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Ally Invest Review 2018

Brokers, Investing

Ally Invest may not have the brand recognition of some brokerages, but it packs all the muscle regardless. Ally dove into discount-brokerage field with the purchase of TradeKing in June 2016, and it’s now among the strongest players in the space. Ally rivals the major brokers across the board, but also offers other bells and whistles such as forex trading and automated portfolio management that are not available everywhere. Not only does Ally offer a cheap base commission, it whittles those fees down further for active traders, making Ally a nice choice for these investors.

 


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Quick facts

  • Commissions: $4.95
  • Account minimum: $0
  • Promotion: $200 cash bonus or 90 days of free trades with a qualifying deposit
Get started on Ally Invest's secure site

Compare Ally Invest with other brokers.

Ally Invest is best for:

  • Active traders
  • Options traders
  • Forex traders
Overall
Winner of NerdWallet's award for best low-cost broker.
Stock trading costs
$4.95; volume discount available
Account fees (annual, transfer, closing, inactivity)
$0 inactivity/account fees; $50 full outgoing transfer fee and $50 IRA closing fee.
Trading platform
Browser-based platform with free screening tools, customizable charting, research and real-time data.
Commission-free ETFs
None
Research and data
Free
Tradable securities
• Stocks
• Bonds
• Mutual funds
• ETFs
• Options
• Futures
• Forex

Where Ally Invest shines

Commissions: Only a few online brokers can compete with Ally’s low commission of $4.95 on the trading of stocks and exchange-traded funds. Active investors qualify for the firm’s discount ($3.95 per equity trade) by making 30 or more trades per quarter or having a balance of $100,000 or more. Ally’s options trading contracts are similarly low at $4.95 plus 65 cents per contract (or $3.95 plus $0.50 per contract for active traders) with only one base charge per spread contract. And instead of charging forex traders commissions, transaction costs are based on spread markups, and accounts that have at least one trade within the past 90 days get access to free data.

Mutual fund investors will be disappointed that there are no transaction-fee-free funds available. However, Ally’s $9.95 commission for no-load mutual funds is far from onerous when compared with the $20 to $50 (and more) charged by other discount brokers. Even Ally’s $20 fee (plus regular commission) for broker-assisted trades and its low margin rates are hard to beat.

Account minimum: Ally’s $0 account balance minimum means there’s no roadblock to getting started.

Trading platform: Ally’s browser-based platform offers quick trading capabilities, real-time streaming quotes and data, a customizable dashboard, and access to all of the broker’s tools. Customers who frequently trade from various computers — home and work, for example — will appreciate this web-based platform, which doesn’t require any downloads. Ally Invest has also advanced the ability for customers to trade via mobile devices with the company’s apps, or to use a smartphone to access the web-based platform.

Investing research and tools: Ally offers a suite of investing tools that exceed expectations for a deep-discount broker. Its options trading tools are particularly strong and include an options pricing calculator to compare current bid/ask prices to forecast theoretical values, and a strategy scanner that identifies and executes option strategies based on criteria you choose.

Technical traders can dive into a suite of free tools powered by Recognia. Other free tools include a profit-and-loss calculator, a probability calculator (that uses implied volatility to determine your likelihood of hitting your targets) and the Maxit Tax Manager, which identifies tax implications of trading decisions (e.g., as short- and long-term gains and losses, wash sales) for planning purposes and generates on-demand 1099 forms.

Side note about data: Standard quotes are free to all customers, but free, real-time streaming data is available only to investors who trade more than 10 times per month.

Where Ally Invest falls short

Commission-free ETFs: In short, Ally has no commission-free ETFs, making the company a poor option for investors who want to gradually build up their position in ETFs because even the low $4.95 commission can add up and pare investment returns.

Mutual funds: The company offers more than 12,000 mutual funds, but unfortunately none of them are free of transaction fees. Ally’s commission for no-load funds is $9.95 (one of the lowest among brokerage firms), but investors would be better off using one of the other deep-discount online brokers — such as E-Trade, Merrill Edge or Interactive Brokers — which offer thousands of funds with no transaction fees. (See our roundup of the best brokers for mutual fund investors of all types.)

No physical branches: Plenty of brokers have an online-only presence, but it’s worth pointing this out here for beginner investors who may feel more comfortable knowing they could visit a branch office for hands-on help. That said, Ally offers online and phone customer support 24-7.

Ally Invest vs. similar brokers

Trade Fee
$4.95
$4.95
Account Minimum
$0
$0
Promotion
$200
$200
in cash bonus with a qualifying deposit
Trade Fee
$6.95
$6.95
Account Minimum
$500
$500
Promotion
60
60
days of commission-free trades with a qualifying deposit
Trade Fee
$6.95
$6.95
Account Minimum
$0
$0
Promotion
$100-$600
$100-$600
in cash bonus with a qualifying deposit

How Ally Invest stacks up

Ally is one of our top low-cost options. Its robust trading platform and lineup of free research, data and analysis tools put it at the level of some of its better-known competitors in the active trading space, at a lower price.

The bottom line

If you’re an active trader focused on costs, then Ally Invest could be a great fit. Even if you’re not, Ally will probably still fill the bill for you, with competitive commissions, helpful trading tools, and an easy-to-use trading platform. Plus, with no account minimum, it’s easy for beginners to get started. So Ally competes favorably for new investors and those investors looking to trade. Those looking to buy no-transaction-fee mutual funds and ETFs, however, may find a better home at another broker. Everyone else, though, should at least give Ally the once-over.

 

Dayana Yochim is a staff writer at NerdWallet, a personal finance website.  Email: dyochim@nerdwallet.com. Twitter: @dayanayochim.