Ally Invest
Product Name: Ally Invest
Product Description: Ally Invest allows you to trade stocks, ETFs, mutual funds, bonds, and options. There are no commissions, and options are $0.50 per contract.
Summary
Ally Invest offers self-directed with no commissions or minimums. Its automated portfolios require a $100 minimum investment and are either free or 0.30% annually, depending on the plan you choose. If you want some help, you can also get a portfolio managed by an advisor and personalized advice. There is a minimum of $100,000 for a managed portfolio.
Pros
- Ally Invest offers both self-directed brokerage, automated, and managed portfolios
- $100 minimum on robo portfolios
- Free automated portfolio available
- Incoming ACAT fee reimbursement up to $75
Cons
- Cash-enhanced automatic portfolio is free but requires a 30% cash position, or you can pay 0.30% per year
- $100,000 minimum investment for managed portfolios
- No detailed Level 2 market-level data for doing your own research
If you’ve been thinking about opening an account with Ally Invest, this review is for you.
I’ve been using Ally Invest as my primary stock brokerage for years. I started with TradeKing, stayed on during the acquisition, and have held a sizable portion of my investments with Ally Invest.
I’m a fan because they offer free trades, a rich suite of research tools, and an interface that is intuitive and easy to navigate. They don’t offer free trades of mutual funds but I invest in mutual funds directly with Vanguard so this isn’t an issue for me. (Ally Invest offers free trades on ETFs, though)
At a Glance
- Ally Invest offers automated investing, self-directed investing, and managed accounts.
- No minimum to get started with self-directed investing and $100 minimum for automated investing.
- Managed accounts require a $100,000 minimum investment.
- Low fees and an easy to use service.
Ally Invest is best for beginner to intermediate investors who are comfortable managing a self-directed investment account. The low minimums and free trades make it very accessible to someone who doesn’t have a lot to invest but the tools and features of the account still support someone who needs more.
If you just want mutual funds, skip Ally Invest and go with the company offering the funds directly. If that’s Vanguard, open a Vanguard account. If it’s Fidelity, open a Fidelity account.
If you want a hands-off managed fund like a robo-advisor, Ally Invest offers a pretty good product, but compare it with the leading robo-advisors currently available.
It’s not ideal for advanced investors, day traders, technical traders, or someone who needs a lot of market data (Level 2) to make decisions. If that describes you, there are other brokerages that will give you that level of detail into the market.
Ally Invest Alternatives
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| Tradable securities | Stocks, ETFs, options | Stocks, bonds, ETFs, mutual funds, options, and futures | Stocks (including OTC), ETFs, options, and futures |
| Crypto | Yes | No | No |
| Robo-advisor available | No | Yes | Yes |
| Learn more | Learn more | Learn more |
Table of Contents
🔃 Updated December 2024 to add the personal advice features and double-check for any other changes to the service.
Who is Ally Invest?
Ally Bank got into the brokerage game through acquisition in 2016 and renamed it Ally Invest Securities, or Ally Invest for short. They’re regulated by FINRA, you can look up their listing on BrokerCheck, and they’re licensed to operate in all 50 states plus Washington D.C. and Puerto Rico.
Ally Invest has self-directed trading accounts (taxable brokerage, IRA) as well as “Robo Portfolios,” which is their term for their robo-advisory-like automated investing services. We will dig more into both of those account types.
Self-Directed Trading Accounts
Ally Invest has no minimum to get started, and you can trade most U.S.-listed stocks, ETFs, and options with no commissions.
It supports taxable brokerage accounts as well as individual retirement accounts with no minimum. You can trade practically everything – stocks, bonds, mutual funds, ETFs, options, and even forex. The only asset not on that list is cryptocurrencies but I don’t invest in cryptocurrencies – and here’s why.
Best of all, all those trades are commission-free. Options have a $0.50 per contract fee, but no base commission is charged.
The platform is pretty sophisticated and offers everything you could need from your basic brokerage account. There are real-time quotes, research, a customizable dashboard, and it is all accessible online. You don’t get Level 2 market data, though.
Ally uses TipRanks “Smart Score,” which rates stocks on a scale of one to ten and helps you make quicker and more informed decisions. It also has stock screeners and data such as news, metrics, pricing info, dividend rates, etc. You can also access expert analysis about individual stocks from TipRanks.
