Don’t be fooled – Ally Invest, a new low-cost provider, is simply TradeKing by another name. In June of 2016, Ally Financial Inc. seized TradeKing and the merger of their unified businesses launched in May of the following year.
Similar to TradeKing, Ally Invest has all the features that put it at an advantage next to its fellow brokerage firms, including automated portfolio management and Forex trading.
Ally Invest: Did You Know?
- The commission rate is $4.95
- The account minimum is $0
- Based on trade volume, discounts can be made available
When Should You Use Ally Invest?
- Ally Invest is best if you’re an active trader, an options trader, or a Forex trader.
Areas in Which Ally Invest Excels
Commissions rates: With a low commission rate of $4.95 on the trading of exchange-traded funds and stocks, there are only a few online brokers who can compete with these rates. If you make 30 or more trades per quarter or maintain a balance of $100,000, active investors are eligible for Ally Invest’s discount of $3.95 per equity trade. Similarly, Ally Invest’s option trading contracts are at a rate of $4.95 plus 65 cents per contract, or, for active traders, $3.95 with $0.50 per contract.
Additionally, instead of Ally Invest charging Forex traders commissions, transaction costs are based solely on spread markups. Also, accounts with at least one trade within the past 90 days are eligible for access to free data.
If you are a mutual fund investor, you might be disappointed as there are no transaction-fee-free funds. That said, Ally Invest’s $9.95 commission for no-load mutual funds is quite reasonable in comparison to the $20 to $50 charge at other discount brokers. Don’t forget about Ally’s $20 fee for broker-assisted trades and its low margin rates – now that is hard to beat!
Minimum account balance: With a $0 account balance minimum, there is nothing stopping you from getting started!
Trading platform: With a browser-based platform, Ally Invest offers its clients quick and easy trading capabilities, real-time quotes and data, an adjustable dashboard, and access to a variety of tools. If you are someone who trades from various computers, at home or at work, you will love Ally’s web-based platform. Additionally, Ally Invest lets customers trade on the company’s app or you can use a smartphone to access the web-based platform.
If you are a technical trader, there are a variety of free tools that you can use which are powered by Recognia. Other tools that you can use are as followed: a profit-and-loss calculator, a probability calculator, and the Maxit Tax Manager (this identifies tax implications of trading decisions).
Before moving on, it’s important to note that standard quotes are free to all clients but if you are looking for free, real-time streaming data, then you have to be an investor who trades more than 10 times per month.
Disadvantages of Ally Invest
Commission-free ETFs: Unfortunately, Ally Invest is not the right fit if you are an investor looking to build up your position in ETFs as Ally offers no commission-free ETFs. Even a commission rate of $4.95 can add up.
Mutual funds: Though Ally offers more than 12,000 mutual funds, none of them are going to be free of transaction fees. Despite Ally’s $9.95 commission rate for no-load funds, investors would benefit even more by using another discount online broker such as E-Trade, Merrill Edge, or Interactive Brokers.
No on-site branches: It’s important for beginner investors to be able to visit a branch for hands-on help as it can be a confusing process to learn. That said, Ally offers 24/7 online and phone customer support.
Ally Invest Stacks Up
As one of the top low-cost options for a brokerage, Ally Invest offers advanced trading platforms, free research, and data and analysis tools. All of this puts it at the same level as some of the more advanced firms, just at a lower price.
What It Comes Down To
Here’s the bottom line: you will be pleasantly surprised with just how much you can get for so little at Ally Invest. This includes low commission rates, high-quality research, and various tools and platforms. Due to Ally Invest’s lack of trading-fee-free mutual funds and ETFs, those leaning towards fund investing might want to consider another option. However, these shortcomings won’t matter to the majority of active investors.
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