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Investing
September 30, 2015

How Much Does Ally Invest (formerly TradeKing) Cost?

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Ally Invest, formerly TradeKing, is quickly becoming one of the most-liked online investing sites, if for no other reason than its pricing. Ally Invest has some of the lowest fees of any other online trading site, which makes it a great deal for both beginner and experienced traders alike. It also offers a great mobile platform, which makes trading even easier. Ally Invest also offers great incentives for switching to its services, which is a nice bonus. It also offers an automated investment system that will build a portfolio for you based on your risk and when you plan to withdrawal the money.

Here’s a quick look at what each service costs:

  • Ally Self-Directed Trading: $4.95 per trade, no minimum deposit, $9.95 for mutual funds. (Sign up here.)
  • Ally Invest Managed Portfolios (Work-done-for-you automated trading): 0.25% annual fee ($10,000 investment would be $2/month) for Core portfolio, or 0.50% annual fee ($10,000 investment would be $5/month) for Momentum portfolio. (Sign up here.)

And here’s a more in-depth breakdown of Ally Invest’s costs.

Minimal initial deposit: There is no minimum deposit so you can start trading for next to nothing, which is great, since most other trading sites require a minimum deposit. Scottrade requires $500, while bigger sites require up to $2,500 for a minimum deposit.

Stock trading: Ally Invest has the lowest trading price at $4.95 per trade. Most other online trading sites average between $7 and $10 per trade, so Ally Invest is by far the lowest price for trading.

Stock options: For stock options, Ally Invest charges the same $4.95 plus $0.65 per contract. Again, most other sites charge $7 to $10 per trade and upwards of $1.25 per contract, so you are saving a lot with Ally Invest.

Mutual fund trading: For mutual funds, Ally Invest charges $9.95, which is a much better deal than the upwards of $20 that other online trading services charge.

IRA: Ally Invest also doesn’t have any fees for opening or transferring an IRA to your account, so you don’t have to worry about paying for the transfer. Many other online trading sites do charge fees, so this is a nice perk.

Minimum Deposit: The minimum deposit for Core account is $500, while the minimum for a Momentum account is $5,000.

Annual Fees: For Core accounts under $5,000, Ally Invest charges $1/month, and 0.25% for account above $5,000. For Momentum accounts (which must be above $5,000), Ally Invest charges a 0.50% annual fee.

Risk Assist: Risk Assist, which protects Core accounts from sudden declines in the market by moving funds to more stable investments when the market dips, is an extra 0.50% annual fee if you want to add it to your Core account.

Ally Invest is also offering $150 in broker transfer fees to be refunded to you. When you switch brokers, your previous broker can charge you up to $150 to switch, so you will get that money back.

Ally Invest has proven to be a popular online broker with investors and reviewers alike, and the site has received an astounding amount of awards and accolades over the years.

Ally Invest has top-notch customer service, and this hasn’t gone unnoticed. They were rated number one in Customer Service by Smart Money for four years between 2008 and 2012. More recently, StockBrokers.com named Ally Invest the Innovator of the Year in 2013, the number one Trader Community in 2013 and 2014 and number one in Broker Innovation in 2015.

Despite consistently high marks, Ally Invest does have its downsides. Ally Invest lacks commission-free ETFs, so it might not be your best option if you’re making changes to your exchange-traded funds every month. Ally Invest also loses points due to its inactivity fee, which kicks in if you don’t make at least one trade per year or maintain a minimum $2,500 balance. However, you need to meet both conditions to be charged this fee.

As Ally Invest has only been around for a decade, you may be wondering if it’s a safe and secure place to invest your money. While no business can ever be completely safe, Ally Invest is regulated by several financial institutions, giving the site an extra layer of security. Since Ally Invest is a broker for numerous securities, it’s monitored by the Securities and Exchange Commission (SEC), whose purpose is to protect investors from unfair or unlawful trading practices.

Ally Invest’s membership with the Financial Industry Regulatory Agency (FINRA) indicates that this company looks out for its customers. FINRA is an organization that was authorized by Congress to make sure that brokers are fair and honest. As a member, Ally Invest must ensure that its business practices are consistent with FINRA’s rules. Unlike crowdfunded investing services like RealtyShares or PeerStreet, Ally Invest also only invests in traditional investment options, giving it more validity than many new investing services that you see.

