Ally HYSA

What is a high Yield Savings account?

High yield savings accounts are a great option for people looking to earn more interest on their savings. Compared to traditional savings accounts, high yield savings accounts offer significantly higher interest rates, allowing savers to grow their money faster. The national average interest rate for savings accounts is currently around 0.06%, while top high yield savings accounts offer rates of 2% or more. This difference really adds up over time.

The main benefit of high yield savings accounts is that they can help your money keep pace with inflation. With inflation averaging around 2-3% per year, money in a regular savings account is actually losing purchasing power over time. But with an interest rate of 2% or more, your money in a high yield savings account will grow faster than the rate of inflation. This makes it a smarter place to keep emergency funds, savings goals, or any cash you don’t need immediate access to.

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High yield savings accounts function similarly to traditional savings accounts. Your money is FDIC insured, there are no monthly fees, and you can easily transfer funds between a high yield savings account and your everyday checking account as needed. The key difference is simply the higher interest rate.

What is Ally Bank?

As an online bank, Ally operates digitally without any physical branch locations. This helps reduce overhead costs that can then be passed on to customers through higher interest rates on deposit accounts. Ally also offers 24/7 customer service via phone, email or chat.

Ally markets itself as a customer-friendly bank that aims to provide an easy and transparent banking experience. It frequently ranks highly in surveys for customer satisfaction. Ally has also won awards for its high interest rates on savings and excellent customer service.

Ally Bank first opened its doors in 2009 as an online-only bank offering deposit accounts and loans to consumers nationwide. Ally has grown significantly over the past decade and now has over $100 billion in deposits. It provides a wide range of banking products including checking, savings, money market accounts, certificates of deposit, mortgages, auto loans, investing and more.

Ally High Yield Savings Account Overview

The Ally High Yield Savings Account offers a competitive interest rate with no minimum deposit or monthly fees. Here are some key features:

  • Interest Rate – The savings account interest rate is currently 0.50%, which is much higher than the average savings account rate of 0.06%. The interest rate is variable, so it could change in the future based on market conditions.
  • Minimum Deposit – There is no minimum opening deposit required to open an Ally High Yield Savings Account. You can open the account with any amount.
  • Monthly Fees – The Ally savings account has no monthly maintenance fees or minimum balance requirements. There are also no fees for transfers or incoming wires.

The high interest rate and lack of fees make the Ally High Yield Savings a strong option for building your savings. The interest compounds daily and is credited monthly to your account. Just keep in mind that the rate is variable, so it could decrease if interest rates drop.

Photo by Ally

Interest Rate and APY

The Ally High Yield Savings Account offers one of the highest interest rates and APYs available right now. The interest rate is currently 4.20 as of May 2024.

This is significantly higher than the average savings account interest rate, which is only 0.17% APY according to the FDIC. Ally consistently offers rates that are over 20 times the national average for savings accounts.

The high interest rate and APY is a major draw for the Ally High Yield Savings Account. It allows customers to earn much more interest on their savings compared to a traditional savings account.

For example, if you had $10,000 deposited in this Ally savings account, you would earn approximately $420 in interest per year at the current 4.20% APY. That’s over $400 more in interest than you’d earn with the average 0.17% APY savings account.

The interest rate and APY on this account can fluctuate, but Ally tends to be competitive and regularly ranks as one of the top high yield savings accounts. The rates are variable, so they could go up or down depending on the market. However, this account virtually always offers significantly higher returns compared to standard savings accounts.

See how Ally Compares to Traditional savings accounts

Photo by Allly

Fees

Ally Bank’s high yield savings account has no monthly service fees or minimum balance requirements, making it very consumer-friendly compared to traditional brick-and-mortar banks. There are no charges for opening or closing the account either.

