Investing your money and reaping the benefits of compound interest can be a powerful way to build wealth.

As an example, if you put $10,000 in a mutual fund and left it there for 20 years, earning an annual rate of return of nine percent, you’d have over $56,000 in your account – even if you never added another dime to the investment.

If you took that same investment and added a monthly contribution of just $100, you’d have a portfolio balance of nearly $120,000 after 20 years.

There’s no question that investing properly can help grow your money exponentially, however choosing the right investment firm can be tricky.

Many firms charge high brokerage fees that swallow up your investment profits.

In order to help you navigate the seas of investment brokers, here is a review of Ally Invest, a brokerage firm committed to helping investors keep more of their investment returns in their own pocket.

Ally Invest
4.5

Summary

Ally Invest is an online discount brokerage firm. The company is growing quickly and even recently acquired the well-known investment firm, TradeKing. They offer low fees and no minimums for investors.

Who is Ally Invest?

Ally Invest is an online discount brokerage firm. The company is growing quickly and even recently acquired the well-known investment firm, TradeKing.

Investors can buy and sell securities such as stocks, bonds, mutual funds, options, exchange traded funds (ETFs), IRAs, and more… which can be traded on their electronic trading platform.

Ally Financial is a bank and investment firm that works to help clients grow their money faster. Ally Bank pays some of the top interest rates in the country, including a 1.20 percent rate on their online savings accounts rates of well over 1% on most CDs.

Ally Financial was a brick and mortar bank in the Philadelphia area for many years, but their transition to servicing clients online for all banking needs has helped them expand their reach and benefits with clients around the country.

For people who are already Ally customers, this new venture into online banking gives its customers the ability to view their savings and checking accounts, but also seamlessly integrates their checking and savings accounts with their managed direct account and their Ally Invest brokerage account.

This gives Ally customers the convenience of managing all their Ally accounts all in one place, and wouldn’t we all love to have more time on our hands by being able to streamline our tasks?

Trading Fees

So what does Ally offer that other investment firms might not? You can’t talk about trading without talking about the fees. It’s how these companies make their money in the first place. Let’s talk a little bit about the trading fees.

Depending on your level of investment knowledge, you may be making several trades on a daily or weekly basis. If that’s you, then this can be a big deal, as the trading fees add up relatively quickly.

What are trading fees and how does Ally Invest stack up?

Trading fees are the price you pay to complete a trading transaction. In this case, we are talking about stocks, ETFs, options, and bonds.

Every investment firm has set prices on how much they charge a client for a trading transaction. For instance, a typical trading fee could be anywhere from $5 per transaction up to $20 per transaction or more.

Even if you’re making infrequent trades on your investments, a $15-per-transaction difference could make a serious dent in your portfolio balance.

If you are a frequent trader, however, those extra fees could add up to tens of thousands of dollars in investment losses over the years.

Fortunately, Ally Invest has really competitive trading fees when it comes to these types of trades.

Fees for Stocks

  • $3.95 per trade if you do 30 trades or more per quarter
  • $4.95 per trade if you do less than 30 trades per quarter

This is a bargain because many other brokers charge around $10 or more per trade. So even if you’re a light trader you can save a couple hundred bucks a quarter to invest in more stocks.

For example, let’s say you make 10 trades per month on your investment portfolio. The difference between other firms’ $19.95 trades and Ally’s $3.95 trades is a whopping $160 in fees each month.

I won’t go into too much detail about option or bond fees, but I will tell you that Ally has very competitive prices on those types of trades as well.

Here are their current fee prices on bonds and options.

Fees for Options

  • $0.50 per contract $3.95 per base if you do 30 trades or more per quarter
  • $0.65 per contract $4.95 per base if you do less than 30 trades per quarter

Bond fees

  • $1 per bond $10 min.

Does Ally Invest have Financial Advisors?

When it comes to investing, we can tend to make decisions based off of emotions and not necessarily sound financial principles. Because of this, it is worth considering hiring someone to manage your investment account for you based on your long-term financial goals.

This way, when the market fluctuates, you have someone to talk you through the best financial decision to make and may be less likely to make emotional decisions when it comes to your investments.

