Ally Invest Review (2024)

Our Take

Ally Invest seeks to use technology to provide online banking and investing for clients in a single, easy-to-use platform. The company provides online banking, securities brokerage, investment advisory, mortgage and auto financing, and insurance offerings services to its approximately 11 million customers.

Ally Invest provides several options for investors of all experience levels, including self-directed and managed accounts. Ally has focused more on millennial and women investors in recent years, but its products are also an excellent choice for both new and more active traders because of its competitive rates, robust and intuitive platform, educational support, helpful tools such as screeners, and 24/7 customer support.

We’ve also reviewed the Ally Managed Portfolios robo-advisor service and will take a deeper look at Ally Invest to help you decide whether it is the right fit for your investing needs. Ally Invest was founded in 2005 and is the brokerage side of Ally Bank, headquartered in Detroit. It is a solid choice for traders and investors thanks to its low costs, low minimums, and solid trading platform.

Pros & Cons

Pros Explained

• Easy-to-use, intuitive platforms: The primary website is well-designed and responsive, and has intuitive menus. The primary website provides the most access to screeners, trading products, and education. Investors with funded accounts are able to automatically view real-time quotes and an updated portfolio value based on current market prices. The app, however, only provides streaming stock quotes, updating prices every three to five seconds rather than presenting them in real time. Despite the different platforms, Ally Invest is easy to navigate overall.
• Low costs and fees: Ally Bank is competitive with commissions, fees, and minimums. There is no commission for stock, ETF, mutual fund, or foreign exchange trading, and options trading costs of $0.50 per contract are lower than most brokers. There is no minimum for self-directed investment accounts, and only a $100 minimum for most robo-managed accounts, which are charged a 0.30% annual fee. Margin rates and commissions for bonds and low-cost stocks (OTC/pink sheet stocks trading for less than $2) are also competitive.
• Financial consolidation available: Ally Invest platforms for self-directed and managed accounts integrate well with other Ally products, such as Ally’s online banking, credit cards, CDs, and home and auto loan offerings. This provides Ally customers with an easy-to-see snapshot of their overall financial condition and their various financial products in one place.
• Ability to earn interest on cash balance: Ally Bank pays a comparatively high interest rate of up to 4.20% on cash. Balances can be transferred between Ally's investment and bank accounts daily.Investors can also earn extra interest with Ally’s “boosters,” meaning investors can set up recurring transfers, use “roundups” on purchases to transfer extra money to savings, or even have unused cash in a linked checking account move automatically to the high-yield savings account.

Cons Explained

• App does not support all available trading products: While the website, streaming, and mobile app platforms work well, there are some inconsistencies between them. Only eligible stocks and funds are available for self-directed trading on the mobile app, while website users have access to stocks, ETFs, options, bonds, mutual funds, options, and margin accounts.
• Contingent and other orders are not supported: Ally Invest does not support trailing stops or contingent orders, such as attaching profit-taking and stop-loss levels to an initial limit order. This causes the trader to have to create a new order to set up stop-loss/profit-taking levels after a purchase order has been filled, and manually cancel one of these orders when the profit loss or stop is activated. Many traders like using trailing stops and contingent orders because they are very useful tools, so Ally Invest is behind other online brokers on this.
• No cryptocurrency, futures, or forex trading: Ally Invest does not support spot cryptocurrency spot, futures, or forex trading. It does, however, offer indirect crypto exposure via spot Bitcoin ETFs and crypto stocks.

Usability

Ally Invest platforms work well, even though the technology is a bit dated and there may be more than one screen/platform required to accomplish some tasks. The initial website logo always brings you to the primary Ally home screen, which shows all related accounts across the Ally platform. You then click on the individual investment account to move to the Ally Invest home web page for that account; you can toggle between managed and self-directed brokerage accounts from the Ally Invest page.

The top of the Ally Invest homepage also has a link to launch the Ally Invest Live platform, which has streaming quotes and more modern website functionality. The primary website, even if a bit dated, still works well, is responsive, and shows at least two levels of submenus for the topic chosen. There were, however, a few times when the top menu bar disappeared during our testing; although hitting the Ally logo on the top of the page brings you back to the account summary page, losing the primary menu was disorienting.

