Luisa Rollenhagen is a journalist and investor who writes about financial planning for Wealthsimple. She is a past winner of the David James Burrell Prize for journalistic achievement and her work has been published in GQ Magazine and BuzzFeed. Luisa earned her M.A. in Journalism at New York University and is now based in Berlin, Germany.
Online banks are becoming increasingly popular, and for good reason. Keeping all operations online means that banks save loads of money when it comes to overhead costs, since no brick-and-mortar location means they don’t need to pay for things like rent, furniture, or bank tellers. And those savings go right back round to you, resulting in low-to-no cost accounts and higher interest rates when it comes to savings accounts. As we’re increasingly turning to the Internet for most of our day-to-day activities and needs (looking at you, 30-minutes-or-less food delivery apps), it’s obvious that banking is moving toward the online-only game. After all, who has time to put on pants and walk to the bank and wait in a queue and actually talk to a person when you can just sit on your sofa, authorize deposits and transfers online, and not put on pants? So when the auto financing company General Motors Acceptance Corporation (GMAC) wanted to offer online services, they ended up creating Ally Bank, an online-only one-stop-shop for many financial needs.
What is Ally Bank and is it available in Canada
Ally Bank was officially christened in 2009 and is headquartered in Detroit, Michigan. They offer a wide range of online-only banking services, including CDs (a type of federally insured savings account), savings accounts, checking accounts, credit cards, and Roth, SEP, or traditional IRAs. They’ve also stayed true to their roots with General Motors by continuing to offer auto loans, as well as home purchasing and refinancing loans. And since they’re really committing to being a one-stop-financial-needs shop, they’ve also started offering investing services. Ally either offers robo-advisor services through managed portfolios that invest in ETFs, or also gives more hands-on investors the option to open a trading account where you can trade directly in ETFs, stocks, bonds, and mutual funds.
While basic banking with Ally doesn’t cost anything, you will have to pay if you access more features. You’ll have to pay commission on certain trades if you choose to use Ally’s investing platform, and monthly maintenance fees for the portfolio. But in terms of banking, you’re getting the biggest benefits of online-only banks: No monthly fees, no minimum balances, and higher-than-average interest rates. For Ally’s savings account, you’re looking at a 2.10% annual yield, and for their checking account you’re looking at a 0.10% annual yield.
Ally Financial, the parent company that runs Ally Bank, used to be present in Canada, but in 2013 the Canadian operations were bought up by the Royal Bank of Canada and its operations were integrated into the national bank. Since then, Ally as it currently exists doesn’t operate in Canada anymore and only exists in the United States.
Other financial institution available in Canada
Although Ally Bank isn’t available in Canada anymore, a lot has happened in the online-bank world since Ally was founded in 2009. Online-only banks have proliferated and the competition has driven companies to offer competitive rates and top-notch services. One of those financial institutions is none other than… well, us! At Wealthsimple, we believe that a vital component of any healthy financial foundation is planning efficiently for the future. That’s why Wealthsimple offers personal and joint investment accounts that are managed for you and consist of low-cost ETFs for maximum diversification and steady growth.
Are there any limitations to Wealthsimple?
Wealthsimple is more focused on helping you achieve your financial goals through investing and saving, which we firmly believe that investing and saving are an essential part of a balanced budget. Get started with Wealthsimple in just 5 minutes and benefit from state of the art technology, low fees and friendly financial advice — sign up now.
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