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Ally Invest – Is it legit? Review 2021

Ally Invest

8.4

Fees

8.0/10

Account minimum

9.0/10

Ease of use

9.0/10

Beginners

10.0/10

Advanced users

6.0/10

Pros

  • Low minimum requirements
  • Commission-free trades
  • Great for beginners and those who already have an account with Ally

Cons

  • Very advanced investors should look elsewhere
  • No fractional shares
  • No tax loss harvesting
Disclosure: Please note that this article may contain affiliate links

If you’re looking for an online broker that does it all – managed portfolios and self-directed investments, check out Ally Invest.

Whether you have a short-term goal to save for a house or a long-term retirement goal, Ally invest offers multiple account options and commission-free trades, catering to different types of investors.

Is Ally Invest right for you? Check the important information in this review before you sign up.

What is Ally Invest?

Ally Invest is an investing platform offering both a DIY platform and robo-advisor. They trade stocks, bonds, options, ETFs, and mutual funds. Some investors may also trade forex, but Ally Invest recommends a minimum balance of $2,500, even though their ‘required’ investment is $250.

Ally Invest falls under the parent company Ally Financial, Inc. which also houses Ally Bank, an online-only bank with high APYs and low loan interest rates. Ally Financial purchased TradeKing in 2016, one of the lowest-cost investment platforms at the time, improved its programs, and removed commission fees.

No management fee
Account Minimum
$100.
Management Fee
0.00% or 0.30% for the legacy Managed Portfolio option
Portfolio
Goal and risk based. 17 ETFs.
Rebalancing
Tax Loss Harvesting
Fractional Shares
Automatic Deposits
Smart Beta
SRI
401(k) Assistance
Human Advice
Best for
Investors who are looking for a low-cost hands off solution. Great if you already have an account with Ally.
Supported Accounts
Individual, Joint, Roth, traditional and rollover IRAs. Custodial accounts.
Summary
AllyInvest allows hands-off investing with no fees. It offers 4 different portfolio types: Core, Income, Tax-optimized and Socially Responsible
Review
-
Current Promotion
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No management fee
Account Minimum
$100.
Management Fee
0.00% or 0.30% for the legacy Managed Portfolio option
Portfolio
Goal and risk based. 17 ETFs.
Rebalancing
Tax Loss Harvesting
Fractional Shares
Automatic Deposits
Smart Beta
SRI
401(k) Assistance
Human Advice
Best for
Investors who are looking for a low-cost hands off solution. Great if you already have an account with Ally.
Supported Accounts
Individual, Joint, Roth, traditional and rollover IRAs. Custodial accounts.
Summary
AllyInvest allows hands-off investing with no fees. It offers 4 different portfolio types: Core, Income, Tax-optimized and Socially Responsible
Review
-
Current Promotion
-

How does it work?

Account opening

Opening an account at Ally Invest takes less than 10 minutes.

After clicking ‘Get Started’, choose Self-Directed or Managed Portfolios. A self-directed account requires you to buy, sell, and manage your investments. Ally Invest doesn’t rebalance your portfolio, but they provide educational and research tools to assist you.

The robo-advisor or managed portfolio program, walks you through the steps including identifying questions. You’ll answer questions about your goals and risk tolerance and Ally Invest’s program provides you with portfolio options based on your answers. Ally’s automated program rebalances your portfolio, reducing the risk of emotionally-charged investment decisions.

Deposit and withdrawal

Ally Invest offers four ways to deposit funds:

  • ACH transfer – Transfers from an Ally Bank account post immediately. All externally linked accounts take up to 5 business days.
  • Wire transfer – Wire transfers are the fastest. They post within a few hours up to one day depending on the bank.
  • Broker transfer – Transfer your brokerage account online. If you transfer $2,500 or more, Ally Invest reimburses the transfer fees.
  • Check – Personal checks take up to 3 business days to clear, but bank issued checks clear upon receipt and verification with your bank.

You may withdraw funds by selecting ‘Transfers.’ Transfer the funds to your linked checking account, request a wire ($30 fee) or a mailed check ($5 fee). Most transfers require a 3-5 day clearing period.

Interface

Its web-based interface provides real-time updates on any internet-enabled device. Trade, obtain quotes, conduct research, or check your balances on your customizable dashboard. Best of all, the interface is user-friendly and has a mobile app option too.