The Live platform has user customization options for the look and feel. As mentioned, the mobile app and Ally Invest Live are streaming and have a more modern and robust design. However, neither of these platforms has all of the functionality features in the primary website. Only the ETF screener is available on the Live platform, and none of the screeners are on the mobile app. Likewise, options trading and analysis tools for probabilities, profitability graphing, and pricing, as well as legacy tools from the TradeKing platform, are not available on Live or the mobile app. The charting is also better on the Live platform than on the website or mobile platforms.

In our testing, it was very easy to bring up trading windows, news, charts, and so on for securities listed on a watch list or a result from one of the screeners. Speaking of watch lists, this feature remains consistent across the website and streaming platforms, which active traders will appreciate.

Trade Experience

The trading experience on Ally Invest is sufficient for most traders, but it has basic functionality for orders, with none of the platforms allowing you to enter contingent orders for stop losses and/or take profits, and no support for trailing stops either. Since you can’t sell a security short in a cash account, you must wait for a fill on a buy order before you can put in a stop. Newer platforms typically support these types of contingent orders.

Strong menus make it easy to navigate to trading in different types of securities, and you can select a strategy for options, such as a bull spread or straddle, including four-leg strategies, and then work on the other trade components. There is no order routing or automated trading available on Ally Invest. It also can't create customized orders using criteria other than price (limit orders), such as volume or percentage moves. While you can open an order ticket from a chart page, it simply opens a ticket order with the symbol pre-populated, with nothing dynamic about the charting such as showing current orders on the chart or even drawing tools. The options analysis tools are on the Ally Invest website, but not on the Ally Invest Live platform, which is a bit awkward even though it has helpful tools. Open orders and order status are in line with other online brokerage platforms.

Mobile Trade Experience

Ally Invest’s mobile app works well but has less overall functionality. Only trading in stocks, ETFs, and options is available on the mobile app; fixed-income and mutual fund trades need to be done on the website. The functionality includes the ability to see recent activity and transfer assets between Ally platform accounts, such as between the Ally Invest account and an interest-bearing Ally Bank savings account. There are also key menu items at the bottom of the app screen for account holdings, trading, orders, research, and watchlists.

The trading area allows the investor to choose between stocks/ETFs and options. When you select a security from the watchlist or enter a symbol on the trading screen, you are asked if you want to place a stock trade or an options trade, and the appropriate menu comes up to enter buy or sell, order type, levels, and so on. With options, you select an option strategy and are then prompted to select the strikes desired; these strikes can also be changed easily. After the required data is entered, the order entry screen continues through an order review and confirmation process.

The mobile app also has a research page with news headlines, recent quotes, major market indices and their performance for the current day, and a list of NYSE market movers. There are no screeners available on the mobile app, but selecting a security brings up helpful fundamental information, technical data, and news for that security. The mobile app will likely meet the needs of traders who know what they want to trade. Research for finding investment ideas will likely take place on the website using all the screeners and other tools.

Range of Offerings

Ally Invest provides trading in U.S.-listed equities, exchange-traded funds (ETFs), options, mutual funds, and fixed-income products including U.S. Treasuries; CDs; and corporate, municipal, and agency bonds. Ally Invest also provides foreign exchange trading in more than 50 currency pairs via a dedicated platform, but it does not offer futures, spot cryptocurrencies, fractional share trading, or international securities listed outside U.S.-based exchanges.

Investors using Ally Invest can trade the following:

• Stocks
• ETFs
• Options
• Bonds
• Mutual funds
• Crypto-specific funds and stocks (indirect investment exposure)

Order Types

The basic order types—market, limit, stop, and stop-limit—are available on all platforms, with the website also offering market on close. Neither the website nor the mobile app supports combining order types to create contingent orders, such as adding stops and/or profit-taking levels when entering a limit order. Trailing stops are not currently available on Ally Invest’s platforms, either. Options orders are available for four-leg options strategies on all the trading platforms. When selling, there is a dropdown list available in the symbol field showing current holdings.

