Ally Invest Review 2023: Pros, Cons & Features
- Balances of all sizes
- Commission-free ETFs
- Excellent customer service
Ally Invest offers a myriad of investing options, from more active trading to handing your cash off to their robo-advisor. It prides itself on offering low to no fees, commission-free ETFs, and robust trading tools.
With their Robo Portfolios offering (that’s Ally Invest’s robo-advisor product), it’s a great overall company to invest with.
What Is Ally Invest and How Does it Work?
Ally Invest is the brokerage arm of Ally Bank and stands out in its offerings due to its low investing minimum amounts, low fees, and a decent trading platform. This brokerage offers something for most investors, whether you’re looking to DIY your investment strategy or use Ally’s robo-advisor offering.
Most stocks and ETFs have no commission fees, and options trades are $0.50 per contract. When opening an account, you’ll find that even if there is a minimum opening balance, it’s much lower compared to other brokerages — their robo-advisor, for instance, only requires $100 to get started.
More advanced traders will be able to log into their accounts and use tools many other brokerages offer, but you’ll find there are specialized options analysis tools.
- No commissions for self-directed trading
- Robo Portfolio option with no advisory fees
- Transfer cash between Ally Bank and Ally Invest
Ally Invest at a Glance
Types of Accounts
Variety of calculators
Live Trading Platform
Web-based and mobile
Ally Forex brokerage app
Commissions and Fees
No advisory fee
Except for market-focused Robo Portfolio
Commissions: $0.50 to $9.95
$0: Self-direct cash trading
$2,000: self-directed margin trading
$100: Robo Portfolios
ETFs, mutuals, Forex, options
Stocks and bonds
Offer four choices of portfolio goals
Two types of portfolio funding
Phone, email, live chat
Features of Ally Invest
Ally Invest has a number of features that make it attractive to those who want to tackle DIY strategies but also for customers looking for hands-off robo-advisors. The following information about the features provides more details.
Types of Accounts
Ally Invest offers a slew of accounts. For taxable accounts, options include individual and joint, as well as custodial and trust taxable accounts. Ally Invest also offers six different types of IRAs, including traditional and Roth accounts.
There are plenty of tools for traders who are looking for more advanced research tools. Ally Invest offers some that are pretty robust, especially for a discount brokerage.
If you’re a technical trader, you can use tools such as a profit and loss calculator and probability calculator. There’s also the Maxit Tax Manager, where you can look at what the potential tax implications are if you make a certain trading decision. Plus it helps you create tax forms on demand.
Even if you’re not that far yet into your investing journey, Ally Invest has an ETF screener which can make it easier for you to find one that’ll fit your investing goals.
As for real-time live streaming quotes, all Ally Iinvest customers get it for free with the Ally Invest LIVE feature, but Level II advanced quotes from Quotestream are only available to those who conducted more than 10 monthly trades.
Live Trading Platform
Investors can take advantage of Ally Invest’s browser-based live trading platform. Features include broker tools, customizable dashboard, quick trading capabilities, and real-time streaming quotes. For those who trade at home or on the go can use this platform without needing to download any programs.
Traders can also use Ally Invest’s mobile apps — Ally Forex which is only for Forex trading or Ally Mobile, for all other types of available trades.
Ally Invest App
Investors won’t have a dedicated app unlike many of its competitors. However, customers have access to the Ally Mobile app in which they can access all of their accounts in one place, including your checking, savings, and credit card accounts.
That means in addition to managing investment accounts, customers can pay bills, deposit checks and conduct other types of banking activities.
As far as investing goes, users can manage their portfolio by performing technical analysis with charting tools, trade stocks, and access market news. Keep in mind though, that the app isn’t as robust as the desktop trading platform.
For those who trade currency, there is Ally Forex, a dedicated app that lets you access weekly reports, chart market trends, enter multiple order types and more. One unique feature of Ally Forex is the option to open a practice account for those who want a bit of experience before venturing into forex by themselves.
Commissions and Fees
Ally Invest doesn’t charge any advisory fees for their cash-enhanced Robo Portfolios, and plenty of commission-free ETF, options, and US stocks.
Ally Invest does charge an advisory fee, however, for their market-focused Robo Portfolio, which holds much less cash as a buffer — 2% of your account value as opposed to 30%. The other fees are competitive, at $0.50 per options contract and $9.95 per transaction for no-load mutual funds. There is also a $1 fee per bond, and a $4.95 fee for stocks priced less than $2.00, plus $0.01 per share bought.
