Ally Bank's High Yield Savings Account

Yes, Ally Bank offers a high yield savings account called the Ally Bank Savings Account. It is their primary savings product and comes with no monthly maintenance fees, no minimum balance requirement, and no account opening fees. The interest rate changes based on market conditions, so the rate you earn today may differ from the rate next month.

The account is FDIC-insured up to $250,000, which means your money is protected by federal insurance if the bank fails. You can open the account online in minutes and begin depositing money immediately. Withdrawals and transfers are available through Ally's website, mobile app, or by phone.

Key Takeaways

  • Ally's savings account has no minimum balance, no monthly fees, and no opening fees, making it accessible to anyone who wants to open it.
  • The interest rate is variable and changes based on market conditions, so you should check Ally's website to see the current rate before opening.
  • You can make up to six withdrawals or transfers per month before Ally charges a fee, though this limit may change.
  • The account is FDIC-insured up to $250,000, protecting your deposits if the bank fails.
  • Ally does not offer a separate money market account; the savings account is their main product for earning interest on deposits.

How the Interest Rate Works

Ally's savings account earns interest daily and compounds it daily as well, meaning you earn interest on your interest. The rate Ally offers changes whenever the Federal Reserve adjusts its benchmark interest rate or when Ally decides to change its rate independently. You can see the current rate on Ally's website before you open an account.

Interest is deposited into your account monthly. Unlike some banks that offer tiered rates based on your balance, Ally pays the same rate on all balances in the savings account. This means a deposit of $100 and a deposit of $100,000 earn the same percentage rate.

Withdrawal Limits and Fees

Federal law allows you to make up to six withdrawals or transfers per month from a savings account before the bank can charge a fee. Ally follows this rule and charges a fee if you exceed six transactions in a calendar month. The fee amount varies, so check Ally's current fee schedule on their website.

Transfers between your Ally savings account and your Ally checking account (if you have one) count toward this limit. Transfers to external accounts also count. Withdrawals at an ATM or in person do not apply here because Ally is an online-only bank with no physical branches.

How to Open and Fund the Account

You can open an Ally savings account on their website or through their mobile app. The process takes about 10 minutes and requires your Social Security number, date of birth, address, and a valid form of identification. Ally will verify your identity electronically.

Once your account is open, you can fund it by linking an external bank account and transferring money in. ACH transfers typically take one to two business days to arrive. You can also have your employer deposit your paycheck directly into the account if you provide them with Ally's routing number and your account number.

Comparing Ally to Other High Yield Savings Options

Other online banks and credit unions also offer high yield savings accounts. The main differences are usually the interest rate, whether there is a minimum balance, and whether the bank charges monthly fees. Ally's lack of fees and minimum balance makes it competitive, but the interest rate is the biggest factor in how much money you earn.

Some banks offer promotional rates for new customers that are higher than their standard rate for a limited time. Ally sometimes runs promotions, but you should compare the standard rate (the rate you will earn after any promotional period ends) across banks before deciding. The rate you see today may not be the rate you earn six months from now.

Moving Money In and Out

Ally allows you to link external bank accounts for transfers. You can move money from your Ally savings account to another bank using an ACH transfer, which typically takes one to two business days. You can also transfer money from another bank into Ally using the same method.

If you need cash immediately, you cannot withdraw from an ATM because Ally has no ATM network. You would need to transfer money to an external bank account first and then withdraw from that bank's ATM. This process takes at least one business day, so plan ahead if you need physical cash.

What Happens to Your Money If Ally Fails

Your deposits in Ally's savings account are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account holder per bank. This means if Ally Bank fails, the FDIC will reimburse you for your balance up to that limit. If you have more than $250,000 in the account, only $250,000 is protected.

If you have multiple accounts at Ally (such as a savings account and a checking account), the FDIC insurance covers each account type separately. So you could have $250,000 in savings and $250,000 in checking, and both would be fully insured. The FDIC insurance is automatic; you do not need to do anything to activate it.

Frequently Asked Questions

Can I set up automatic transfers from my paycheck to Ally savings?

Yes. You can set up direct deposit by providing your employer with Ally's routing number and your account number. You can also set up automatic transfers from another bank account on a schedule you choose through Ally's website or app.

What is the current interest rate at Ally?

Interest rates change frequently and vary based on market conditions. You should visit Ally's website to see the current rate before opening an account. The rate displayed is the rate new and existing customers earn on deposits.

Can I have multiple Ally savings accounts?

Yes, you can open more than one savings account at Ally. Each account is FDIC-insured separately up to $250,000, so having two accounts gives you $500,000 in total FDIC coverage. You can use separate accounts to organize money for different goals.

What happens if I withdraw more than six times in a month?

Ally charges a fee for each withdrawal or transfer beyond six per calendar month. The fee amount is listed on Ally's fee schedule. You can avoid the fee by keeping your transactions at or below six per month.

Does Ally offer any other savings products besides the savings account?

Ally offers a savings account as their main savings product. They also offer certificates of deposit (CDs), which lock your money away for a set period in exchange for a fixed interest rate. CDs typically pay higher rates than savings accounts but require you to leave the money untouched until the CD matures.