Trading Technology

Trading technology at Ally Invest is perfectly functional, but the website is somewhat dated and would benefit from the addition of features such as conditional orders and trailing stops. The platform supports four-leg options strategies and provides streaming quotes to supply its traders with the most up-to-date quotes when trading. Order entry was basic, and there was no integration of positions or orders into charts. Moreover, there is no order automation or control over order routing at Ally Invest.

The primary Ally Invest website serves as the link to Ally Bank, which most would utilize to gain interest on cash balances, and Ally Bank offers some of the best short-term rates available. Options trading is different on the different platforms, too, with the Ally Invest website required to use all the tools.

This includes the ability to see probabilities for a market staying in or moving outside of a user-defined range and date, as well as profitability graphs for different dates to see the price graph of the option compared to the profit graph at maturity. While not best-of-class, these tools are helpful and are not commonly offered by online brokerage platforms.

Costs

Trading costs at Ally Invest are competitive and include zero-commission trading for stocks and ETFs. Options trades are a flat $0.50 per contract.

• Stocks and ETFs: Commission-free
• OTC stocks (and stocks priced less than $2.00): $4.95 plus $0.01 per share; maximum commission per order not to exceed 5% of the trade value; minimum order purchase of $100
• Options: $0 commission + $0.50 per contract
• Mutual funds: Load and no-load funds available
• Fixed income: $1 per bond, with a $10 minimum and $250 maximum per transaction
• CDs: $24.95 per transaction
• Cash-enhanced robo-managed accounts: Minimum investment of $100, no advisory fee,30% allocated to cash
• Market-focused robo-managed accounts: Minimum investment of $100, 0.30% annual advisory fee, 2% held in cash
• Margin rates by breakpoint: Account size under $25,000, 13.00%; $25,000, 12.75%; $50,000, 12.00%; $100,000, 10.75%; $250,000, 9.75%; $500,000, 9.25%; $1 million and up, 8.50%
• Account closing: None (besides ACAT Fee)
• Transfer an account out: $50
• Phone-assisted orders: $20 + regular commission
  

How This Broker Makes Money From You and for You

Ally Invest offers no-commission stock and ETF trading. With fewer brokerages charging commissions these days, it's less obvious how they make money. Like some online brokers offering commission-free trading, Ally Invest receives payment for order flow. The brokerage also lacks fractional shares and any kind of portfolio margin. Ally Invest accounts can be linked with an Ally Bank account that allows investors to gain interest on cash balances. Here are some of the ways Ally Invest makes money for and from you:

• Price improvement: While Ally Invest customers can only route their orders by placing them through a live broker, Ally’s average net price improvement is $0.0069 per share for all SEC Rule 605 eligible marketable orders. On options, the net price improvement is $0.07 per contract.
• Payment for order flow: Ally Invest receives payment for order flow. Equity trades bring Ally Invest an average of $0.00225 per share, while the average order flow payment on option orders is $0.48 per contract. This puts it at the lower end of the average for brokers who receive PFOF.
• Interest on cash balances: Ally Invest offers competitive interest rates (currently 4.20%) on cash balances transferred by the client from the investment account to a linked Ally Bank account.
• Securities lending: Customers can make additional money at Ally Invest by offering shares held in an account for securities lending, but customers can’t choose specific stocks for lending.

Account and Research Amenities

Ally Invest provides many helpful tools and amenities for its customers.

Stock Screener

Ally Invest has a stock screener available on both the desktop and mobile account dashboards. The screener works well and provides many criteria users might want, including fundamentals, sectors, exchanges, price performance, and valuation. There is also fundamental information such as accounting ratios, earnings per share (EPS), dividends, and consensus analyst ratings from FactSet. The stock screener also has technical information that includes some specific patterns.

There are convenient buy and sell links next to each result. A nice feature of the screener is how it shows matches across each of the criteria selected, not just a final number of matches for the entire search. This allows you to see where adjustments might show more or less information for a successful search. There are also six predefined stock screens available: stable dividend, small-cap value, mid to mega-cap value, small-cap growth, mid to mega-cap growth, and top growth tech stocks.

