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Ally Invest Bonds Trading Fees


2019 Ally Invest bonds trading review: pricing, government Treasury, junk bonds, corporate, muni. Ally Invest fixed income securities fees.



Overview of Fixed-Income Securities at Ally Invest


If you want to buy corporate bonds, U.S. Treasuries, or other fixed-income products, Ally Invest has a good selection with a wide range of user-friendly search tools. Here’s how to get started:


Learning About Bonds


If you’re new to the world of fixed-income investments, it may be best to start with some education—or review, if it’s been a while. Ally Invest offers a small selection of articles on trading bonds. To find this area on the broker’s website, navigate to “Education” in the top menu and select “Learn by Security Type.” Under the sub-menu, you can select bonds.

We found articles on municipal, corporate, and Treasury bonds. There are articles on bond basics for very new investors. An article on CD ladders also has a video explaining how to build one.


Bond Research Tools on the Ally Invest Site


When you understand the basics of fixed-income products, it’s time to start looking for specific securities to trade. Ally has moved its bond search tools from the website to its browser platform Ally Invest LIVE. There is a link to this platform at the very top of the screen after you log in. Clicking on it will produce a new tab within your browser.

To locate the bond resources, click on “Trading” in the top menu and then select “Fixed Income” in the drop-down list. Here, you’ll see several options. One of these is a yield grid. This tool displays yields for different securities, such as agency bonds, munis, corporate, and CD’s. These are displayed in a column. Some of them include bond ratings, such as AA or BBB. The top row shows the various maturities that are available, from less than a year to more than 20 years.


Ally Invest Bond Trading


Clicking on one of the yields will produce a long list of bonds with the maturity and bond type and rating (muni A, corporate BB, etc.) that the yield corresponds to. On this page, there are a lot of very important data points. We found the coupon, which determines how much money you’ll get from the bond periodically. Also, the current market price of the bond is shown (in 100’s, although the actual face value of the bond is typically $1,000). Yield-to-worse and yield-to-maturity are displayed, which are of course very important.

The number of bonds that is available is shown, along with the minimum that must be purchased in a single trade.

Hovering over a bond’s name produces more info. The payment frequency is shown here, along with call schedule and tax status. One bond we found in our search was in default, something that should catch any investor’s attention right away.

Municipal securities have a link to EMMA, a service of the Municipal Securities Rulemaking Board. On this site, we were able to find recent trades of the bond in question. Trade amounts are shown here, with high and low prices, high and low yields, and the total number of bonds in each trade.

If you want Treasury rates, just click on the link beneath the yield grid. For some reason, the yields weren’t hyperlinked during our research. The same goes for munis, corporate, and CD rates. Fortunately, there are more tools.


Ally Invest Bonds


Using the Bond Screeners


Underneath the rates is a row of blue icons with bond categories, such as Treasury, STRIPS & Zeros, Agency, and so forth. Clicking on one of them produces a bond screener for that category.

The screener for U.S. government debt can look for T-bills, TIPS, notes, and bonds. Results can be sorted by maturity, the number of results can be specified, coupon frequency can be selected, maturities can be set, and there are other specifications that can be entered.


Bond Tools


On the fixed-income page on the LIVE platform, there’s a “Tools” tab in the top menu. Here you’ll find several great features. These include a calculator, a bond ladder, a list of active bonds, and news & briefings.

The calculator is able to determine yield to maturity and yield to worst after you enter a few data points. It’s best to start with a specific CUSIP number so that required fields will be automatically populated. You can find this number in the bond search results.


Bond Example


During our investigation, we found a bond from Dow Chemical. It distributes cash semi-annually (May and November) with a coupon of 5.55%. It currently is selling above face value, which means the yield will be lower than this figure. It matures in 2048, so it has almost 30 years of life in it. The call schedule shows the bond cannot be called until the maturity date. Despite Dow’s long history as a company, the bond’s rating is only BBB+, which is at the lower end of the investment-grade spectrum.


Placing a Trade


If you find a bond that you like, it’s time to submit an order. You can access Ally’s fixed-income order ticket by clicking on the buy button in the far-right column in the search results, or you can click on the name of the bond. In either case, you’ll get the same form.

The minimum purchase amount for the Dow bond is 10 securities, so an order will cost around $10,700 (remember, the bonds are selling above face value). On Ally’s trade ticket, the default order quantity is 100. If you don’t want to buy 100 bonds, you’ll need to adjust this amount; although the number can’t be below the minimum number.

A “Calculate” button appears at the lower left. Be sure to use this after you enter the quantity you want to buy and before you send the order. It will give you an estimated order total with accrued interest.


Cost of Fixed-Income Trades at Ally Invest


Ally Invest charges $1 per bond with a $10 minimum and no maximum per order. According to a chat with customer service, Treasuries have the same pricing as other bonds, which is rare in the brokerage world.


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Ally Invest Bonds Trading reviewed by Brokerage-Review.com. Rating: 4.5