Ally vs Betterment – The Pros and Cons

Ally vs Betterment – Ally Invest and Betterment are two popular investment platforms that cater to different types of investors. Ally Invest is a brokerage platform that provides a wide range of investment products, while Betterment is a robo-advisor platform that uses algorithms to manage your investments. In this comparison, we will take a closer look at the features and benefits of each platform to help you decide which one is best for your investment needs.

Investment Products

Ally Invest offers a wide range of investment products, including stocks, options, ETFs, mutual funds, bonds, forex, and futures. This makes it a good choice for self-directed investors who want to diversify their portfolios and have access to a wide range of investment opportunities.

Betterment, on the other hand, offers a more limited selection of investment products. It primarily offers a range of low-cost ETFs, including stock ETFs, bond ETFs, and socially responsible ETFs. However, the platform does not offer individual stocks, options, or other investment products. This makes Betterment a better choice for investors who want a hands-off approach and do not want to manage their investments themselves.

Trading Fees and Commissions

Ally Invest and Betterment have different fee structures, depending on the type of investment products you choose.

Ally Invest charges $0 for online equity trades, and options trades are $0.50 per contract. Mutual fund trades are also free of charge, but there is a $9.95 transaction fee for buying/selling no-load mutual funds. There are also no account fees or inactivity fees. However, Ally Invest charges a $50 annual IRA fee.

Betterment charges an annual fee of 0.25% of assets under management for its robo-advisory services, which include portfolio management, rebalancing, and tax-loss harvesting. There are no transaction fees, account fees, or inactivity fees. However, investors will also need to pay the expense ratio of the ETFs in their portfolio, which typically ranges from 0.07% to 0.15% per year.

In terms of trading fees, Ally Invest has a more affordable structure for self-directed investors who trade frequently, especially options traders. On the other hand, Betterment’s flat annual fee is a more affordable choice for investors who prefer a hands-off approach and do not want to worry about transaction fees.

Account Minimums

Ally Invest and Betterment have different account minimums depending on the type of account and investment products you choose.

Ally Invest has no minimum account balance requirement for most types of accounts, including individual brokerage accounts, IRAs, and custodial accounts. However, some types of investment products may have their own minimum investment requirements. For example, mutual funds may have a minimum investment requirement of $100 to $3,000 per fund.

Betterment has no minimum account balance requirement for its robo-advisory services. However, there is a minimum initial investment requirement of $10 for Betterment Digital, which is its basic offering. Betterment Premium, which offers additional features such as personalized advice from a certified financial planner, requires a minimum account balance of $100,000.

Investment Research and Education

Ally Invest offers a range of research and educational resources to help self-directed investors make informed investment decisions. This includes access to market news and analysis, research reports, educational articles, and a variety of trading tools such as charting tools, screeners, and calculators. Ally Invest also has an active online community where users can exchange trading ideas and insights.

Betterment, on the other hand, does not offer extensive research and educational resources for investors. However, the platform does provide educational articles and resources on investing basics, tax-loss harvesting, and other investment-related topics. Additionally, Betterment’s robo-advisor platform automatically rebalances your portfolio to ensure that your investment strategy stays on track with your investment goals.

Customer Service and Support

Both Ally Invest and Betterment offer customer service and support, but they differ in terms of the level of support and the channels available to customers.

Ally Invest provides customer support through phone, email, and live chat. They also offer a comprehensive online help center that includes a range of articles, videos, and frequently asked questions (FAQs) to help customers find answers to their questions.

Betterment offers customer support through email and phone, and they also have a live chat feature available during business hours. They also have an extensive online help center that includes articles, tutorials, and FAQs to help customers find answers to their questions. Additionally, Betterment offers premium customer support through its Betterment Premium service, which provides access to a certified financial planner.

Both Ally Invest and Betterment offer good customer support, but Ally Invest offers more channels for support and is available 24/7. Betterment offers a premium customer support service that provides access to a certified financial planner, which may be valuable for investors who need more personalized advice.

Robo-Advisor Features

Betterment is a robo-advisor platform that is designed to offer automated investing services. Here are some of the features that Betterment offers:

  1. Goal-based investing: Betterment uses a goal-based investing approach, which means that investors set specific investment goals and then the platform creates a customized investment portfolio to help them achieve those goals.
  2. Automated portfolio management: Once an investor’s goals are established, Betterment’s algorithm creates a diversified investment portfolio based on the investor’s risk tolerance, time horizon, and investment goals. The platform also automatically rebalances the portfolio to maintain the desired asset allocation.
  3. Tax-efficient investing: Betterment uses tax-loss harvesting to help investors minimize their tax liabilities. This involves selling losing investments to offset gains and reduce taxable income.
  4. Socially responsible investing: Betterment offers socially responsible investing portfolios that align with investors’ values by investing in companies that prioritize environmental, social, and governance (ESG) factors.

Ally Invest does not offer a robo-advisor service, but they do offer a self-directed brokerage account that allows investors to trade stocks, ETFs, options, and mutual funds. Investors who use Ally Invest can use their own research and analysis to select their own investments, or they can use third-party research tools to help them make investment decisions.