Once you are logged in, you’ll see the default dashboard. They call it Ally Invest Live.
You can customize it, but the default shows you a lot of data very quickly, with threads you can pull for additional research. The best way to use this is as a snapshot into your account to see how your portfolio is performing.
The Dashboard is very well-designed and intuitive to use. When you click on a stock in your Holdings, all the other panels update to that stock – the Chart automatically updates to show you the trailing three months, Options Chains updates to show you all the call and put contracts (the option chains), etc. You don’t have to manually enter it into each panel each time. When you enter a ticker into the search box within any panel, it updates every other panel too. That’s smart.
For customization, you can change what’s shown within each panel. You can also move the panels around but you can’t add or remove panels – though I’m not sure if there is a panel that I’d add that isn’t already here.
Ally Invest has good options forecasting and pricing tools. Within the Option Chains panel, you can dive into the chain of a stock and build an options strategy using their workbench (here I am buying out-of-the-money calls on AAPL):
✨ Related: What is Options Trading
Fee Structure
The fee structure on the self-direct account is pretty much as low as you can get:
- $0 commission-free trades on stocks, mutual funds, options, and ETFs. Options have a $0.50 per contract fee.
- $0 account minimum
- No inactivity fee
- $50 ACAT fee
Personally, if you want to trade mutual funds, the best way to do that is to open an account with the company that offers the funds. For example, if you want a Vanguard fund, open a Vanguard account because you can buy and sell shares for free. And if you want a Vanguard ETF, you can buy and sell those for free on Ally Invest or Vanguard.
Ally Invest Automated Investing
Automated investing is Ally’s robo advisor. You can get started with $100, and you have two portfolio choices; Cash-enhanced and Market-focused.
Cash-enhanced portfolio: With this portfolio, there are no advisory fees, but you’ll have to keep 30% of your portfolio in cash. The cash balance earns a competitive interest rate, but is not FDIC-insured and isn’t as easy to access as a typical savings account.
Market-focused portfolio: With this portfolio, you pay a 0.30% annual advisory fee, and you have to keep about 2% of your portfolio as cash.
With robo advisors, you answer some questions about your goals, and they’ll build a mix of ETFs that meet your goals. Then, you can tweak it as you wish.
Additionally, you can pick from four portfolio options:
If you are having trouble reading the screenshot, it is as follows:
- Core: “Highly diversified across domestic, international, and fixed-income assets. You can choose the amount of risk you are comfortable with, from conservative to aggressive. If you’re more of a hands-off investor, consider this portfolio type.”
- Income: “This portfolio type offers higher dividend yields while maintaining a more conservative risk profile. Consider this portfolio type if you’re most focused on yield and income.”
- Tax-Optimized: “If you make after-tax contributions to an investment account, this type of IRA may help maximize your investments. If you’re looking to invest using a diverse mix of tax-advantaged, low-cost Exchange Traded Funds, consider this portfolio type.”
- Socially Responsible: “Shaped by companies with ethical track records, you’ll only invest in businesses that actively practice sustainability, energy efficiency, or other environmentally friendly initiatives. Consider this portfolio type if eco-friendly practices are important to you.”
Then, their systems (and people) monitor your portfolio and rebalance as needed. It’s similar to the robo-advisory services of other companies (in theory).
Personal Advice
If you don’t want to invest on your own, you can get a dedicated advisor to discuss your goals and risk tolerance, and they will put together a personalized plan for you. You’ll meet for a 15 minute consultation to make sure you are a good fit and to have all your questions answered.
Then, you’ll have two or three meetings to get to know you and create your plan. Once you have approved the plan, your advisor will implement the plan. You’ll then meet quarterly to review and maintain the investments.
You’ll need at least $100,000 to invest, and there is an 0.85% annual fee.
Mobile App
Ally Invest’s mobile app has all the features you’d expect in a brokerage’s mobile app – including the ability to complete any transaction on the app that you’d be able to do on the website. I don’t use the mobile app because I don’t like making major money decisions (like buying and selling shares of stock) on my phone. I prefer to sit at a desk, look at a computer screen, and “get into work mode.”
