Ally Invest vs Etrade


Compare Etrade versus Ally Invest - which company is better in 2021? IRA/Roth accounts, online investing fees, stock broker mutual fund rates, and differences.



Overview of E*Trade and Ally Invest


Ally Financial is known mostly for its bank. But it also has a brokerage unit, aptly named Ally Invest. E*Trade, by comparison, is mostly known for its investing services. But it, too, has a bank. Which one should you choose? Take a look at our research:


Pricing


Broker Fees Stock/ETF
Commission
Mutual Fund
Commission
Options
Commission
Maintenance
Fee
Annual IRA
Fee
Ally Invest $0 $9.95 $0.50 per contract $0 $0
Etrade $0 $19.95 $0.65 per contract $0 $0


Services


Broker Review Cost Investment Products Trading Tools Customer Service Research Overall Rating
Ally Invest
Etrade


Promotion Links


Ally Invest: Up to $3,500 cash bonus + $0 commission trades.

E*Trade: Get zero commission on stock and ETF trades.



1st Category: Assets That Can Be Traded


E*Trade and Ally Invest have similar product lineups. With a brokerage account at either firm, you’ll be able to trade:

- Stocks
- ETFs
- Closed-end funds
- Mutual funds
- Options
- Fixed income

E*Trade adds futures contracts to the list, while Ally Invest adds forex and precious metals.

Winner: Ally Invest


2nd Category: Margin Borrowing


Futures and forex have their own unique margin policies, which in fact aren’t margin at all when compared to margin for securities.

With a securities account at either E*Trade or Ally Invest, you’ll be able to trade with borrowed funds. This service isn’t free, and it’s not cheap, either, judged by current interest rates.

E*Trade customers pay between 5.45% and 8.95%. Ally Invest charges between 3.25% and 7.75%.

Winner: Ally Invest


3rd Category: Investment Education


Learning materials will be bound on both the E*Trade site and the Ally Invest site. During our probing, we found a Knowledge center on E*Trade’s site; this section hosts many articles on investment topics, including these samples:

- What is diversification and asset allocation?
- Understanding capital gains
- Understanding technical analysis support and resistance

On Ally’s site, we also found many articles on a range of topics. Examples include:

- How to Build an Investment Portfolio That Fits Your Style
- 3 Steps to Supercharging Your Savings
- How to Build a Thriving Business

A lot of materials on Ally Invest’s educational section come from Ally Bank, which means there’s a larger focus on issues outside of investing.

Winner: E*Trade


4th Category: Security Analysis


For the analysis of specific assets, both broker-dealers provide screeners, commentary, recommendations, and other resources. On Ally Invest’s site, we found a stock screener with many search variables. Results can be sorted by several criteria, and there’s a trade link for each entry.

Equity profiles at Ally have ratings from multiple analysts. CFRA is the only source of reports. Data from past performance, like earnings histories and financial statements, are presented in numerical and graphical formats.

Stock profiles on E*Trade’s site also display financial data in graphical and numerical formats. But E*Trade’s software provides customization tools, which Ally’s site doesn’t have.

Profiles at E*Trade offer pdf reports from more than one analyst. For McDonald’s, we found 7 reports. E*Trade also presents blogger sentiment scores and price analysis from Trefis.

E*Trade’s stock screener is easier to use, but results don’t have buy and sell buttons.

Winner: E*Trade


5th Category: Websites


After you locate the asset you want to trade, it’s time to find an order ticket. In the 21st century, this will of course be digital and not paper. Ally Invest’s website has a trade bar that can submit orders for stocks, funds, and options. A browser platform called LIVE delivers full-screen charting and an order form with 5 trade types.


Ally vs Etrade


E*Trade’s site doesn’t have a trade bar. But it does have Power E*Trade, an advanced web-based platform with sophisticated charting and 12 order types. Moreover, the software has Level II data and time & sales information, neither of which appears on Ally Invest’s platform.


Etrade vs Ally Invest


Winner: E*Trade


6th Category: Desktop Software


If you don’t want to trade within a web browser, you could instead download and install a desktop program. Ally Invest customers who place at least 10 trades per month can use Quotestream, while E*Trade customers who have at least $1,000 in assets can use E*Trade Pro. The latter software is easier to use and has more features, including live streaming of CNBC and direct-access routing.


