Ally vs Charles Schwab: Which one Is The Best Broker For You?

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Ally Financial Services and Charles Schwab provide a lot of investing and banking services. Somehow, they manage to do it successfully at minimal charges. To compare these two financial powerhouses, we must limit the range of items we seek to evaluate.

We have opted to go further into the investment aspect of these brokers while taking a brief look at their banking solutions. Unlike Ally Invest, Charles Schwab provides a broader range of investing possibilities.

Stock Trading, Fractional Shares, Options Trading; Mutual Funds; Futures Trading; Advisor Services; International Trading are all available to investors through Charles Schwab. Ally Invest has 19024 options for mutual funds, while Charles Schwab has 10228.

Although Charles Schwab is more well-known, Ally Invest offers many of the same goods and services. And with banking tools, both businesses are more than just brokers

Ally Financial Services Overview

Ally Financial was founded in 1919, more than a century ago. However, they were founded under a different name. The firm was previously called the General Motors Acceptance Corporation, or GMAC. The financial institute’s original purpose was to assist consumers with vehicle finance.

By the 1980s, the company’s product line had grown significantly to include a broader range of client options. In addition to car lending, they also offered motor vehicle insurance and home loans. Fraud troubles cost the corporation a great deal of money in 1991. The firm continued to function and soon returned from the loss.

In 2000, a direct bank, GMAC Bank, was created. And in 2006, the company was sold to the private equity firm Cerberus Capital Management for a share. This was the tipping point for significant shifts. By 2009, the firm was renamed Ally Financial.

In recent years, Ally Financial has pioneered internet banking and investing operations. Ally Invest, the company’s partner product for Ally Bank, provides services comparable to Charles Schwab Bank’s. Ally Invest is a low-cost discount stockbroker worth considering for knowledgeable investors.

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Ally Invest is a competent brokerage solution likely to satisfy consumers’ expectations. It’s still a good choice for existing Ally Bank clients who like to do their online banking. Stocks, bonds, and ETFs all have minimal trading charges, and the company’s option commissions are among the lowest in the market.

On the other hand, the broker does not provide any no-transaction-fee (NTF) products, which will upset investors in mutual funds. Ally Invest, on the other hand, is a terrific option for people who want to consolidate all their financial affairs in one location and access excellent customer support.

People looking to invest in mutual funds may do better working with brokers who provide many options for investing in no-fee mutual funds

Charles Schwab Overview

Charles Schwab gives investors a full range of goods and services with exceptional stock research, excellent trade tools, and expert planning. Everything from stock and options trading to fixed income and retirement planning is available through this company.

Because it caters to a wide range of financial needs, Charles Schwab is our top pick for the best overall brokerage for new investors. Not only does it allow you to manage all of your banking and investments with one login, but its investment tools are also structured so that they can develop with you as you learn more and improve your trading strategies.

Self-directed traditional brokerage and retirement accounts are available to clients who handle their assets, with no fees for stock or ETF trades. These accounts have no fees and no minimum balance restrictions. Schwab also provides a robo-adviser, Schwab Intelligent Portfolios, that will handle all of your assets for you at no further price. But you’ll need at least $5,000 to utilize this account.

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With Schwab Intelligent Portfolios Premium, you can take your automated investing one step further. This account combines robo-advice with limitless counseling from a certified financial planner (CFP) (CFP). Remember that you’ll need at least $25,000 to get going. The initial planning charge is $300, and the monthly maintenance fee is $30. Schwab is sure to have a solution for your future demands, no matter what they may be.

 

Ally Financial Services vs. Charles Schwab Service & Feature Comparison

Costs

While Ally Invest is an online brokerage business of Ally Bank. They provide fee-free investment for managed portfolios and for self-directed trading. In addition to stocks, the website allows users to invest in ETFs, mutual funds, bonds, and options contracts.

