Ally Invest Review: The Best Low Costs Trading Platform

Ally Invest is Ally Bank’s brokerage. It has low costs, low minimums, and a solid (if a bit dated) trading platform. Zero commission on stocks and ETFs, $0.50 per option contract, and also low minimum balances and account fees. The broker offers fundamental, technical, and other tools like most online brokers, plus specialized options analysis tools like a probability calculator and dynamic profitability graphs. We’ll review Ally Invest to help you decide if it’s right for you.

Ally Invest: Website

Minimum Balance: $0

Cost per stock trade: $0

Cost per options trade: $0.50 per contract

Promotion: Up to $3,000 in cash

Commission-free: All ETFs; $9.95 commission on no-load mutual funds

No-transaction-fee mutual funds: None

Securities: Stocks, ETFs, bonds, mutual funds, options, forex

Customer service: Phone 24/7, chat, email

Account fees: $50 transfer fee, $50 IRA transfer fee, $25 IRA closing fee

Mobile applications: Ally offers the “Ally Mobile” app on the Apple App Store and Google Play Store.

Overview

Ally Invest is a great option for online banking with Ally and existing Ally Bank customers because they can see about the full financial image on one platform. Ally Invest provides self-directed accounts with no minimum balance and managed accounts with a $100 minimum. Broker has focused more on millennial and women investors in recent years, but its products are also good for new and active traders because of competitive rates, a robust and intuitive platform, educational support, helpful tools such as screeners, and good customer support.

Customer Service

• Accounts can only be opened by Americans.
• Social media can be used to provide assistance.
• 30-second hold time standard
• Live chat is offered.
• 24-hour contact number available

Product

Ally Invest trades US-listed equities, ETFs, mutual funds, options, and fixed income products like US Treasuries, CDs, and corporate, municipal, and agency bonds. Ally Invest also offers forex trading in 52 currency pairs via a dedicated platform, but not futures, cryptocurrencies, fractional share trading, or international securities listed outside US-based exchanges. Investors using Ally Invest can trade the following:

• ETFs
• Mutual Funds
• OTCBB
• Stocks long and short
• Fixed Income: US Treasury Securities, corporate, municipals, U.S. agencies, certificates of deposit
• Listed Options
• Foreign Exchange
• Ally Bank Accounts

Pricing

Ally Invest offers competitive trading costs, including zero commission trading for stocks and ETFs. Trades in options cost a fixed $0.50 per contract.

• Stocks and ETFs with no commission
• OTCBB – $4.95 plus $0.01 per share; maximum commission per order not to exceed 5% of the trade value, with the minimum being $4.95 plus $0.01 per share; applicable to stocks priced under $2.00 and OTCBB. For OTCBB and Pink Sheet stocks, there is a $100.00 minimum order purchase requirement.
• Options: $0.50 per contract; additionally, a $0.50 fee is charged to close positions in low-value options.
• Mutual Funds: $9.95 for each trade of no-load mutual funds
• Fixed Income: US Treasury securities are free; otherwise, there is a fee of $1 per $1,000 of bonds, with a minimum transaction fee of $10 and a maximum transaction fee of $250.
• Robo-Managed Accounts require a $100 minimum investment. For Cash-enhanced portfolios that have a 30% cash allocation, there is no management fee; for other algorithm-created portfolios, there is a 0.30% annual management fee.
• Margin rates are determined by the breakpoint and account size: Under $25K 10%, $25K 9.75%, $50K 9%, $100K 7.75%, $250K 6.75%, $500K 6.25%, and $1,000,000+ 5.5%.
• Foreign exchange: Ally receives payment for its FX services through the bid/ask spread, not through commissions.
• No account closure was made (besides ACAT Fee)
• Account Transfer Out: $50
• Live Broker Trading – Ally maintains the right to impose a $20 fee for broker-assisted trades, but Ally assures us that this charge is infrequently imposed.
• Checks: $5 check-sending fee
• No charges for inactivity or maintenance.
• Domestic wire transfers cost $30 to send and are free to receive.
• $50 voluntary reorganization fee

Order Types

All platforms support the standard order types of market, limit, stop, and stop-limit orders, and the website also provides market on close. Combining order types to create contingent orders, such as adding stops and/or profit-taking levels when entering a limit order, is not supported by the website or mobile app. The platforms of Ally Invest do not currently support trailing stops either. All trading platforms support options orders for four-leg options strategies. A dropdown list that lists current holdings is available in the symbol field when selling. Orders placed through the website had the option of being all or none, but neither Ally Invest Live nor the app offered this choice.

