Ally Invest is an investment advisor ideal for active traders looking for $0 minimum deposits, easy-to-use tools, commission free investing, and 24/7 market access. It is also an excellent investment option for passive investors seeking automated advice with zero advisory fees. However, the platform charges transaction fees for bonds, mutual funds, and specific stocks. Here is an Ally Invest review to help you learn more.
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Key Features
- Account minimum: $0
- Stock trading costs: $0
- Options trades: $0.50 per contract; no base commission
- Account fees: No annual fees or inactivity fees: $50 total or partial outgoing transfer fees
- Number of no-transaction-fee mutual funds: About 3,900 funds
- Tradable securities: Stocks, bonds, ETFs, Forex, Options, Mutual funds
- Trading platform: Browser-based platform with customizable charting, free screening tools, research, and real-time data.
- Mobile app: Access to trading, holdings, order status, ETF screener, transfers, watch list, research, and other activities
- Customer support: available 24/7 by email, phone, and chat
Perks and Limitations
Founded in December 2005, Ally Invest is a US stock broker regulated by the Financial Industry Regulatory (FINRA) and the Securities and Exchange Commission. It has a banking subsidiary, Ally Bank, and is also listed on the New York Stock Exchange.
Ally Invest is a versatile investment platform with low stock-trading commissions. Here are some top perks and some limitations of investing with Ally Invest.
Perks
1. Commission-Free Trades
Ally Invest charges $0 trades for options, stocks, and ETFs. However, it is essential to note that all the stocks priced at less than $2 per share are charged a commission of S4.95 and $0/01 per share. Bonds, on the hand, are set at a $1 commission, and you can buy or sell no-load mutual funds at a fee of $9.95.
2. Reasonable Margin Rates
Ally Invest offers margin rates lower than most of the significant players in the market. It is an excellent option for investors who use large amounts since it is less expensive than most of its peers.
3. Low Mutual Fund Transaction Fees
Ally Invest has no free funds but ranks quite well for investors for its low $9.95 commission.
4. No Minimums
Ally Invest is no minimum discount broker; you can open an account with as little as $1. It is an excellent option for beginner online stock brokers who plan to add to their account balance over time.
Limitations
1. High Commission on Low-Priced Stocks
While Ally Invest has one of the lowest trade commissions in the market, the platform still charges a significant commission on low-priced stock. It can be pretty expensive for a customer buying large blocks of sub-$2 stocks.
2. Lacks No-Transaction-Fee Mutual Funds
While Ally Invest charges the lowest mutual fund commission in the market, it does not provide no-transaction-fee (NTF) funds that do not incur commission funds completely.
3. No Trading Tools for Active Traders
Ally Invest is not a sophisticated trading platform ideal for active traders. While it is best suited for long-term investors, the platform does not offer much room for traders who like to do a lot of research on their trades and might be better off opting for other tech-heavy competitors.
Who Is It For?
Ally Invest is an excellent platform if any of the following statements apply to you:
1. You are Price-sensitive and Trade Frequently
Ally Invest offers the lowest trading prices in the market, especially for options and stocks.
2. You Use Mutual Funds as the base of Your Portfolio
You can decide to open a mutual fund account with every mutual fund company or invest through Ally for $9.95 per trade and keep all the mutual funds in one place.
3. You Do Not Require Much Hand-holding Through the Investment Process
Large brokerage firms have field offices set up in major metropolitan areas, which is a great advantage to most investors. However, most investors are okay with the phone and online customer service.
4. You Do Not Want a Complicated Trading Platform
Ally Invest customers can place their trading through the web interface without downloading a platform to make the trade.
5. You Do Not Want to Trade with Penny Stocks
Ally Invest charges a high commission for stock prices less than $2. It is a costly platform for people who like to buy low-priced stocks.
Ways to Invest with Ally Invest
Ally Invest provides some other most common accounts you can invest in. They include:
1. Self-Directed Trading
This type of account is ideal for investors who want to manage their portfolios. You can start trading ETFs and stocks for $0 commission and with no account minimum. It is, however, essential to note that other fees may apply to this type of account.