Investment Portfolios

Ally Invest and Betterment offer different types of investment portfolios to their customers.

Ally Invest provides a self-directed brokerage account that allows investors to select their own investments from a wide range of stocks, ETFs, options, and mutual funds. They also offer professionally managed portfolios through the Ally Invest Managed Portfolios program. These portfolios are managed by a team of investment professionals and offer different investment strategies, including income, growth, and tax-optimized portfolios.

Betterment, on the other hand, offers a robo-advisor service that creates a customized investment portfolio based on an investor’s risk tolerance, time horizon, and investment goals. The platform uses a goal-based investing approach to help investors achieve their financial goals, and it automatically rebalances the portfolio to maintain the desired asset allocation. Betterment also offers socially responsible investing portfolios that align with investors’ values by investing in companies that prioritize environmental, social, and governance (ESG) factors.

Fees and Pricing

Ally Invest and Betterment have different fee structures and pricing models.

Ally Invest charges a flat fee of $4.95 per trade for stocks, ETFs, and options. The platform does not charge any annual account fees or inactivity fees. The Ally Invest Managed Portfolios program charges an annual advisory fee of 0.30% to 0.70%, depending on the portfolio strategy chosen.

Betterment charges an annual advisory fee based on the investor’s account balance. The fee ranges from 0.25% to 0.40% of the account balance, depending on the account balance and the type of account. Betterment also charges fees for its premium services, including access to a certified financial planner and the ability to make trades without a transaction fee.

Tax-Loss Harvesting

Betterment offers tax-loss harvesting as a feature for its customers. Tax-loss harvesting is a strategy that helps investors reduce their tax liability by selling lost investments to offset gains and reduce taxable income.

Here’s how it works with Betterment:

  1. Betterment’s algorithm monitors the investor’s portfolio for potential losses.
  2. If the algorithm identifies an investment that has declined in value, it sells the investment and uses the proceeds to purchase a similar investment that maintains the same asset allocation.
  3. The investor can use the loss to offset gains in other investments, which reduces their tax liability.

Betterment’s tax-loss harvesting feature is available to all customers who have a taxable account with a balance of $50,000 or more. The feature is included in Betterment’s annual advisory fee, and there are no additional fees for using the service.

Ally Invest does not offer tax-loss harvesting as a feature for its customers. However, Ally Invest does offer a range of tax-advantaged investment accounts, including traditional and Roth IRAs, that can help investors reduce their tax liability over the long term.

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Ally vs Betterment

Ally vs Betterment IRA

When it comes to IRA accounts, both Ally Invest and Betterment offer options for traditional and Roth IRAs, as well as SEP and SIMPLE IRAs for self-employed individuals.

Ally Invest offers a range of low-cost investment options, including stocks, ETFs, and mutual funds, with no minimum investment requirements for IRA accounts. The platform also offers a range of educational resources, as well as retirement planning tools and calculators to help investors plan for their future.

Betterment’s IRA accounts are fully automated, with investment portfolios tailored to the investor’s risk tolerance and retirement goals. The platform also offers advanced tax optimization strategies, including tax-loss harvesting and asset location, to help maximize after-tax returns. Betterment’s annual advisory fees for IRA accounts are 0.25% for its digital platform and 0.40% for its premium plan, which provides access to financial advisors.

betterment vs ally high yield savings

When it comes to high-yield savings accounts, both Betterment and Ally offer competitive interest rates and no monthly maintenance fees.

Betterment’s Cash Reserve account offers a high-yield savings account with a current APY of 0.40%, with no minimum balance requirements or fees. The account is FDIC-insured up to $1 million, and funds are swept to partner banks to provide additional insurance coverage. Additionally, Betterment offers a checking account that can be linked to the Cash Reserve account for easy transfers and bill payments.

Ally Bank also offers a high-yield savings account with a current APY of 0.50%, with no minimum balance requirements or fees. The account is FDIC-insured up to $250,000 per depositor, per account ownership category. Ally Bank also offers a range of other banking products, including checking accounts, CDs, and money market accounts.

Ally vs Wealthfront

Ally Invest and Wealthfront are both popular investment platforms, but they have different strengths and features that may appeal to different investors.

Investment Options: Ally Invest offers a range of investment options, including stocks, bonds, ETFs, mutual funds, options, and futures. The platform also offers a robo-advisor service for investors who prefer a more automated approach. Wealthfront, on the other hand, is primarily a robo-advisor platform, offering a range of investment portfolios tailored to the investor’s risk tolerance and financial goals.

Fees: Ally Invest has a low pricing structure, with stock and ETF trades costing $0, and options trade costing $0.50 per contract. The robo-advisor service has an annual advisory fee of 0.30%, with a $100 minimum investment requirement. Wealthfront also charges a 0.25% annual advisory fee, with a $500 minimum investment requirement.

Investment Research and Education: Ally Invest offers a range of educational resources and research tools, including a customizable dashboard, advanced charting tools, and technical analysis. Wealthfront offers educational resources and tools as well, but its focus is on providing a more automated investment experience.