The account fees are unusual for today’s brokers because they are so high. Ally still charges a $25 cost for closing an IRA. An extra $50 will be charged if the account is transferred. A $50 fee is also charged for a partial account transfer. Any total or partial transfer on a basic account will cost you $50.

Ally’s basic fee of $4.95 places it on the leader board for stock trading, and the business reduces that charge to $3.95 for clients who make at least 30 trades a quarter. Ally also charges a modest $9.95 to purchase or sell mutual funds. Though it still doesn’t beat fee-free. And it does provide more than 12,000 mutual funds to pick from, so you’ll have an excellent opportunity to locate what you’re searching for there.

At Schwab, consumers with complaints can obtain a refund on all fees if they ask. To cover all commissions, consulting fees, and other expenditures, the business recently increased the scope of its “satisfaction guarantee.”

Trade with Charles Schwab

Education and Research

There is a wealth of information can be found on Schwab’s website. Videos, podcasts, essays, infographics, and slideshows are some mediums it uses to deliver its content. A wide range of subjects is addressed. 

Schwab also offers a newsletter called On Investing. Every three months, a new issue is released.

Stocks profiles at Schwab give a vast lot of information. In particular, we favor free third-party reports with trade recommendations from fewer than 8 analysts.

Ally Invests stock profiles contain a moderate quantity of information, including third-party reports like CFRA and Morningstar. No other analysts are used.

Ally Invest features an Information link at the top for general investing education. Going down this rabbit hole results in countless articles. There are only a few videos on Ally’s site, and we didn’t uncover any additional formats. On the good side, several articles on personal finance owing to Ally Incest’s affiliation with Ally Bank.

Another thing to highlight in this category: Schwab allows free streaming of CNBC business news. Ally Invest does not provide to stream any video financial news station.

Range of Investments

After completing your investment education, you’re now ready to put your knowledge to work. Inside your Ally Invest account, you’ll be able to exchange these products:

  • Fixed income
  • Equities (but not equities on foreign exchanges)
  • Mutual funds
  • ETFs
  • Option contracts
  • Forex
  • Precious metals

Regarding the currency and precious metal markets, Schwab has eliminated them. Still, it has added futures contracts, such as those for bitcoin and precious metals. To top it all off, Schwab offers clients access to many international stock markets through its worldwide account service. Schwab tops the list with 3,976 no-transaction-fee funds, with minimum investments below $50,000.

Trade with Ally

Schwab also provides 231 commission-free ETFs, the most of any broker in our analysis. The roster includes various low-fee index funds from Schwab and ETFs from organizations such as Guggenheim, PowerShares, State Street, and Wisdom­Tree. No-fee mutual funds and ETFs propelled Schwab to the top of the heap in this area.

Investment Advice

Brokers are so eager to manage your money that the majority will do it at no charge, including creating a financial plan and conducting an audit of your portfolio. They can also handle your money for a charge or aid with estate arrangements and insurance.

Brokers are so eager to manage your money that the majority will do it at no charge, including creating a financial plan and conducting an audit of your portfolio. They can also handle your money for a charge or aid with estate arrangements and insurance.

 

Schwab provides a service, charging a management fee of 0.28 percent for a tailored portfolio of ETFs developed with the aid of a client’s dedicated financial adviser. In addition, Schwab offers Intelligent Portfolios, which consist of pre-selected ETF baskets that are rebalanced regularly by the business at no additional cost to the investor. The drawback of these portfolios is that even the most aggressive ones—with substantial quantities of stock—hold 6.9 percent in cash (and much more in conservative portfolios) (and more in conservative portfolios). In a strong market, holding that much cash might reduce profits.

Retirement and IRA’s

Both Schwab and Ally Invest provide Individual Retirement Accounts. Besides Roth and Traditional variants, Schwab customers can open Custodial, Inherited, and Rollover variations. Schwab also provides trust, estate, and philanthropic accounts. To cater to small businesses and self-employed individuals, Charles Schwab provides SIMPLE and SEP accounts, a solo 401(k), and a personal defined benefit plan (PDBP).

