Ally Bank does offer checking accounts, but only online

Ally Bank offers a checking account called the Ally Bank Checking Account, available only through their website and mobile app—there are no physical branches. The account comes with a debit card, online bill pay, and access to a network of ATMs. There is no monthly fee, and no minimum balance requirement.

Because Ally operates as an online-only bank, you cannot walk into a location to deposit cash or speak to a teller in person. All deposits happen through mobile check deposit (photograph the check with your phone), ACH transfers from another bank, or direct deposit from your employer. If you need to deposit cash regularly, this account may not work for you.

The checking account earns interest on your balance—the rate varies and changes over time, so check Ally's website for the current rate. This is unusual for checking accounts; most banks pay nothing on checking balances.

Key Takeaways

  • Ally's checking account has no monthly fee, no minimum balance, and earns interest on your money.
  • You can only open and manage the account online or through the mobile app; there are no branch locations.
  • Deposits happen through mobile check deposit, ACH transfers, or direct deposit—cash deposits are not an option.
  • The debit card works at ATMs nationwide and at merchants, but ATM fees outside Ally's network may apply depending on your location.

How deposits work with an online-only checking account

Mobile check deposit is the main way to deposit paper checks. You photograph the front and back of the check using the Ally mobile app, and the bank processes it. Most checks clear within one to two business days. You do not mail the check or visit a location.

Direct deposit from your employer is the fastest way to get money in. Your paycheck lands in your account on payday with no delay. You provide your employer with Ally's routing number and your account number, both visible in the app.

ACH transfers from another bank account you own take one to three business days. You initiate the transfer from your other bank's website or app, or you can set up a transfer from Ally's side by linking the other account. Ally will verify the account with two small deposits, which takes a few days.

Cash deposits are not possible. If you receive cash regularly and need to deposit it, you would have to convert it to a check or transfer it through another bank account first.

ATM access and debit card use

Ally's debit card works at any merchant that takes Visa. You can also use it to withdraw cash at ATMs. Ally does not charge you a fee for ATM withdrawals at its partner network, which includes Allpoint and MoneyPass ATMs. You can find these ATMs through the Ally app.

If you use an ATM outside Ally's partner network, the ATM operator may charge you a fee—typically $2 to $3. Ally will not refund this fee. Some banks refund out-of-network ATM fees; Ally does not.

If you live in an area with few partner ATMs nearby, you may end up paying fees regularly. Check the Ally app to see which ATMs are available in your area before you open the account.

Interest rates and how money grows in the account

Unlike most checking accounts, Ally's checking account pays interest on your balance. The rate is set by Ally and changes based on market conditions and the Federal Reserve's actions. Interest is calculated daily and deposited monthly.

The rate is typically lower than Ally's savings account rate, but it is still higher than the zero percent you would earn at most traditional banks. Because rates change, you should check Ally's website to see the current rate before you decide to open the account.

Interest is taxable income. Ally will send you a 1099-INT form at the end of the year if you earned $10 or more in interest, which you report on your tax return.

Transfers and bill pay

You can transfer money between your Ally checking account and other Ally accounts you own (savings, money market) instantly through the app. Transfers to other banks take one to three business days via ACH.

Bill pay is built into the Ally app. You enter the biller's information, set the payment amount and date, and Ally sends the payment. Most bills arrive within three business days. You can schedule payments in advance or pay immediately.

Some billers—utilities, credit card companies, insurance—accept electronic payments directly. Others require Ally to mail a check on your behalf, which takes longer. The app tells you which method Ally will use for each biller.

Overdraft protection and what happens if you overspend

Ally's checking account does not offer overdraft protection. If you spend more than your balance, the transaction will be declined at the point of sale. You will not be charged an overdraft fee because the transaction simply does not go through.

This is different from banks that allow overdrafts and charge $30 to $35 per overdraft. With Ally, you cannot accidentally overdraw your account. The downside is that your debit card may be declined if you miscalculate your balance.

To avoid this, check your balance in the app before making large purchases, or set up a low-balance alert so you know when you are running short.

Security and fraud protection

Ally's checking account is covered by FDIC insurance up to $250,000. This means if Ally fails as a bank, your money is protected by the federal government up to that limit. Most people's checking balances are well below this threshold.

Debit card fraud is covered under Visa's zero-liability policy. If someone uses your card without permission, you report it to Ally and Visa will refund the fraudulent charges. You must report unauthorized transactions within 60 days of the statement date to receive full protection.

Your account is protected by a password and optional two-factor authentication through the app. Enable two-factor authentication to add an extra layer of security.

Frequently Asked Questions

Can I deposit cash into an Ally checking account?

No. Ally has no physical branches, so you cannot deposit cash directly. You can deposit checks through the mobile app, or transfer money from another bank account. If you receive cash, you would need to deposit it into another bank first, then transfer it to Ally.

What happens if I need to deposit a check but don't have the Ally app?

You can access mobile check deposit through the Ally website on a computer or phone browser if you do not want to use the app. You will still need a camera or phone to photograph the check. If you cannot use mobile deposit, you can transfer money from another bank account instead.

Does Ally charge fees for using out-of-network ATMs?

Ally does not charge you a fee, but the ATM operator may charge $2 to $3. Ally will not refund these fees. Use Ally's partner ATM network (Allpoint and MoneyPass) to avoid charges, or withdraw cash when you make a purchase at a store.

Can I overdraft my Ally checking account?

No. Transactions will be declined if you do not have enough balance. You will not be charged an overdraft fee, but your card may be rejected at checkout. Check your balance before large purchases or set up a low-balance alert in the app.

Is my money safe if Ally Bank fails?

Yes. Your checking account balance is insured by the FDIC up to $250,000. If Ally fails, the federal government will return your money. Debit card fraud is also covered under Visa's zero-liability policy if you report it within 60 days.