It’s a little harder to do research on the phone as the only place where “news” is pulled into the app is on the research page, and the only source appears to be from MT Newswires.
But if there was some kind of emergency or urgent need, I could do it.
Ally Invest Alternatives
Ally Invest has carved out a nice spot as a discount brokerage that does everything well, but how does it compare with some others?
Robinhood
At Robinhood, you can buy stocks, ETFs, and options. You can also trade fractional shares and cryptocurrency, which you can’t do at Ally.
When it comes to tools, Robinhood doesn’t have the analysis tools that Ally Invest offers. While they give you access to the same tradable securities, Ally Invest’s options tools far exceed those offered by Robinhood. Robinhood doesn’t have the breadth and depth of research either – they keep costs low so they’ve opted not to offer any research from other firms. You can still get publicly available news, conference calls, etc. – but anything extra is unavailable.
Robinhood’s claim to fame was a slick mobile application with free trades. While not every other brokerage has a great mobile experience, many of them have matched them where it counts the most – free trades. Ally Invest offers free trades, too, and Ally Invest’s mobile app does everything Robinhood’s app does, but it just doesn’t look as slick.
The bottom line is that Ally Invest offers everything Robinhood does (except crypto and fractional shares), plus you can tack on a solid online banking experience all in one spot.
Here’s our full Robinhood review for more information.
ETrade
ETrade and Ally Invest are very similar in that they’ve been competing in the discount broker category for ages. You can trade stocks, bonds, ETFs, mutual funds, options, and futures. ETrade also has a robo-advisor service for 0.30% annually.
While they’re very similar, ETrade’s big differentiator is that it lets you create paper trading portfolios to help you dip your toe into investing. With a wealth of educational tools, you can study stocks and use their portfolios to see how you’re doing with a “practice” account.
ETrade has a $500 account minimum on their brokerage accounts band while trades of options are free; there is a $0.65 per contract fee at ETrade unless you make 30 trades per quarter, then it drops to $0.50. Options are always $0.50 at Ally Invest.
Here’s our full ETrade review for more information.
✨ Related: Best Stock Brokers that Offer Free Trades
Webull
At Webull, you can trade stocks, ETFs, options, and futures. You can also trade fractional shares, which you can’t do at Ally Invest. They also offer over-the-counter securities, including ADRs and derivatives. It also has overnight trading, which allows you to trade 24 hours a day, five days a week.
Webull also offers a robo-advisor service if you don’t want to manage your own portfolio.
For research, Webull gives you access to the fundamentals, such as income statements, balance sheets, and cash flow statements. You can also get real-time insights to understand what has been happening recently to the investment. For example, you can see if a stock has had an uptick in shorting activity. You can also easily add events to your calendar, such as company earnings calls, so you can stay updated.
Here’s our full review of Webull for more information.
Final Verdict
Ally Invest is a great all-around brokerage account because of its $0 minimum and commission-free trades on stocks, bonds, mutual funds, options, and ETFs. I’ve been using them for years and have never had any issues. With no minimum, association with a great bank in Ally Bank, it’s a good place for any investor looking to start investing.
I first fell in love with them because they offered inexpensive trades, but now that so many brokerages are offering free trades, I’ve stayed for the ease and simplicity of the platform.
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About Jim Wang
Jim Wang is a forty-something father of four who is a frequent contributor to Forbes and Vanguard’s Blog. He has also been fortunate to have appeared in the New York Times, Baltimore Sun, Entrepreneur, and Marketplace Money.
Jim has a B.S. in Computer Science and Economics from Carnegie Mellon University, an M.S. in Information Technology – Software Engineering from Carnegie Mellon University, as well as a Masters in Business Administration from Johns Hopkins University. His approach to personal finance is that of an engineer, breaking down complex subjects into bite-sized easily understood concepts that you can use in your daily life.
One of his favorite tools (here’s my treasure chest of tools, everything I use) is Empower Personal Dashboard, which enables him to manage his finances in just 15-minutes each month. They also offer financial planning, such as a Retirement Planning Tool that can tell you if you’re on track to retire when you want. It’s free.
Opinions expressed here are the author’s alone, not those of any bank or financial institution. This content has not been reviewed, approved or otherwise endorsed by any of these entities.