Ally Invest offers the same IRAs as Schwab except for the SEP, SIMPLE, Custodial, and Inherited kinds. Ally Bank, an Ally Invest affiliate, offers SEP IRA account opening services. A trust account is available via Ally Invest, but there are no philanthropic or estate planning options. An individual 401(k) plan or a personal defined benefit plan does not exist in the United States.

Trading Platform & Website

When you decide on the asset you wish to trade, both brokerage firms offer websites and browser platforms that will do the process.

Ally Invests website is relatively straightforward and hasn’t been updated since its acquisition of TradeKing. Nevertheless, the order ticket does contain distinct buttons for sell short and purchase to cover. Market-on-close orders are another attraction. Trades may be sent to the exchanges easily using the site’s trading bar.

For the most outstanding trading experience, we recommend switching to the company’s browser platform. 8 graph types and several technical indicators are included in LIVE’s full-screen charting. We liked the tick-by-tick pricing activity despite the lack of right-click trading.

Although Schwab’s trade bar can’t send orders directly to the exchanges, it is a better-designed website. Click on the Trade link to access Schwab’s order ticket with trailing orders and extra options like all or none and no reduction.

Customers of Ally Invest can utilize Quotestream, a desktop application, if the browser-based options aren’t sufficient for them (review). The software contains a stock screener, watchlists, and sophisticated charting with technical analyses.

Forex traders can use MetaTrader 4 or an in-house currency platform developed by Ally. With the old application, it’s possible to view deals on a chart. Automated trading methods can be implemented using the latter.

Schwab offers one desktop platform, StreetSmart Edge. The program has several excellent capabilities, including live streaming of video news, good graphing, and direct-access routing. You may test out the software with no risk by using a sample login.

Trade with Charles Schwab

Mobile Apps

Both companies have mobile applications, so the tale of software is far from done. Ally does not have an Apple Watch platform.

Touch ID on the iPhone makes it a cinch to go into any broker’s app. Both applications link with other company branches, so they will show up if you have bank accounts.

The following are some of the app’s standout features:

  • Bill pay
  • Mobile check deposit
  • An AI named Schwab Assistant
  • Mutual funds
  • CNBC

Mutual fund trading and video news are not available on the Ally app. Mobile check deposits and Zelle transfers are only a few valuable things it offers.

Ally Invest doesn’t offer a specialized app for brokerage activities, unlike many brokers. Instead, the Ally Mobile app provides all corporate accounts and operations capability. For example, you can see all your accounts in one area — checking, savings, CDs, credit cards, and brokerage accounts. That’s a terrific option for people who already have an Ally account and want to keep their financial life unified.

This all-in-one software meets that bill perfectly and is straightforward to explore and use. You’ll be able to deposit checks, transfer funds between accounts, pay bills, check tax forms, use savings tools, find ATMs, and execute various other banking operations.

You’ll be able to make much more investment through the app. Streaming quotations, stock trading, and multi-leg options trading are tools you may use to keep an eye on your portfolio. Charting tools and market news are available to customers for performing technical analysis. Even if it lacks some of the more advanced capabilities of Ally’s trading platform, it does its job when you cannot be in front of a computer.

Other Features

Integration

Ally Invests is an incentive for current Ally clients. The smartphone app may combine all of their bank accounts into one organization. That’s a terrific way to speed up money transfers across accounts, such as between a bank and a broker. When it comes time to file your taxes, having all your financial information in one location might be beneficial. Ally Invest might feel like another tab on the Ally website’s dashboard.

Ally Invest Robo Portfolios is another choice for individuals who want to automate their investments. Robo Portfolios will invest depending on your goals and automatically rebalance your account daily for just a $100 minimum commitment.

Customer support

Ally definitely shines here. The broker provides 24-hour phone assistance and an online chat option to quickly get you in touch with a representative. It’s also possible to communicate by email, for example. However, there is no branch location for clients to go to for help. However, most investors are unlikely to be put off by this last argument.

