A few weeks ago, we received a letter saying that GMAC Bank had been re-branded as Ally Bank. We actually opened a GMAC account last fall (more on this below), so I was quite interested when I heard this news.
If you’re in a rush, and just want the executive summary, here it is:
Ally Bank is a great online savings option. They’re FDIC insured, they offer a wide variety of products, they don’t have any minimum deposits or balance requirements, and they don’t have any account maintenance fees.
If you’d like more info, read on…
A short history of GMAC/Ally Bank
The GMAC brand actually goes back to 1919 when GMAC Financial Services was established as a wholly-owned subsidiary of General Motors to provide financing for automotive purchases following WWI. GMAC eventually branched out into retail banking, offering savings account, certificates of deposit, money market accounts, etc. under the GMAC Bank brand.
In 2006, GM sold a majority stake in GMAC to private investors, thereby providing a bit of distance between the now-bankrupt automaker and the financial services company. Nonetheless, the name stayed, and consumers no doubt wondered about the stability of the bank given its apparent connection to GM. Hence, the name change — Ally Bank.
Having logged in and poked around, it appears that little else has actually changed — and that’s a good thing. Their rates are still highly competitive, and the web interface is as convenient and functional as ever.
Ally Bank products and rates
We were first attracted to Ally Bank last fall by their high CD rates. At the time, we were looking to set up a five year CD ladder, and we also wanted to keep things fairly simple. We were thus pleased to see that Ally offered the highest rates across all maturities.
One particularly interesting product is what they refer to as their “no penalty CD.” This CD allows you to lock in a great rate (though not quite as high as with a traditional CD) while still retaining the flexibility to break the CD without penalties. Thus, if an emergency arises, or if rates simply raise, you’re covered.
Note that they also have a highly competitive online savings rate, as well as a slightly lower (but still high) money market account rate just in case you want a check card and check-writing ability.
When it comes to online savings accounts, I look at one thing above all others — the interest rate. Nonetheless, it’s still nice to be able to reach out and touch an actual human being if/when trouble arises.
The good news here is that Ally not only publishes a customer service phone number in the top right corner of the page, but they also disclose the expected wait time right next to the number (see below).
I just tested the system at 9:10 AM Eastern on a Monday morning and, sure enough, they picked up less than 10 seconds after I indicated that I wanted to speak to a CSR.
If you’re looking for an excellent online bank with highly competitive rates, you should seriously consider Ally Bank. We’ve been very happy with them over the past eight months or so, and have actually been thinking about opening another account with them to hold cash for a trust that my wife and I manage.