While some brokers charge over 1% of assets under management, Ally Invest only charges .30%. Yes, that is their fee for managed investment accounts where customers can talk to a representative 24 hours a day, 7 days a week online or via phone.

It may sound like a small thing, but I assure you it’s not. This can save you thousands of dollars over the long haul, so you definitely want to be aware of the fees that financial advisors charge when hiring someone.

How to access your Ally Invest account

Not only can you see your investments by logging in on a computer, but they have apps for Android and IOS devices as well. This makes trading and viewing your portfolio even easier, as you can trade a stock sitting in your lazy boy chair and watching TV if you want to.

Obviously, it’s not smart to manage your investments without being focused and alert as mistakes can be made as I’ve learned first hand.

I recall one time I was transferring money from my bank account to my investment account. Then I placed a trade that was going to be covered by the money being transferred in. However, because I was in a hurry and not paying attention, I transferred the money into the wrong account.

This caused some fees and a lot of anxiety. So although apps make it easier to place trades, it is also important to make sure that you are focused on the task at hand so that this never happens to you.

As an FYI and this is also in the fine print:

Ally Invest has a $30 returned ACH fee and a $30 returned wire fee. So it’s important to have a handle on your accounts when you’re moving money around.

Ally Invest makes trading easy and convenient with their secure online system and lower fees, but it’s still up to you to be a responsible account owner.

Minimum Requirements

There is no money required to open an account, which means you can get started investing today with Ally’s self-directed trading account.

If you decide to have Ally Invest manage your account for you, then there is a $2,500 minimum investment.

Ally’s no-minimum investment for opening a self-directed trading account is among the lowest in the industry.

Compare that with some of the other self-directed trading platforms and you’ll see that the minimum investment range just to get started ranges from $500 – $2,500.

This makes it very easy for a new trader to get started without a lot of money.

Customer Service

While many brokers have limited hours where you can actually speak to a live person, Ally Invest actually offers 24/7 customer service.

This is awesome because while most brokers offer customer service during banking hours, you can reach a real person any time of the day.

Other Cool Tools

As mentioned above they do have apps for IOS and Android. But one of the coolest features is Ally live which has a ton of trading tools along with roughly 80 performance indicators for you to use with your trading.

Ally’s customized investing features are great for helping all levels of investors manage their accounts well.

Even better, you also get access to a community of other stock traders where people talk strategy and market trends, which will help you learn a lot about investing.

Charts and Watchlists

Ally Invest has six different charts with almost a hundred chart studies to help analyze the performance of stocks. The interactive charts allow you to change settings for pricing studies and your own customized analysis.

The site uses a variety of interactive calculators designed to help you make the most of your trades.

You can also create your own watchlists to follow market data and segment your own Securities.

Ally also keeps you aware of what’s going on in the market with live news and streaming quotes.

Account Protection

Similar to how the FDIC protects your your bank account for up to $250,000, your investment account is protected by the Securities Investor Protection Corporation (SIPC) for up to $500,000.

SIPC account protection was designed to help protect investors from firms that aren’t operating legally. However, this does not mean that if you invest in a specific company and that company goes bankrupt, you get your money back.

It means that if Ally Invest were to go under that your assets would be protected for up to $500,000.

Ally Invest’s Awards

Since there are so many options to choose from when it comes to investment brokers, it helps differentiate brokers that receive awards for the services that they offer.

Awards given by independent investment watchdog groups help clients know which investment firms are best servicing their customers.

Here are some awards and acknowledgments that Ally Invest has received:

  • NerdWallet – Best Low-Cost Broker
  • StockBrokers.com – Best in Class in “Commissions and Fees” 2016
  • Barrons – 4 stars from 2007-2016
  • StockBrokers.com – Best in Class in “Offerings of investments” 2016

Summary: Ally Invest is Worth It

So whether you are looking to get started in investing or are a seasoned investor, Ally Invest is worth consideration because of their low fees, 24/7 customer service and $0 minimum balance for opening an account.

With a minimum opening account balance of $0 Ally’s self-directed trading account can be a great choice for those looking to get started investing and building a stock portfolio.

Do you have an investment account? If so, please share your experience in the comments below.

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