The only fees associated with Ally’s high yield savings are:
  • Outgoing wire transfer fee – $20 per domestic wire, $40 for an international wire
  • Overdraft fee – $25 per overdraft. However, overdraft protection can be set up by linking to an Ally checking account.
  • Excessive transaction fee – $10 per transaction after 6 per monthly statement cycle. Federal banking regulations limit savings accounts to 6 withdrawals or transfers per month.
  • Returned deposit item – $25 for each returned check or ACH deposit.

So there are minimal fees overall. Customers can easily avoid wire transfer, overdraft, and excessive transaction fees. The lack of monthly fees or balance requirements makes it an affordable option.

Accessibility

Ally Bank is an online-only bank, meaning it does not have any physical branch locations. This can make it less convenient for those who prefer in-person banking. However, Ally offers robust digital banking capabilities through its website and mobile app.

Some key accessibility features of Ally Bank include:
  • Online and Mobile Banking – You can manage your Ally accounts fully through the online banking portal or Ally Mobile app. These allow you to check balances, transfer funds, pay bills and deposit checks via mobile.
  • ATM Access – While Ally has no ATM locations, you can use any Allpoint ATM nationwide for free withdrawals. Allpoint has over 43,000 ATMs across the United States.
  • 24/7 Customer Support – Ally Bank offers customer service by phone or chat 24 hours a day, 7 days a week. So you can get assistance whenever needed.
  • External Account Transfers – You can electronically transfer funds to and from accounts at other banks. This allows you to seamlessly move money.

Overall, Ally Bank provides robust digital access to your accounts. The lack of physical branches may be inconvenient for those who prefer in-person banking. But their online, mobile and ATM access offers flexibility for most customers.

Pros Of ally HYSA

The Ally High Yield Savings Account shines in several key areas that make it an attractive option.

High APY

The standout feature of this account is the interest rate and APY. Ally offers a very competitive APY that is typically among the highest in the industry for savings accounts. The APY is variable but has historically stayed at elevated levels compared to other banks. This allows your money to grow faster.

No Fees

Another major perk is the lack of fees. There are no monthly maintenance fees or minimum balance requirements. This eliminates extra costs that can eat into your returns at some other banks. You can open the account with any amount and there are no hidden charges.

Good Accessibility

Ally also provides solid accessibility for managing your savings. You can easily manage the account online or via mobile app. Transfers between Ally accounts are instant. External transfers take 1-3 business days. Ally has strong digital tools and customer service available if needed.

Cons of Ally HYSA

The Ally High Yield Savings Account does have some downsides to consider.

Limited ATM access

Ally has no brick-and-mortar branches, so you can only use Allpoint ATMs for free withdrawals. This network has over 43,000 ATMs nationwide, but it’s still more limited than large national banks.

No cash deposits

To add money, you need to transfer it electronically from another bank account. You cannot deposit physical cash into this account.

Lower interest rates than some competitors

While Ally offers very competitive rates, some online banks like SoFi may edge them out slightly. Make sure to compare rates thoroughly.

So while the high interest rate is appealing, the lack of physical branches, checking features, and cash deposit abilities could be dealbreakers for some customers. It’s best for savers who primarily need an online account for cash savings and don’t need to frequently withdraw money.

Verdict

The Ally High Yield Savings Account offers some appealing benefits for customers looking to earn a competitive interest rate while keeping their money relatively accessible. With its high APY, no minimum balance requirement, and no monthly fees, it’s easy to see why the Ally savings account is attractive. The main downsides are the lack of physical branches and ATM access compared to brick-and-mortar banks.

Overall, the Ally High Yield Savings Account is a solid choice for customers who prioritize earning a high interest rate and want the flexibility of easy online access. It’s a particularly good fit for savers able to maintain a cushion in their checking account for immediate spending needs. The high APY and no hidden fees make it more beneficial than keeping your savings at a traditional bank.

Unless you need regular in-person banking and cash deposits, the Ally account’s upsides seem to outweigh the inconveniences. For most people looking to maximize interest earnings on their savings, the Ally High Yield Savings Account is definitely worth considering.

Disclosure: This post may contain affiliate links, meaning we receive a commission for purchases made through these links, at no cost to you.

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