Usability

Despite outmoded technology and the need for multiple screens/platforms, Ally Invest’s platforms operate effectively. Initial website login leads to the primary Ally home screen, which displays all connected accounts across the Ally Platform, including bank accounts, auto or home loans, individual accounts, managed accounts, etc. On the Ally Invest page, you can switch between managed and self-directed brokerage accounts.

Ally Invest’s homepage contains a link to Ally Invest Live, which provides streaming quotes and contemporary website functionality. The primary website, despite being outdated, is still functional and has quick page refreshes. The website’s top menus were user-friendly and intuitive, with at least two submenus per subject. Several times, the top menu bar vanished, but clicking the Ally logo brought back to the account summary page.

The Live platform allows for aesthetic customization. The design of the mobile app and Ally Invest Live is contemporary and robust. Neither platform supported all website capabilities. Only the ETF screener is available on Live, and none are available on mobile. Probability, profitability, and pricing trading and analysis tools for options are not available on Live or the mobile app. Live platform charting is superior to website and mobile charting.

This makes a variety of platforms for various things. The menus and navigation, on the other hand, work well. For watch list or screener securities, it was easy to bring up trading windows, news, charts, etc. The watch lists on the website and on the streaming platforms are the same. There is another forex platform. Most currency trading brokerages use a platform that is just for that.

Trade Experience

Ally Invest’s trading platform is sufficient for most traders, but it lacks contingent orders for stop losses and/or take profits and trailing stops. Since you can’t short-sell in a cash account, the trader must wait for a buy order to fill before placing a stop. Modern platforms support contingent orders.

The ability to choose an options strategy, such as a bull spread, straddle, or four-leg strategy, before working on the other trade components makes trading in various securities simple. Order routing and automated trading are absent from Ally Invest. It cannot make limit orders that are customized and based on volume or percentage moves. While it is possible to open an order ticket from a chart page, the symbol is already pre-populated, and there is no dynamic charting—such as displaying current orders or drawing tools—when the order ticket is opened. It was awkward that Ally Invest’s website had tools for options analysis but not Ally Invest Live. Order status and open orders were consistent with other online brokerages.

Security and Transparency

• Ally Invest has two-factor authentication and biometric login for its platforms.
• SIPC (Securities Investor Protection Corporation) insurance on accounts is backed up by a Lloyds of London policy bought by Ally’s clearing firm. This policy covers securities and cash up to $150 million if SIPC lines are used up.
• Since 2014, there have been no data breaches at Ally Invest.
• Ally Invest did have three notable outages in 2021, all of which happened during the GameStop craze, which was a problem for many brokerages. Since then, no outages have been reported.

Ally Invest’s website shows its commissions, fees, and minimums, which are either not there or are very low. Rates and fees that are competitive are a big part of how Ally Invest markets itself. When you go to margin rates from the “Client Services” tab at the top of the page, you can see an overview of margin trading. There is also a page that answers questions about margin trading. There is also a long page of disclosures with information from FINRA.

News

Ally Invest provides headline news from MT Newswires and news and fundamentals when a security is selected. This generic offering lacks filtering or search but should be sufficient for most investors. This section includes market overviews and a calendar of macroeconomic releases, expected earnings, and dividend announcements.

Ally’s website has intuitive menus, which made it easy to find this type of content. There is a “News” page under the “Quotes and Research” option on the top menu line. The “Markets” tab had sub-options for “US Markets,” “Global Markets,” “News,” “Events & Calendars,” “Commodities,” “Rates,” and “Sectors & Industries.”

Ally Invest Live is similar but organized differently. The mobile app has general news and stock news, but no events calendars. Seeking Alpha provides Ally Blog headlines.

Education

The Education section has a drop-down menu for security type (stocks, options, bonds, mutual funds, ETFs, forex), experience level (rookies, veterans, all-stars), and market outlook (bullish, bearish, neutral, volatile). These logical menus lacked content. Almost all of this menu’s links led to Ally’s community page.