ETF and Mutual Fund Screener

Ally also has ETF screeners available for both desktop and mobile investors. The stock screener’s basic functionality is utilized for both the mutual fund and ETF screeners on the primary website, with some adjustments as appropriate for the different asset types. For example, the mutual fund screener includes the total expense ratio as part of the criteria.

The ETF and mutual fund screeners both have criteria for profile, performance, risk analysis, and portfolio. The risk analysis, which is not available on the stock screener, includes both beta and R-squared vs. the S&P 500, standard deviation, and the Sharpe Ratio. Unfortunately, no predefined screens were available for ETFs or mutual funds during our testing. It was also difficult to see which ETFs among those with similar objectives are more actively traded, so a search for a leveraged inverse equity ETF returned multiple results that required checking volume manually on each.

Options Screener

At this time, the Ally Invest platform does not offer the ability to screen for opportunities in options.

Fixed Income Screener

On the standard website, you can scan for bonds by clicking on "Trading" and then on "Fixed Income." Each bond type has a query definition page where you define the search, a query result page that lists the bonds that match your query definition, and a bond detail page where you can get more information about a bond on the list. This is a fairly basic screener, with few criteria from which to choose.

Charting

Ally Invest offers streaming charts for desktop and mobile users. Investors can choose from a variety of charting options, including:

• 8 chart types (including candle, bar, mountain, line, hollow candle, volume candle, and baseline)
• Over 100 chart studies
• Several drawing tools to help investors analyze the performance of stocks, ETFs, and indexes

Tools and Calculators

Ally Invest does not offer a wide range of tools and calculators, such as a profit/loss calculator. There are helpful calculators related to options trading available on the primary website, including a probability calculator to show the likelihood of prices being inside or outside of a user-defined range using historical or implied volatility, and an options tool showing profitability graphs that can be adjusted to see how a strategy might perform over time based on user input for timing, strikes, and options strategy.

Trading Idea Generator

While Ally Invest does not offer a specific trading ideas generator, the company does offer clients a very unique feature for rating stocks: Smart Score. Investors can view the “Smart Score” of a stock to help determine if the stock is likely to be a good investment or not. TipRanks’ Smart Score takes eight data points, analyzes them, and comes up with a number ranging from 1 to 10, with 10 indicating a stock that is predicted to outperform the market. While advanced investors may appreciate the additional analysis, even novice investors can utilize this easy-to-understand data to make better investing selections.

News

Ally Invest makes basic news headline and fundamental information available when a specific security on the platform is selected. This offering is generic and lacks filtering or search functionality, but is still likely to be sufficient for most investors. Additional helpful market information in this section includes market overviews and an events calendar showing macroeconomic releases, expected earnings, and dividend announcements.

Third-Party Research

Ally Invest does not offer any proprietary research at this time and relies solely on third-party research from TipRanks, Morningstar, and CFRA.

Fractional Dividend Reinvestment Program (DRIP)

Ally Invest has a dividend reinvestment program. There is an account-wide default on dividend investment, but you can also specify this at the time of the trade via phone or live help. Any amounts unable to purchase a full share will result in fractional shares rather than idle cash being returned to your account.

Cash Management

Ally Invest allows account owners to transfer uninvested cash from their investment account into a deposit account at Ally Bank so it can earn interest. Ally has made cash management a seamless process. Investors can choose to manually move cash or set up recurring transfers. Ally Bank offers some of the most competitive rates on cash deposits at 4.20%. There are three ways that Ally clients can boost their cash earnings with a high yield rate:

• Recurring transfers: Set up recurring transfers so you don’t have to worry about manually transferring cash.
• Round-ups: Ally tracks your spending accounts for transactions that can be rounded up to the nearest dollar. When you accrue at least $5 in round-ups, it will be transferred to your savingsaccount.
• Surprise savings: Ally can also analyze your linked checking accounts for “safe-to-save” money, and then automatically transfer it to your savings account.