Etrade versus Ally Invest


Forex traders at Ally Invest get to choose from among two programs for currency trading. At E*Trade, futures are traded on the Power platform.


Ally Invest or Etrade


Winner: E*Trade


7th Category: Mobile Apps


The Ally Invest app is the same platform that Ally Bank customers use. This means brokerage customers get Zelle transfers and mobile check deposit. E*Trade’s app has mobile check deposit, but not Zelle transfers. But the E*Trade platform offers the ability to submit mutual fund orders; Ally Invest’s platform doesn’t.


Ally Invest versus Etrade


And E*Trade has a second app that is modeled after the Power software. This second app delivers very advanced charting (with lots of technical studies) and order tools. Plus, it also has Level II data, which Ally Invest doesn’t offer.

Another feature we really like on E*Trade’s app is live streaming of Bloomberg Business News. Ally’s app doesn’t offer any video news.


Power Etrade


As with the previous category, Ally’s forex traders use a discrete app. Futures traders at E*Trade use the Power app.

Winner: E*Trade


8th Category: Options


Both firms offer options trading. Although E*Trade’s default per-contract fee is 65¢, active traders pay only 50¢, which is Ally’s rate.

As for tools, we found the lion’s share at E*Trade. The brokerage firm has an options income backtester, a derivative analyzer, an income finder, a strategy optimizer, and a probability calculator. And all that is just the website. Power has integrated spreads, and Pro has very good profit-loss diagrams.

Ally also has profit-loss diagrams, although we prefer E*Trade’s interface. LIVE has a strategy workbench, chains, and a probability calculator. The broker’s mobile app has Greek values and a build-your-own tool.

Winner: E*Trade


9th Category: Cash Management


Although Ally is largely known for its banking arm, E*Trade also has an FDIC-insured bank. So which one has the better cash management tools?

Ally Invest requires $100,000 in assets to add a debit card or checks to an existing brokerage account (no kidding!). Then, the broker charges a $35 yearly fee for its debit card and $20 for checkwriting privileges.

The best way to circumvent these rather unsavory policies is to open an Ally Bank deposit account and link it to a brokerage account. The company’s money market deposit account offers free checkwriting and ATM fee rebates (up to $10 per month).

E*Trade customers can’t attach banking tools to an existing investment account. But they can link E*Trade Bank accounts to investing accounts. One checking account option provides unlimited ATM fee reimbursements but requires a $5,000 balance to avoid a $15 monthly fee.

Ally Bank’s accounts have no monthly fees, and its savings account pays ten times as much interest as E*Trade’s.

Winner: Ally Bank/Ally Invest


10th Category: Other Services


Fractional-share trading: Neither brokerage firm offers whole-dollar investing.

Dividend reinvestment program: You can sign up for no-cost DRIP service at either broker in this competition.

IRAs: Both companies have them (with various fees). E*Trade has more IRA types.

Automatic mutual fund investing: E*Trade clients can sign up for recurring mutual fund purchases. Ally Invest customers cannot.

IPO availability: E*Trade, but not Ally Invest, provides early access to Initial Public Offerings.

Extended hours: Although both brokerage houses offer pre-market and after-hours trading, E*Trade has longer sessions. Plus, E*Trade customers get to trade a small list of exchange-traded funds around the clock.

Winner: E*Trade


Now, Our Recommendations


Small accounts: Either will do for self-directed accounts. For managed accounts, Ally Invest has a smaller minimum ($100 versus $500).

Retirement savers and long-term investors: Only E*Trade has traditional financial-planning services. Combined with brick-and-mortar offices, we would take it over Ally.

Stock/ETF trading: With free access to both E*Trade Pro and Power E*Trade, it’s an easy choice. But if you plan to use margin, Ally is the better priced broker.

Beginners: We would pick Ally Invest.

Mutual funds: Most mutual funds investors want to own are not NTF funds. Since Ally is two times cheaper for these funds we propose it over E*Trade.


Promotion Links


Ally Invest: Up to $3,500 cash bonus + $0 commission trades.

E*Trade: Get zero commission on stock and ETF trades.



Ally Invest vs Etrade - Outcome


This rivalry is pretty close overall. E*Trade is clearly the better firm for stock and options trading, while Ally is the go-to broker for precious metals and forex. Thanks to a huge difference in pricing for mutual funds and margin borrowing, which could mean savings of thousands of dollars over the years, Ally Invest has an edge in this online broker comparison for price conscious investors.