These pages had helpful information, such as how to start investing in three steps and how to become a better investor, but it wasn’t organized logically. Date-created content was listed. The content is solid and geared toward newer investors and traders, but it’s not as specialized or deep as the menu selections suggest.

Ally Invest’s community page covers life, money, car, home, bank, investment, trends, etc. This community page can be customized by the user under each of these content areas. Money options included budget, credit, estate planning, finance basics, savings, and taxes. There are blogs, market updates, and Ally Invest trader connections.

Ally Invest Pros & Cons

Ally Invest Pros Explained

• Ally offers commission-free forex trading in 50 currency pairs via desktop and mobile apps.
• Ally Bank pays up to 2.00% on cash and allows daily transfers of up to $250,000 between investment and bank accounts. The investor must move cash between investment and banking accounts to earn interest and fund a trade. Investing idle cash requires this minimal effort. Many online brokers pay no or low interest on cash balances.
• Ally Invest’s platforms for self-directed and managed accounts work with the company’s online banking, credit cards, certificates of deposit, home loans, and auto loans. Customers of Ally can see all of their financial products and their overall financial health in one place. When someone clicks on a brokerage account, they go to Ally Invest.
• Commissions, fees, and minimums offered by Ally Bank are competitive. There are no commissions on stock/ETF and foreign exchange trades, and options trading costs of $0.50 per contract are lower than those of most brokers. There is no minimum for self-directed investment accounts, but there is a $100 minimum for most robo-managed accounts, which incur a 0.30 percent annual fee (there are no management fees for cash-enhanced robo-managed portfolios with a 30 percent cash balance). Also competitive are margin rates and commissions for bonds, mutual funds, and low-cost stocks (OTC/pink sheet stocks trading for under $2).
• The main website is non-streaming, but it’s well-designed, responsive, and has intuitive menus. While the primary website provides the most screeners, trading products, and education, the streaming version has an easy-to-use interface that can run simultaneously. Ally Invest was easy to use despite multiple platforms.

Ally Invest Cons Explained

• Trading in cryptocurrencies or futures is not supported by Ally Invest on its platforms.
• Trailing stops and contingent orders, including profit-taking and stop-loss levels, are not supported by Ally Invest. After a purchase order has been filled, the trader must create a new order to set stop-loss/profit-taking levels and cancel one of these orders when the stop-loss or profit-taking level is triggered. This feature is present in more recent trading modules, so Ally should implement it. In addition, Ally Invest lacks popular trading tools trailing stops and contingent orders.
• All platforms don’t offer all trading products. The app only trades stocks, ETFs, and options. The mobile app lacks screeners and advanced options.
• Although Ally Invest’s platforms are functional, there are inconsistencies between them. Options and stocks/ETFs can be traded on all platforms, but fixed income and mutual funds cannot. The primary Ally Invest account page features screeners and options analysis tools that are not accessible on mobile or streaming platforms. This is unfortunate, as many traders favor streaming platforms over traditional legacy websites, but both will be required to access all features.

Is Ally Invest A Worth Broker to Get?

Ally is an excellent choice for your next broker, particularly if you already have an account with its parent bank or are planning to move all of your business to the same financial institution.

• The integration with Ally Bank makes it simple to transfer funds between accounts, which is particularly useful when you need to execute a trade or pay a bill quickly.
• The commissions on the majority of products, including stocks, ETFs, and bonds, are particularly attractive. Options trading costs just $0.50 per contract, which is among the lowest in the industry.
• Ally could be more investor-friendly in regards to certain account fees, the number of no-transaction-fee mutual funds, and the ability to purchase fractional shares.

Robo Portfolios from Ally Invest are a viable option for investors who do not wish to actively manage their portfolios.

Ally Invest provides solid options for both active and passive investors at fees that are among the lowest in the industry. It is distinguished by its robo-advisor platform, which offers four distinct portfolio types and an interest-earning cash cushion to mitigate market risk. If you’re looking for a comprehensive investment service that also provides a one-stop shop for your entire financial life, Ally Invest should be on your shortlist of choices.

FAQs

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Source: Investopedia, Bankrate