SRI/ESG Research Amenities

Ally Invest cannot screen for socially responsible investing (SRI) or environmental, social, and corporate governance (ESG) criteria. While SRI/ESG investing is currently unavailable for self-directed accounts and there are no tools for this, SRI/ESG investing is available as a choice for managed accounts.

Portfolio Analysis

Ally Invest provides the basics for analyzing a portfolio. Ally Invest uses Maxit Tax Manager, which is a third-party service, to allow investors to run different scenarios to see the potential tax implications on their investments. This service is also helpful for breaking out the portfolio positions held into lots, making it easy to see the date purchased, number of shares, and price per share.

The managed portfolio offering has a well-designed asset allocation display, but that feature does not extend to the self-directed investing account. For more on Ally Invest’s robo-advisory, which manages the portfolio in conjunction with investment professionals, check out our review of that specific feature.

Education

The education section has an intuitive drop-down menu providing options for learning by security type (stocks, options, bonds, mutual funds, ETFs, forex), experience level (rookies, veterans, all-stars), and market outlook (bullish, bearish, neutral, volatile). Unfortunately, these logical menus did not correspond to the content during our testing. Instead, virtually all of the links from this drop-down menu took the user to Ally’s community page.

There was plenty of helpful content on these pages, such as how to start investing in three simple steps and how to become a better investor, but the information was not organized well. Different pieces of content were listed based on when each one was created. The content is solid and geared more toward newer investors and traders, but it was not as specialized or as deep as the menu selections had indicated.

Ally Invest’s community page also has content areas for life, money, car, home, bank, investments, trends, and so on. This community page can be customized by the user under each of these content areas. Under money, for example, options are available to include or filter out topics including budget, credit, estate planning, finance basics, savings, and taxes. There are also blogs, market updates, and the ability to connect with other Ally Invest traders.

Customer Service (for Investment Services)

• Phone line available 24/7
• Average hold time of 30 seconds
• Live chat available
• Assistance can be provided via social media
• Only U.S. residents can open accounts

Security and Reliability

• Ally Invest offers two-factor authentication for its platforms, and biometric login is available on the mobile platform.
• Securities Investor Protection Corporation (SIPC) insurance on accounts is bolstered by a Lloyds of London policy purchased by Ally’s clearing firm, which provides Ally’s customers with coverage of $150 million for securities and cash if the SIPC lines are exhausted.
• Ally Invest has not had any data breaches in the past four years.
• Ally Invest did experience notable outages in 2021 around the GameStop frenzy—something that affected many brokerages. No outages have been reported since then.

Transparency

Ally Invest clearly lists its commissions, fees, and non-existent or extremely low minimums on its website. Ally Invest’s competitive rates and fees are a key aspect of its marketing efforts. There is an overview of margin trading when navigating to margin rates from the “Client Services'' tab at the top of the page, and another page answering questions on margin trading. There is also an extensive disclosures page that includes content from FINRA.

Available Account Types

Ally Invest provides all the commonly used account types, including:

• Individual and joint taxable
• Custodial
• Traditional and Roth individual retirement accounts (IRAs)
• Coverdell education savings accounts (ESAs)

Ally Invest has also launched Ally Invest Personal Advice, which is an advisory account for people with over $100,000. It has an advisory fee capped at 0.85% of assets under management.

The Bottom Line

Ally Invest is a solid choice because it has well-functioning and intuitive investment and trading platforms as well as very competitive commissions, fees, and margin rates while providing plenty of support for investors to choose investments through various screeners and options analysis tools. No commissions, low account minimums, and high-yield cash accounts, along with Ally Invest’s wide array of banking and investing products, offer both novice and sophisticated investors an appealing, all-in-one platform to view and manage their finances.

While the website is a bit dated and there are some inconveniences and inconsistencies between the different platforms, recent improvements to the main menu, enhanced mutual fund order flow, updated support functionality, and a redesigned mobile app show that the company is dedicated to building a better customer experience. Further, with Ally’s recent appointment of Michael Rhodes as CEO, the company is showing its commitment to continuing to improve the company’s offerings and technology within the industry.

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