Ally Invest

Ally Invest Cash Sweep Options. Ally Money Market Fund, Brokerage Account Interest Rates.


Ally Invest uninvested cash sweep account options (FDIC bank, money market fund). Ally brokerage\IRA account interest rates, insurance, and fees.



Ally Invest Cash Sweep Account Options


Free cash balances at Ally Invest are protected by SIPC and earn no interest. This is the default option for cash deposits with the broker. There is a $250,000 limit on the insurance that covers these balances. The broker allows checks and a debit card to be added to a trading account, but requires a staggering $100,000—in cash—to acquire these cash management tools.

There is also an FDIC-insured sweep program available to Ally Invest customers. The broker requires a very steep $200,000 in uninvested cash to apply for it, though. Even worse, this cash option only earns 1 basis point in interest right now. Only non-retirement accounts can sign up for this option.

Ally moves free cash balances to participating banks where they are protected by the government up to $250,000. A paper form must be filled out and sent to the brokerage firm in order to participate in the service.


Ally Invest Money Market Fund Rates


A money market mutual fund cannot be used as an account’s core position at Ally. The broker does, however, offer 156 money market mutual funds for purchase as a regular holding. Funds without a load at Ally cost $9.95 to buy and sell, while load funds are always free to trade.


Other Ally Invest Cash Sweep Options


Perhaps the best way to handle cash with an Ally Invest account is to open an Ally Bank account, which will automatically be linked to your Ally brokerage account. Ally does require the bank account to be added to the securities account before funds can be transferred between the two. And transfers must be initiated on the brokerage side.

Although Ally Invest’s cash management features aren’t very appealing, Ally’s deposit accounts have some pretty attractive features. Checks and a debit card are free of charge. And the company reimburses ATM fees incurred in the U.S. There is a $10 maximum per month on this policy. A way around this rule is simply to use Allpoint cash machines, which don’t charge Ally customers any fees.

Ally’s savings account currently earns 1.05%, while its money market deposit account yields 85 basis points. Either account can have a debit card attached at no cost. The money market account can have checks added as well. If you need more than 6 withdrawals per month, Ally offers a checking account, which pays 10 to 60 basis points, depending on account balance.

These linked bank accounts come with their own 24/7 customer service. Ally doesn’t charge any monthly fees for them, and it’s possible to send other people funds using Popmoney.

Summary


Compared to other brokers, Ally Invest doesn’t bring a lot to the table for cash management. Other brokers, like Fidelity, do allow a money market fund to act as a brokerage account’s core position, for example. Schwab currently pays 0.15% on its FDIC-insured brokerage balances, 15 times what Ally pays. But Ally’s deposit accounts are more lucrative than Schwab’s or Fidelity's and linking them is easy.


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TradeKing is Now Ally Invest


TradeKing was acquired by Ally Bank and it is now called Ally Invest. For the newest version of this broker comparison go to Ally Invest versus ETRADE article.


Introduction


Investors considering either E*Trade or Ally Invest should be aware that the two firms differ widely in terms of service and investment offerings. E*Trade is much more advertised, while Ally Invest tries to keep prices low. The following comparison will reveal which is better - Ally Invest or E*Trade?


The Cost of Trading


E*Trade imposes a $6.95 charge for equity trades, while Ally Invest customers pay only $4.95 for trading the same product. Options at E*Trade are an additional $0.75 per contract. Ally Invest is lower at $0.65.

Traders can use a live representative at either firm to buy and sell securities over the phone. Doing so at Ally Invest incurs a $24.95 commission. E*Trade charges $25.

An E*Trade brokerage account comes with no fees. Ally Invest, by comparison, does impose an account inactivity fee, which is $50 annually. A trading account that (1) has 0 trades in the trailing twelve months, and (2) has less than $2,500 in total deposits with the broker will incur the fee.

There is a $500 minimum to open a securities account at E*Trade. There is no minimum deposit requirement at Ally Invest. Investors who wish to buy and sell with borrowed funds can open a margin account with either broker. A debit under $5,000 at Ally Invest currently is 9%. E*Trade clients pay 8.69%.

Ally Invest wins this category due to its lower commissions.


Investing in Funds


At Ally Invest, investors can buy and sell 8,532 mutual funds. Funds with loads incur no transaction fee. On the other hand, no-load funds do have a $9.95 charge. This fee is applicable to both the sell and buy sides.

Unlike Ally Invest, E*Trade clients have access to mutual funds that have neither load nor transaction fee. There are more than 1,300 of these funds with the broker. In total, the firm provides over 8,000 mutual funds. Mutual funds with a transaction fee are $19.99, which is applied to purchases and sales.

Ally Invest has much lower commissions on popular, top performing mutual funds while Etrade provides some commission free funds. Pretty even here.


Customer Service


Ally Invest clients can find a representative Monday through Friday anytime from 8 am to 6 pm, EST. Chat and phone service are available during these hours. Unfortunately, the broker isn't available on the weekend. Customers can also reach the broker by snail mail, e-mail, and fax.

Unlike Ally Invest, E*Trade operates a chain of branch locations throughout the U.S. Currently, the broker has 30 offices in 17 states. For clients who prefer phone service, the company is available 24 hours a day, 7 days a week. Alternatively, E*Trade can be contacted by e-mail, fax, or on-line chat.

This category is a tie.


Trading Tools


Ally Invest offers its customers the website, Ally Invest LIVE, and Quotestream. All three provide many important tools, such as option chains, a watch list, account information, and market indices. Ally Invest LIVE has a requirement of at least 1 trade every 12 months, or an account balance of $2,500 or more. Quotestream requires at least 10 trades every month.

E*Trade also provides trading on its website in addition to an advanced platform called E*Trade Pro. The website can be used to place orders for all securities. The platform has more advanced tools, including professional-grade options search and live streaming of CNBC. The platform comes with a requirement of at least 30 stock or options trades every quarter. Otherwise, an account must have a balance of $250,000 or greater to gain access to the software.

Overall, it's pretty even here.


Mobile Trading


E*Trade customers can buy and sell on iPad, iPhone, Apple Watch, Windows phone, Kindle Fire HD, Amazon Fire phone, and Android phone and tablet. The broker's app has stock charts, order entry, mobile check deposit, and bill pay. There is also a library of CNBC videos. Live streaming can be accessed by frequent traders.

Apple, Android, and mobile web trading are available at Ally Invest. Fundamental stock data allows for basic security research on the app. Unfortunately, the Ally Invest app lacks several features the E*Trade app has, such as mobile check deposit and CNBC materials.

E*Trade wins here.

Cash Management Features


Ally Invest customers can add checks and a debit card to a trading account. Disappointingly, the account is required to have a balance of at least $10,000. Moreover, the broker charges $50 per year for check writing and $2 per ATM transaction.

E*Trade offers a separate checking account, which comes with a debit card and checks. There is no minimum balance requirement, although customers who want ATM fee rebates must have at least $5,000 on deposit.

E*Trade gets this category.


Etrade vs Ally Invest: Results


Etrade won 2 times, Ally Invest was successful in 1 category, and there were 3 ties. Pretty evenly matched brokers.

Ally Invest is one of the best brokers for beginners, offering no surcharge on trades made with a broker help, providing engaging and useful online investor community, where members can ask questions, learn from more experienced users and even get investment tips.

Thanks to a huge difference in pricing on stocks, ETFs and mutual funds, which means savings of thousands of dollars over the years, Ally Invest has an edge in this online broker comparison. Etrade, however, is a great choice for bond investing and long term investors.


Updated on 9/29/2017.




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