Lastly, Even though it’s lower compared to competitors, you’ll be charged a $50 fee for a full or partial transfer, and a $25 closing fee for closing any IRA, such as by fully transferring it to another firm.
There is a $0 minimum to open an Ally Invest account and a $100 minimum for Ally’s Robo Portfolios. If you choose to open an Ally Invest Margin account, the minimum is $2,000.
Ally Invest offers many securities, including:
- Mutual funds
- Penny stocks
All types of investors will find something that suits their trading goals, whether it’s investing in more passive ETFs, hands-off with a robo-advisor, or more active reading with penny stocks.
Robo Portfolios (formerly called Managed Portfolios) is Ally Invest’s robo-advisor offering. While the portfolio management process is automated, the brokers use human investing experts to create their managed portfolios. Like other robo-advisors, you won’t be able to access a human advisor.
Unlike their self-directed trading where you decide how to allocate your portfolio among various securities offerings, Ally Invest’s Robo Portfolios helps you invest based on goals. As in, they’re specifically designed to be geared towards the reasons you want to invest.
Investors can choose from four types of portfolios:
- Core: This option divides your money across a diversified mix of US, international, and fixed-income assets. Those who have the Core portfolio are probably those who want to be hands-off. Managed Portfolios will tailor your portfolio based on your risk tolerance.
- Income: These portfolios are for those who want to receive higher dividend yield and a lower risk profile at the same time.
- Tax optimized: You’ll be able to be as tax efficient as possible with this portfolio option. Ally Invest invests in low-cost ETFs.
- Socially Responsible: Those interested in putting their money towards that do good will be happy to know these types of portfolios focus on companies that are ESG-friendly. In other words, these companies encompass values that promote environmentally friendliness, sustainability, and energy efficiency.
Ally Invest offers some of the best customer service, with 24/7 access via phone, email, and live chat.
Is Ally Invest Right for You?
Ally Invest offers low pricing, a useful trading platform and tools for novice and advanced traders alike. It’s a great fit for those who don’t have a lot of money to invest — $100 for their Robo Portfolios is one of the lowest minimum requirements we’ve seen. More active investors will love the commission-free trades and low options contract fee.
One big downside is you won’t find tax loss harvesting with Ally Invest’s Robo Portfolios, a major downside if you want to ensure your investments are tax-optimized automatically, However, Ally Invest offers a tax optimized option, which invests in asset classes such as municipal bonds and low-cost ETFs which offer tax advantages. So if you’re investing in other types of managed portfolios, you’re out of luck.
Still, Ally Invest has something for almost everyone. Those looking to invest with a robo-advisor will find the brokerage’s no-frills features appealing, and active traders will appreciate the various research tools. However, if you want futures and fractional shares, you won’t find that here.
Pros and Cons of Ally Invest
Ally Invest may be a good fit depending on what features are important to you. These pros and cons should help you decide.
- Low costs and fees
- Forex trading available, including a practice account
- Ability to consolidate between banking and investing accounts
- Can earn interest on cash balances
- Dividend Reinvestment (DRIP)
- Trading tools not available on all platforms
- No crypto, fractional or futures trading
- Lack of no-transaction-fee mutual funds
- No tax loss harvesting
Frequently Asked Questions (FAQs) About Ally Invest
We’ve rounded up the answers to several common questions about Ally Invest.
Ally Invest offers a variety of research tools for different types of investors, among them:
Stock Screener: Allows investors to look at information such as fundamentals, exchanges, price performance, sectors, and valuation.
ETF and mutual fund screener: Sift through criteria such as each fund's profile, performance, portfolio, Lipper ratings, and risk analysis.
Trading Idea Generator: Use backtesting strategies including quality stock at a reasonable price.
Although Ally Invest doesn't explicitly promote or encourage investors to do day trading on their platform, there are plenty of features that will support this type of investing — the company has a wide range of research and technical analysis tools.
When you trade on margin, you're essentially borrowing money from a brokerage firm to invest in additional securities or other short-term lending needs. The funds you borrow are typically based on the value of securities in your portfolio. You'll need to pay this back with interest, or the margin rate.
Portfolios.This offering invests in companies that are proven to engage in sustainability, energy efficiency, and other types of green initiatives.
Contributor Sarah Li-Cain is a personal finance writer based in Jacksonville, Florida, specializing in real estate, insurance, banking, loans and credit. She is the host of the Buzzsprout and Beyond the Dollar podcasts. Contributor Dennis Lynch contributed to this report.