Trading options

We love the fact that Ally Invest’s managed portfolios offers four portfolio choices:

  • Core – Select your risk tolerance from conservative to aggressive and Ally Invests creates a mixed portfolio of domestic and international assets including stocks and bonds.
  • Income – Investors with a lower risk tolerance choose this portfolio for its dividend yields and conservative investments.
  • Tax optimized – Further your after-tax retirement funds with this portfolio which focuses on tax-exempt or tax-advantaged investments.
  • Socially responsible – Focuses on companies with sustainable practices, focusing on environmentally-conscious, energy-efficient, and socially responsible practices.

If you choose a self-directed trading account, you manage your portfolio, buying and selling assets as you want using Ally Invest’s intuitive trading tools. Think about your options before signing up. How much control do you want? Are you a hands-off investor or does handling your own portfolios excite you?

What can you trade?

Trade any of the following on Ally Invest:

  • Stocks
  • Bonds
  • Mutual funds
  • ETFs
  • Forex
  • Options
  • If you are looking to trade Crypto, you will be better off with a different robo-advisor, such as RobinHood for example.

Costs

Neither the self-directed or managed portfolio has advisory fees. Ally Invest also doesn’t charge commissions on stock or ETF trades priced $2 and up. Options trade for $0.50 per contract (no commission) and bonds trade at $1 each. No-load mutual funds trade at $9.95 per fund.

Assets priced below $2, cost $4.95 base fee plus $.01 per share traded with a maximum of 5% per asset value, so keep that in mind if you trade penny stocks – they don’t fall under the no-commission category.

Other fees include:

  • $25 IRA closure fee
  • Paper tax documents $50
  • Outgoing wire transfer (full or partial) fee $50
  • Check withdrawal $5
  • Domestic wire $30
  • Returned check $30

Additional features

  • Each of Ally Invest’s Managed Portfolios has a cash enhanced portfolio feature for the risk-averse investor. Best of all, it sets aside 30% of your portfolio in cash and earns a minimal interest rate. This account is not FDIC insured.
  • Access customer service via chat email or phone 7 AM to 10 PM Eastern Time Monday – Sunday.
  • Perform in-depth stock, ETF, and mutual fund research. It may not compare to its bigger competitors, such as Charles Schwab and Fidelity, but it’s plenty for beginners and low-key investors.
  • Ally Invest offers plenty of education geared toward beginning investors. It’s not on the Ally Invest website, but you can find it

Tutorial

Ally Invest Pros and Cons

PROs
No-commission trades - Stocks, options, and ETFs trade free if they are worth more than $2.
CONs
No paper trading account – Ally Invest doesn’t offer paper or virtual trading making it hard for new investors to try investing before risking their money.
Low minimum account requirements – Managed portfolios require a minimum of $100 deposit, and self-directed accounts have no minimum balance requirement.
Many commissions – Even though they advertise commission-free investing, many trades still incur fees
Customizable dashboard - Create the dashboard you need for ease of use, fast trades, and up-to-the-minute balances
Not advanced enough for experienced investors – Ally Invest has basic features, which many advanced investors may find lacking
Great for beginners With no commissions, plenty of educational opportunities, and many investment options, beginners get acclimated quickly
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Easy integration with Ally Bank account – If you want your bank and investment accounts in one place, Ally Bank and Ally Invest seamlessly integrate
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PROs
No-commission trades - Stocks, options, and ETFs trade free if they are worth more than $2.
Low minimum account requirements – Managed portfolios require a minimum of $100 deposit, and self-directed accounts have no minimum balance requirement.
Customizable dashboard - Create the dashboard you need for ease of use, fast trades, and up-to-the-minute balances
Great for beginners With no commissions, plenty of educational opportunities, and many investment options, beginners get acclimated quickly
Easy integration with Ally Bank account – If you want your bank and investment accounts in one place, Ally Bank and Ally Invest seamlessly integrate
CONs
No paper trading account – Ally Invest doesn’t offer paper or virtual trading making it hard for new investors to try investing before risking their money.
Many commissions – Even though they advertise commission-free investing, many trades still incur fees
Not advanced enough for experienced investors – Ally Invest has basic features, which many advanced investors may find lacking
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FAQ

Is Ally Invest good for beginners?

Ally Invest’s commission-free structure, detailed educational tools, and research options help beginners learn the ropes. With only $100 minimum for managed portfolios, it is among the best robo advisors for beginners. Many people can start investing even with a little money. If you prefer self-directed investing, the lack of account balance minimum requirement and robust research helps beginners invest.

Is Ally Invest safe?

Ally Invest is a member of SIPC which protects your accounts up to $500,000. Note, SIPC doesn’t guarantee share price, just a return of your shares should Ally Invest go under. If the share price decreases, SIPC coverage doesn’t help; it just ensures the return of your shares. Ally Invest has additional insurance through London Underwriters for accounts greater than $500,000.

