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Ally Invest IRA Review: ROTH / Traditional IRA, SEP, Simple, 401k Rollover Retirement Accounts Fees and Cost 2020



Overview of Retirement Accounts at Ally Invest


Did you know that Ally Bank operates a brokerage firm called Ally Invest? And did you know the broker offers Individual Retirement Accounts? If you’re thinking about opening a retirement account, you really should consider Ally. It has several strengths in the IRA department, but we also found some weaknesses. We’re going to tell you everything you need to know about the pros and cons of retirement planning at Ally Invest, so pay attention.


IRA Types at Ally Invest


Ally Invest offers Roth, Traditional, SEP, Custodial, and SIMPLE IRA’s. We did not find an Inherited account. An old employer’s retirement plan can be transferred into any of the broker’s available IRA’s.

Ally Invest imposes no annual fee, low balance charge, or other recurring fees for IRA’s. The brokerage firm does charge $25 to close a retirement account. Transferring one out of Ally incurs an additional $50 fee, for a total of $75.


How to Open an IRA at Ally Invest


If you find an IRA you like, it’s pretty easy to open it. Just click on their promotion link: Up to $3,500 cash bonus + commission free trades. You’ll be given two choices: self-directed trading and managed portfolios. The first option means you will make all trading decisions, while the second might or might nor carry an asset-based fee for the broker’s robo advisor (more on that later).

If you choose the self-directed option, you’ll need to supply your vital data if you don’t yet have an account with Ally. If you choose the managed portfolio option, you’ll first need to fill out an investment profile.


Ally IRA Fees


IRA’s With Ally Bank


It’s also possible to open an IRA with Ally Invest’s sister company Ally Bank. As the name suggests, this is the banking division of the company. It offers the same IRA’s as the brokerage division except the SIMPLE account. Funds can be deposited into savings accounts or CD’s. Currently, they pay between 2.2% and 2.75%, all of which are FDIC insured.

It would also be possible to open an IRA with each Ally division and split the $6,000 maximum IRA annual contribution limit between them.


Other Accounts


In addition to Individual Retirement Accounts, Ally Invest offers other account types that may be of interest to retirement savers. The Coverdell Education Savings Account is available through the brokerage firm. Trust and estate accounts can be opened as well. The brokerage firm does not offer 529 plans, annuities, profit-sharing plans, or a self-employed 401(k) option.


Ally Invest IRA Account


Retirement Education and Services


Ally Invest’s website has a learning center with some educational resources. We found a few articles that may be of help to retirement savers. There’s a video on how to build a CD ladder, for example. There is also an article on the broker’s site about inflation’s impact on investing.

Most of the resources we found were dedicated to investing in general. Topics include how to trade options or read a stock quote.


Retirement Investments


Once you have your IRA at Ally Invest open, there are a number of investment choices you will have. Besides stocks, the broker-dealer also provides ETF’s. All ETF's now have $0 commission. Many would work well in a retirement account, including USRT, the iShares Core U.S. REIT fund, and DLN, the WisdomTree U.S. LargeCap Dividend ETF.


Ally Invest IRA Review


During our investigation, we found a long list of 13,000 mutual funds. On this list, there are 537 target-date mutual funds. These are investments designed for retirement saving. Their portfolios become more conservative as the retirement date approaches. Some of the fund families we found include Allianz, American Century, Fidelity, and JPMorgan.


Ally Invest Promotion


Up to $3,500 cash bonus + commission free trades.

Open Ally Invest Account


Managed Portfolios


If you’re not comfortable making your own investment decisions, Ally offers a robo-advisory service for IRA’s (excluding SEP and SIMPLE varieties) that costs 0.0% or 0.30% per year. This is a fantastic option if you need some retirement guidance on a budget. The broker requires a small $100 minimum opening deposit. In return, you get the company’s computer algorithm, which trades low-cost ETF’s. The software program makes decisions in part on your risk tolerance, time horizon, and investment goals.


Ally IRA Managed Investing


Another great feature of Ally Invest’s computerized management is that the system automatically rebalances a portfolio periodically so it stays in line with asset allocations.


Comparison


When looking at some of Ally Invest’s rivals, we see both strengths and weaknesses in the IRA category. For example, E*Trade offers more IRA types. These include the Complete IRA, designed for persons over the age of 59½, and the Beneficiary IRA for inherited assets. At the same time, E*Trade has several $25 IRA fees that Ally doesn’t have, such as an excess contribution removal fee and an early withdrawal fee.

While Ally Invest still has an IRA closeout fee, several brokers have eliminated them. These companies include Fidelity and TD Ameritrade. On the flip side, Merrill Edge charges twice as much as Ally does.

As for investments, Ally Invest offers much larger selection of mutual funds than Charles Schwab. It also charges very low commission on mutual funds of just $9.95 - five times lower than Schwab.

One strong point Ally Invest has compared to many of its rivals is banking IRA’s with its sister company. Most brokerage firms don’t offer these, which means a bank IRA can’t be linked to one of its investment accounts. TradeStation would be one example.


Judgment and Recommendations


Ally Invest does a good job offering retirement accounts at an affordable price. We definitely recommend the broker-dealer for retirement savers who plan to trade frequently or who will have a large balance.

If the lowest possible commission schedule is of paramount importance to you, then Ally Invest is one of the best options on the market.


Open Ally Invest IRA


Up to $3,500 cash bonus + commission free trades.

Open Ally Invest Account