Customer Support: Ally Invest offers 24/7 customer support via phone, email, and online chat, as well as an extensive knowledge base and community forum. Wealthfront also offers phone and email support, but its customer support hours are more limited.

Betterment two-way sweep

Betterment’s Two-Way Sweep is a feature that automatically moves cash between a user’s Betterment Cash Reserve account and their linked checking account. This helps to optimize the user’s cash flow and earn the best possible interest rate on their savings.

The Two-Way Sweep feature works by monitoring the user’s checking account balance and automatically transferring excess funds to their Cash Reserve account. This helps the user earn a higher interest rate on their savings while still maintaining access to their cash for spending needs.

When the user needs to spend money, the Two-Way Sweep feature automatically transfers funds from their Cash Reserve account back to their checking account to cover the transaction. This helps to ensure that the user always has enough cash on hand while still maximizing their savings.

Betterment savings account

Betterment offers a savings account called Betterment Cash Reserve, which is designed to help users earn a higher interest rate on their cash savings. The account is FDIC-insured up to $1 million and has no account minimums or fees.

Betterment Cash Reserve offers a competitive APY (annual percentage yield) compared to traditional savings accounts offered by banks, with rates that can vary based on market conditions. Users can access their cash at any time with no penalties or restrictions, making it a convenient option for emergency funds or short-term savings goals.

One unique feature of Betterment Cash Reserve is the Two-Way Sweep feature, which automatically moves cash between the user’s checking account and Cash Reserve account to optimize their cash flow and earn the best possible interest rate on their savings.

Betterment Cash Reserve is seamlessly integrated with other Betterment services, such as the robo-advisor platform, which can help users automate their investing and savings strategies.

Marcus vs ally hysa

Marcus and Ally are both online banks that offer high-yield savings accounts (HYSA) that can provide a better interest rate than traditional banks. Here’s a comparison of their HYSA offerings:

Marcus High Yield Online Savings:

  • APY: 0.50%
  • No account minimums or fees
  • FDIC-insured up to $250,000

Ally Online Savings Account:

  • APY: 0.50%
  • No account minimums or fees
  • FDIC-insured up to $250,000

In terms of APY and FDIC insurance coverage, Marcus and Ally offer very similar HYSA options. The deciding factor for users may come down to other features or services offered by each bank, as well as personal preferences for customer service and user experience.

For example, Marcus is a division of Goldman Sachs Bank USA and may offer additional financial products or services that are attractive to users. On the other hand, Ally has a reputation for excellent customer service and a user-friendly online interface, which may be important factors for some users.

Betterment cash reserve vs Ally

Betterment Cash Reserve and Ally High Yield Savings Account (HYSA) are both online savings accounts that offer competitive interest rates and FDIC insurance protection. Here’s a comparison of the two options:

Betterment Cash Reserve:

  • APY: Varies based on market conditions, currently up to 0.30%
  • No account minimums or fees
  • FDIC-insured up to $1 million
  • Two-Way Sweep feature for automatic cash transfers between accounts

Ally High Yield Savings Account:

  • APY: 0.50%
  • No account minimums or fees
  • FDIC-insured up to $250,000
  • User-friendly online interface and mobile app
  • ATM fee reimbursements

In terms of interest rates, Ally currently offers a higher APY than Betterment Cash Reserve. However, Betterment Cash Reserve offers a higher FDIC insurance limit and the Two-Way Sweep feature, which can help users optimize their cash flow and savings strategies.

Ally is known for its user-friendly online interface and mobile app, as well as ATM fee reimbursements, which may be important factors for some users. Betterment, on the other hand, offers other financial products and services, such as a robo-advisor platform, that can help users with investing and savings goals.

Frequently Asked Questions (F&Qs)

Ally vs Betterment

Which Has the Best Investment Options?

Ally Invest has a wider range of investment options than Betterment, and it may be a better fit for investors who want to actively manage their portfolios and have more control over their investment decisions. However, Betterment’s focus on ETFs and algorithmic investment management may be a good fit for investors who prefer a more passive investment approach.

Which Offers the Best Customer Service?

if you are looking for personalized customer support and access to financial advisors, Betterment may be the better option. However, if you prefer to manage your investments independently and rely on online resources for support, Ally Invest may be a good fit.

Which is the Most Affordable?
For active trader who prefers to manage their own investments, Ally Invest may be the more affordable option. However, if you are looking for a more automated investment approach and value tax optimization, Betterment’s fees may be worth it.
Which is Best for Beginners?
For beginner investors looking for a platform with a user-friendly interface and a range of educational resources, Ally Invest may be the better option. However, if you prefer a hands-off investment approach and value automated investing and financial planning guidance, Betterment may be a good fit.
Which Offers the Best Tools for Advanced Investors?
For an advanced investor who prefers a hands-on approach to trading and values advanced charting tools and technical analysis, Ally Invest may be the better option. However, if you are interested in advanced tax optimization strategies and prefer a more automated investment approach, Betterment may be a good fit.

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