2. Automated Investing Accounts
Also known as Robo portfolios, the smart Robo-advisor technology recommends automated investing accounts. It selects from 4 portfolio choices: income, core, tax optimized, and socially responsible. Here you will need to start investing $100.
3. Wealth Management
Wealth management accounts come with dedicated fiduciary advice and a portfolio constructed around your preferences. If you have an existing Ally Invest or Ally Bank account, you can set up a consultation with a minimum of $100,000 in investable assets.
4. Retirement Accounts
Ally Invest also offers traditional and Roth individual retirement accounts (IRA).
Commissions
Commissions are a vital consideration when deciding the investment platform to go with. Ally Invest has the lowest commissions among its peers on stocks and mutual funds. Here is a summary of the commission charged by Ally Invest:
|
Stocks and ETFs |
Stock Options | Mutual Funds |
| $0 | $0 per trade, $0.50 per contract |
$9.95 |
Buying Mutual Funds
Ally Invest offers more than 12,000 mutual funds. However, all of them come with a load, meaning they will take a percentage of what you invest as fees or have a transaction fee of $9.95 when investing in mutual funds.
Here is a summary of the mutual funds available in Ally Invest:
| Total mutual funds | More than 12,000 |
| No-load, no-transaction-fee mutual funds |
None |
Fees
Reading through the Ally Invest disclosure before opening a brokerage account is essential. Here are some of the fees you must be on the lookout for when you are investing in the platform:
Paper Statement
Ally Invest charges a paper statement fee of $4 if you opt for the mailing option. However, as most brokerage firms do, the platform encourages its customers for electronic delivery.
Penny Stock Fee
Ally Invest charges a higher fee for low-priced stocks. The platform charges $0.01 per share ($4.95 minimum) for all stocks priced under $2 per share.
Trading Platform
Ally Invest does not have a complicated trading platform. This can be a pro and a con depending on how you view it. It is an excellent option for beginner traders but is not helpful to active and experienced traders. It has a web-based trading platform using HTML 5, which works well on small and large screens.
It also has a mobile app available for iPhone and Android. The trading platform is easy to use, and any trader can transact on it with a few clicks.
Ally Invest’s Margin Rates
Ally Invest allows you to borrow against your investment value. Some investors use margin loans to leverage their portfolio, i.e., invest the money they borrow. This will enable you to increase the profits on your investment, thus raising in value at a higher rate than the cost of borrowing money. Ally Invest charges interest on a sliding scale model, where the interest rate decreases the more you borrow.
Here is a summary of how:
|
Margin Balance |
Interest Rate |
|
Up to $9,999 |
9.25% |
|
$10,000 to $24,999 |
9.25% |
|
$25,000 to $49,999 |
9.00% |
|
$50,000 to $99,999 |
8.25% |
| $100,000 to $249,999 |
7.00% |
| $250,000 to $499,999 |
6.00% |
| $500,000 to $999,999 |
5.50% |
| $1 million and up |
4.75% |
Account and Research Amenities
Ally Invest offers a range of helpful tools and resources to help you make informed investment decisions. They include:
1. Stock Screener
The platform has a stock screener available on its primary website but not in its mobile app or Ally Invest Lives. The screener provides users with criteria they might find helpful, including sectors, fundamentals, exchanges, valuation, and price performances. It also has other vital information, including earnings per share, accounting ratios, dividends, and consensus analyst ratings from FactSet. The screener also has critical information, such as specific patterns.
2. Mutual Fund and ETF Screener
Ally Invest Securities LLC only provide the ETF screener on the Ally Invest Live website. The Mutual Fund and ETF screener have performance, profile, portfolio, and risk analysis criteria. The risk analysis criteria are not available on the stock screener.