In fact, Ally Invest’s ample security features might actually be a cause for annoyance. You’ll need to answer a series of security questions every time you log in, which can be bothersome if you don’t have the information in front of you constantly. While this feature makes the site more secure by taking the extra steps to ensure the identity of its customers, it also makes for a majority of complaints.

One of the best ways to save money for a later date is by investing in an Individual Retirement Account (IRA). Roth IRAs and traditional IRAs are the most popular choices, and the major difference between the two is how taxes are deducted. Ally Invest offers both, and while these two retirement funds are similar, they both have pluses and minuses that you should consider.

Most contributions you make to a Ally Invest Roth IRA aren’t tax-deductible, but any qualified contributions are tax-free. Roth IRAs only allow you to invest money that’s already been taxed, with the major advantage being that you’ll be able to withdraw funds tax-free when you retire.

Ally Invest also has traditional IRAs available for investors, and these have the advantage of being immediately tax-deductible until you retire. However, you’ll have to pay taxes on withdrawals you make once you retire.

When deciding between a Roth IRA and traditional IRA, the biggest choice you need to make is whether you’d prefer to pay taxes on your retirement fund before or after you invest. Open a Roth IRA if you’d prefer to pay taxes now, and open a traditional IRA if you’d prefer to defer taxes until you withdraw funds from the account.

There’s no annual fee for keeping an IRA account with Ally Invest. But if you choose to close your IRA or transfer it to another broker, you’ll be dealing with fees totaling $100, including a $50 transfer fee and a $50 closing fee. Keep this in mind if you choose to open a retirement fund with Ally Invest.

E-Trade was one of the first online brokers and has been around since 1982, making it more than 20 years older than Ally Invest. But E-Trade is still on the cutting edge of technology and features the most comprehensive platform in the industry. E-Trade 360 receives top marks from investors for allowing them to do multiple things simultaneously on a single page. But is it necessarily better than Ally Invest? Both companies offer stock, bond and FOREX trading as well as IRAs and retirement options, but the best way to compare sites is by checking out their features and fees side by side.

Minimum Deposit
Ally Invest: None
E-Trade: $500

Cost per Stock Trade
Ally Invest: $4.95
E-Trade: $9.99

Options Trade Base Fee (and Fee per Contract)
Ally Invest: $4.95 (65 cents per contract)
E-Trade: $9.99 (75 cents per contract)

Minimum to Open Margin Account (and Margin Rates)
Ally Invest: $2,000 (7.75% to 4.00%)
E-Trade: $10,000 (7.94% to 3.89%)

Broker-Assisted Trades
Ally Invest: $20
E-Trade: $25

Mutual Funds Available (and In-Network Commission)
Ally Invest: 11,968 ($9.95)
E-Trade: 7,733 ($19.99)

OptionsHouse and Ally Invest are both known for their impressively low rates for most trades. But there are minor differences to consider when contrasting OptionsHouse and Ally Invest. Both companies offer trades in stocks, options, bonds, mutual funds and futures. However, Ally Invest allows FOREX trading, whereas OptionsHouse does not. On-the-go traders might prefer OptionsHouse as it has its own iPad app, but it also offers less informational tools than E-Trade overall. Read on to see a side by side comparison of rates and fees.

Minimum Deposit
Ally Invest: None
OptionsHouse: None

Cost per Stock Trade
Ally Invest: $4.95
OptionsHouse: $4.95

Options Trade Base Fee (and Fee per Contract)
Ally Invest: $4.95 (65 cents per contract)
OptionsHouse: $4.95 (50 cents per contract)

Minimum to Open Margin Account (and Margin Rates)
Ally Invest: $2,000 (7.75% to 4.00%)
OptionsHouse: $2,000 (6.25% to 2.00%)

Broker-Assisted Trades
Ally Invest: $20
OptionsHouse: $0

Mutual Funds Available (and In-Network Commission)
Ally Invest: 11,968 ($9.95)
OptionsHouse: 11,905 ($20)

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