMs, or ATMs in the Allpoint network.

Capital One’s savings account is the least impressive option. While it pays more than the national average, you can earn much more with Ally.

Alternatives

Capital One and Ally do a lot right with their deposit accounts. But no one bank can deliver everything perfectly. Checking accounts are not very competitive with both Ally and Capital One because they both require a five-figure balance before you earn their more generous rates.

If you’re looking for a bank account or want to see how these two banks match up against the competition, you can research more through our comparison feature. It compares the rates for over 11,000 banks and credit unions around the country. We also have in-depth reviews that dive into each institutions' strengths and weakness.

As you compare other accounts, your best bet is likely with online banks, as they tend to pay the highest rates because of their lower expenses.

Comments
C One
C One   |     |   Comment #1
The 360 Money Market at Capital One pays 2%. But has a 10k minimum to get that 2% yield.
anonymous
anonymous   |     |   Comment #8
Yes, I wish that would have been included in the comparison. Capital One's money market account is what competes with Ally's saving account.

Also, Capital One has a branch network, whereas Ally does not. So if you live in an area with Capital One branches, on balance, Capital One is hard to beat.
vladimir
vladimir   |     |   Comment #2
Ally has better customer service than capital one
Edward
Edward   |     |   Comment #3
CAPITAL ONE does not send paper statements. This may be a problem for some older people or anyone that wants heirs or caregivers to be aware of a persons bank accounts.
Jim
Jim   |     |   Comment #5
Agree with Edward. At the very least, these companies could mail one paper year-end statement? I suppose some people just print out a statement from the website? Or we could call and request one. For now, I just write down the basic acct info for my heirs. They know where to find it.
anonymous
anonymous   |     |   Comment #7
I receive paper statements from Capital One. I opened my checking account in a branch, so it's not a 360 Checking account, and I've always received statements for it (but not the 360 accounts). Starting at the beginning of this year, I was surprised that I now receive a consolidated monthly paper statement of all my Capital One accounts, including the 360 accounts. But my checking account ("Total Control Checking") has some minimum requirements to avoid a monthly fee, so it's more of a traditional checking account. (Probably if I didn't have that account, I wouldn't get paper statements.)
ltp
ltp   |     |   Comment #4
I have several accounts with each bank. I have noted sluggish (3 business days) ACH transfers by Ally compared with Capital One. On the other hand, Ally has no limit on the number of external banks that can be linked. Three external banks is the limit for Capital One.
???
???   |     |   Comment #6
20 external links
1 day transfer if account qualifies.

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