3. Options Screener
The platform has an Options Strategy Scanner that returns potential options strategies and forex trading. Users enter the option strategy, usually the two-leg strategy, among other criteria, including market sentiments, the universe of stocks to search, and options criteria such as strike preferences and time frame. Ally Invest also has option analysis tools, including the profit/loss calculator, probability calculator, and graphing.
4. Fixed Income Screener
You can click on ‘Trading’ and the ‘Fixed Income’ on the standard website. There you will get a list of bonds that match your query and a bond detail page with all the information about the bond on your lists to help you make an informed decision on fixed income assets. However, the fixed income basic screener is pretty basic and has few criteria to choose from.
5. Charting
The platform has charted on the mobile application, but they are limited since you cannot draw trend lines, and there is no cursor to show the open/high/close/low prices. Once the chart is on your screen, you cannot resize it in any way other than changing the time frame.
6. Tools and Calculators
The platform offers a limited range of calculators. It only has the bond yield calculator and the profit/loss calculator. There are also calculators related to option trading on the primary websites.
7. Trading Idea Generator
The trading idea generator is a Strategy Builder. It functions almost the same as a screener but includes backtesting. Ally Invest has nine expertly created and backtested strategies, including quality stocks at a reasonable price, growth at reasonable prices, and good things coming in small packages. These strategies are screens, and the account holder can choose from the securities displayed to select the one that meets the search criteria.
8. News
Ally Invest has news from MT Newswires and essential information from a specific security platform when selected. However, this offering is quite generic and lacks filtering or any search functionality, but it can be useful for most investors. The section also has additional helpful information, including market overviews and a calendar of events showing expected earnings, macroeconomic releases, and dividend announcements.
9. Third-Party Research
The platform does not offer third-party research but offers Lipper Information incorporated into different screens and Morningstar information on the site when looking at individual securities. There are also algorithmic ratings available on various screens from Trading Central, referred to as Quantamental Rating. However, this is only available on website screeners and not on the app.
Alternatives to Consider
Ally Invest offers low trading fees and is an excellent option for beginner investors who want to avoid actively trading. However, many brokerage firms are available in the market if you are looking for other trading platforms with form complex features, many are available in the market. Here is an Ally Invest review against other firms:
Ally Invest Vs. Merrill Edge
| Ally Invest |
Merrill Edge |
|
Min. Investment
|
Min. Investment
|
|
Fees
|
Fees
|
Investment choices
|
Investment choices
|
Ally Invest Vs. J.P Morgan
|
Ally Invest |
Chase.com |
|
Min. Investment
|
Min. Investment
|
|
Fees
|
Fees
|
Investment choices
|
Investment choices
|
Other Things You Need To Know About Ally Invest
1. Can I Withdraw from My Ally Invest Account?
Yes. You can request to withdraw the funds by logging in and selecting ‘Transfers.’ You can also transfer funds to another account for a $30 transaction fee. Additionally, you can request a check at a $5 fee.
2. Which Is Better, Ally or Fidelity?
Fidelity and Ally Invest have many benefits, including low trading rates. Ally Invest offers various financial services, including checking savings accounts, while Fidelity provides specialized services to retirement and professional investment managers.
3. How Long Does It Take to Get Approved for Ally Invest?
Ally Invest takes 5 to 7 days to approve any request.
4. Is Ally Stock A Good Investment?
Valuation metrics show that Ally Stock may be undervalued. The value score indicates that it is an outstanding stock with good value for its investors. The stock’s financial health and growth show that it has the potential to outperform the market. Find out more on the best stocks to invest in Singapore.
Closing
Ally Invest is a solid investment platform thanks to its intuitive investment system with competitive fees, commission, and margin rates. It offers investors much support with screeners to help them choose the best securities to invest in. Although the platform’s website might be outdated, recent updates have enhanced user functionality.
Key Takeaways
- Ally Invest does not require a minimum account balance and charges 0 commission on most trades.
- It is a solid web-based platform.
- It does not offer fractional shares.
- The platform charges transaction fees for bonds, mutual funds, and specific stocks.
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