There is 24-hour customer service at both brokerages in this study that we’ve examined. Regarding in-person customer support, Schwab has a vast network of branch offices, whereas Ally Invest does not.

Cash Management

As a broker-dealer and a bank, Schwab is well-rounded. In addition to checking and savings accounts, the bank offers an investment account that may be connected to these accounts. A debit card and checks are included with the checking option. To show its generosity, Schwab offers limitless reimbursements for ATM fees, and this policy applies to all cash machines across the world.

Ally Invest clients must achieve specific balance requirements to get checks and a debit card. As a result, Ally Bank provides checking and savings accounts that may be paired with an investment portfolio. Ally Bank money market accounts provide up to $10 monthly ATM rebates.

Trade with Ally

Banking Services

Customers of both Ally Bank and Schwab Bank may now take advantage of additional options that provide even greater value. One of these institutions may be an excellent choice for a new bank account since they offer the most outstanding performance tracking in the industry.

Savings and checking accounts with Charles Schwab do not have any monthly fees. Even though there is a monthly cost for the checking account, this price is eliminated when you create a brokerage account simultaneously. To open a Charles Schwab savings or checking account, you must first open a brokerage account with the firm.

Charles Schwab does not have a minimum balance requirement for its savings and checking accounts. You may earn interest on any amount you put in with no monthly fees.

The interest rates on Ally accounts are competitive. All balances in the Ally savings account are eligible for a 2.20 percent interest rate. On balances exceeding $15,000, the checking account earns a 0.60 percent interest rate. CDs and money market accounts also provide attractive interest rates.

It is unnecessary to deposit any money into an Ally account to begin using it. Any amount will do to start an account with them. Ally accounts don’t charge a monthly fee.

My Preference: Ally Financial Services Wins Over Charles Schwab

Overall, Charles Schwab is a superior choice for novice investors. Charles Schwab provides video education for investors.

We investigated Ally Invest and Charles Schwab’s trading tools, research capabilities, and mobile applications to compare their systems. Charles Schwab provides superior trading resources. Superior market analysis may be found at Charles Schwab, thanks to research. Finally, we discovered Charles Schwab’s mobile trading applications to be the best.

Ally Financial Services vs. Charles Schwab: The Bottom Line

Ally Invest may be a good match for those searching for the most incredible bank account and brokerage combination. In addition to the best checking and savings alternatives, allied Bank also provides a low-cost investing platform that works well for novices.

You may rely on Ally’s investing side to handle your taxable or retirement funds. Stock and ETF transactions are free options, and there’s no basic cost for options. This cost is more than what you’d pay for mutual fund transactions on rivals’ no transaction fee (NTF) lists but lower than what you’d pay for funds that are not on competitors’ NTF lists. A $100 minimum balance is required to open a managed portfolio with no advisory costs.

Algorithmic (also known as robo-) portfolios (also known as ETFs) are the foundation of Ally Invest’s ETF-based managed portfolios. Four portfolio alternatives are available: Core, Income, Tax-Optimized, and Socially Responsible.

Ally Invest’s trading platform isn’t the flashiest or most full-featured. Still, it does the job and makes it simple for novices to manage their finances and assets with a single login.

FAQ

Is Ally Financial Services or Charles Schwab better?

Nevertheless, FX traders and investors in mutual funds are best suited to sticking with Ally rather than Schwab.

Is Ally Financial Services a decent place to invest?

For those who currently have an account with a financial institution or wish to consolidate all of their banking needs, allied is an excellent alternative for their future broker.

Is Ally Financial Services suitable for individual retirement accounts (IRA)?

These two brokerage firms are reasonable and guaranteed to meet most consumers' needs. In particular, for investors in mutual funds and traders of options, Ally Invest is more affordable and provides higher incentives for new accounts. Both have a wide variety of retirement accounts.

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