Can you make money with Ally Invest?

Like any broker, there’s a chance you’ll make or lose money. With the right steps, a bit of luck, and plenty of research, you can make money with Ally Invest. Choosing a managed portfolio increases your chances of earnings because Ally Invest creates portfolios based on your risk tolerance and automatically rebalances your portfolio if it goes astray.

Does Ally Invest offer forex trading?

Investors can try their hand at forex trading with Ally Invest. This is one area they offer a practice account, giving you $50,000 in virtual funds to try your hand at forex trading for 30 days. The practice account provides access to the desktop, web-based, and mobile platforms giving you a true feeling of forex trading.

How long do Ally Invest transfers take?

It depends on how you transfer the funds. Transfers between Ally Bank and Ally Invest take less than 2 minutes, posting immediately. Transfers between external accounts take 3 – 5 business days depending on your bank’s process. Ally doesn’t transfer funds on weekends or holidays.

What type of accounts can you open with Ally Invest managed portfolios?

Ally Invest offers a large selection of accounts whether you want an individual taxable account or a retirement account. Investors may open an individual or joint account (taxable or tax-advantaged), traditional or Roth IRA, rollover IRA, and custodial accounts. If you have short-term goals, open an individual or joint taxable account, but if retirement is your goal, choose from one of the many IRA options.

Does Ally Invest offer a dividend reinvestment plan?

A dividend reinvestment plan reinvests your dividends in securities, buying whole or fractions of shares. Ally Invest offers DRIP for all securities priced over $4. You can have all dividends reinvested or only specific dividends. There is no charge.

How does Ally Invest make money?

Without advisory fees and no commissions, how does Ally Invest make money? As you can see above, they charge fees in other areas making up for the lack of commissions or advisory fees. They also encourage the use of Ally Bank for instant and easy transfers, earning money on both sides of the coin.

Alternatives

Ally Invest vs E-Trade Core Portfolios

If you have at least $500 to invest, E-Trade Core Portfolios offers professionally managed ETF portfolios create to meet your goals. E Trade has five portfolio options and its powerful software program reallocates your investments as needed. You can update your goals at any time and stay informed 24/7.

Ally Invest vs Fidelity

If you have at least $25,000 to invest, consider Fidelity. Like Ally Invest, Fidelity offers commission-free trades. They offer both a robo-advisor (fully digital) and a combination robo-advisor/human coaching option.

The robo-advisor program doesn’t have a minimum balance requirement and only allows a single goal.

The combination account requires $25,000 invested but offers ‘live coaching’. Both accounts have advisory fees of 0.35% and 0.50% respectively.

Ally Invest vs TD Ameritrade

Like most online brokers TD Ameritrade offers commission-free trading and no account minimums. If you love research or making complex trades, choose TD Ameritrade. It’s great for day traders or active traders that want more than what a typical robo-advisor offers.

Ally Invest vs Robinhood – Robinhood is good for investors looking for complete control. Robinhood pioneered the $0 commission trades, but they aren’t your traditional robo-advisor. You select and manage your portfolios. Keep in mind, Robinhood only trades stocks, ETFs, options (and soon cryptocurrencies).

Ally Invest vs Vanguard

If your primary focus is mutual funds and ETFs, consider Vanguard. Known for their low-cost ETFs, Vanguard trades both mutual funds and ETFs commission-free. Vanguard offers an all-digital advisor and Personal Advisor services, but the advisors work on a fiduciary basis, so advisors must work to your benefit, not the size of their paycheck.

Vanguard Personal Advisor charges 0.3% of assets under management, but you have access to a human advisor.

Current Promotions

Currently there are no promotions.

Worth It or a Scam?

Ally Invest is worth it for beginners. With no commissions and only $100 minimum for a managed portfolio, anyone can invest. They have a limited number of portfolios, but sometimes less is more. We also like its self-directed accounts for beginners, despite its lack of a paper trading account. The minimal fees, easy-to-use interface, and multiple platforms work great for investors starting a new investment journey.

If your focus is mutual funds, though, look elsewhere. Its lack of no-transaction-fee mutual funds is minimal and better suited for other online brokers such as Sofi Invest or Wealthfront.

Summary

Ally Invest offers the best of both worlds. New investors testing the waters with a robo-advisor or new self-directed investors find value in this platform. With no advisory fees and minimal trading fees, Ally Invest works great for beginner investors with little money to invest but a drive to dive in and meet their financial goals.

Robo Chooser

Use the following Quiz and find out which robo advisor is best for you.

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