Ally Invest vs E*TRADE brokerage firms comparison: IRA, fees, commissions, stocks/funds offerings, differences, pros and cons. Which broker to choose?

Overview

Ally Financial is known mostly for its bank. But it also has a brokerage unit, aptly named Ally Invest. E*Trade, by comparison, is mostly known for its investing services. But it, too, has a bank. Which one should you choose? Take a look at our research:

Category #1: Pricing

Etrade Review
Rating Ally Invest rating Etrade brokerage firm rating
Stocks, ETFs $0 $0
Options (per contract) $0.50 $0.65
Mutual Funds $9.95 $19.95
Initial Funding Requirement $0 $0
Inactivity Fee $0 $0
IRA Annual Fee $0 $0
IRA Termination Fee $25 $0
Outgoing Wire Fees (Domestic)$30$25
Full Account Transfer Out$50$75
Partial Account Transfer Out$50$25
Open an account Up to $3,000 cash bonus + $0 trades + transfer fee rebate. No commissions on stocks and ETFs.


As you see from the table above, Ally Invest is better priced than E*Trade.


1st Category: Assets That Can Be Traded

E*Trade and Ally Invest have similar product lineups. With a brokerage account at either firm, you’ll be able to trade:

- Stocks
- ETFs
- Closed-end funds
- Mutual funds
- Options
- Fixed income

E*Trade adds futures contracts to the list, while Ally Invest adds forex and precious metals.

Winner: Ally Invest


2nd Category: Margin Borrowing

Forex and futures have their own unique margin rules, which in fact aren’t margin at all when compared to margin for securities.

With a securities account at either Ally Invest or E*Trade, you’ll be able to trade with borrowed funds. This service isn’t free, and it’s not cheap, either, judged by current interest rates.

E*Trade customers pay between 6.95% and 10.45%. Ally Invest charges between 4.75% and 9.25%.

Winner: Ally Invest


3rd Category: Investment Education

Learning materials will be bound on both the E*Trade site and the Ally Invest site. During our probing, we found a Knowledge center on E*Trade’s site; this section hosts many articles on investment topics, including these samples:

- What is diversification and asset allocation?
- Understanding capital gains
- Understanding technical analysis support and resistance

On Ally’s site, we also found many articles on a range of topics. Examples include:

- How to Build an Investment Portfolio That Fits Your Style
- 3 Steps to Supercharging Your Savings
- How to Build a Thriving Business

A lot of materials on Ally Invest’s educational section come from Ally Bank, which means there’s a larger focus on issues outside of investing.

Winner: E*Trade


4th Category: Security Analysis

For the analysis of specific assets, both broker-dealers provide screeners, commentary, recommendations, and other resources. On Ally’s website, we found a stock screener with many search parameters. Results can be sorted by a number of criteria, and there’s a trade link for each entry.

Equity profiles at Ally Invest have ratings from multiple analysts. CFRA is the only available source of reports. Data from past performance, like financial statements and earnings histories, are presented in graphical and numerical formats.

Stock profiles on E*Trade’s website also display financial data in numerical and graphical formats. But E*Trade’s software also provides customization tools, which Ally’s site doesn’t have.

Profiles at E*Trade offer reports in PDF format from more than one analyst. For McDonald’s stock, for example, we found 7 reports. E*Trade also presents blogger sentiment scores and price analysis from Trefis.

E*Trade’s stock screener is easier to use, but results don’t have buy and sell buttons.

Winner: E*Trade


5th Category: Websites

After you locate the asset you want to trade, it’s time to find an order ticket. In the 21st century, this will of course be digital and not paper. Ally Invest’s website has a trade bar that can submit orders for stocks, funds, and options. A browser platform called LIVE delivers full-screen charting and an order form with 5 trade types.


Ally vs Etrade


E*Trade’s site doesn’t have a trade bar. But it does have Power E*Trade, an advanced web-based platform with sophisticated charting and 12 order types. Moreover, the software has Level II data and time & sales information, neither of which appears on Ally Invest’s platform.


Etrade vs Ally Invest


Winner: E*Trade


6th Category: Desktop Software

If you don’t want to trade within a web browser, you could instead download and install a desktop program. Ally Invest customers who place at least 10 trades per month can use Quotestream (review), while E*Trade customers who have at least $1,000 in assets can use E*Trade Pro. The latter software is easier to use and has more features, including live streaming of CNBC and direct-access routing.


Etrade versus Ally Invest


Forex traders at Ally Invest get to choose from among two programs for currency trading. At E*Trade, futures are traded on the Power platform.


Ally Invest or Etrade


Winner: E*Trade


7th Category: Mobile Apps

The Ally Invest app is the same platform that Ally Bank customers use. This means brokerage customers get Zelle transfers and mobile check deposit. E*Trade’s app has mobile check deposit, but not Zelle transfers. But the E*Trade platform offers the ability to submit mutual fund orders; Ally Invest’s platform doesn’t.


Ally Invest vs Etrade


And E*Trade has a second app that is modeled after the Power software. This second app delivers very advanced charting (with lots of technical studies) and order tools. Plus, it also has Level II data, which Ally Invest doesn’t offer.

Another feature we really like on E*Trade’s app is live streaming of Bloomberg Business News. Ally’s app doesn’t offer any video news.


Etrade vs Ally


As with the previous category, Ally’s forex traders use a discrete app. Futures traders at E*Trade use the Power app.

Winner: E*Trade


8th Category: Options

Both firms offer options trading. Although E*Trade’s default per-contract fee is 65¢, active traders pay only 50¢, which is Ally’s rate.

As for tools, we found the lion’s share at E*Trade. The brokerage firm has an options income backtester, a derivative analyzer, an income finder, a strategy optimizer, and a probability calculator. And all that is just the website. Power has integrated spreads, and Pro has very good profit-loss diagrams.

Ally also has profit-loss diagrams, although we prefer E*Trade’s interface. LIVE has a strategy workbench, chains, and a probability calculator. The broker’s mobile app has Greek values and a build-your-own tool.

Winner: Ally Invest


9th Category: Cash Management

Although Ally is largely known for its banking arm, E*Trade also has an FDIC-insured bank. So which one has the better cash management tools?

Ally Invest requires $100,000 in assets to add a debit card or checks to an existing brokerage account (no kidding!). Then, the broker charges a $35 yearly fee for its debit card and $20 for checkwriting privileges.

The best way to circumvent these rather unsavory policies is to open an Ally Bank deposit account and link it to a brokerage account. The company’s money market deposit account offers free checkwriting and ATM fee rebates (up to $10 per month).

E*Trade customers can’t attach banking tools to an existing investment account. But they can link E*Trade Bank accounts to investing accounts. One checking account option provides unlimited ATM fee reimbursements but requires a $5,000 balance to avoid a $15 monthly fee.

Ally Bank’s accounts have no monthly fees, and its savings account pays ten times as much interest as E*Trade’s.

Winner: Ally Bank/Ally Invest


10th Category: Other Services

Fractional-share trading: Neither brokerage firm offers whole-dollar investing.

Dividend reinvestment program: You can sign up for no-cost DRIP service at either broker in this competition.

IRAs: Both companies have them (with various fees). E*Trade has more IRA types.

Automatic mutual fund investing: E*Trade clients can sign up for recurring mutual fund purchases. Ally Invest customers cannot.

IPO availability: E*Trade, but not Ally Invest, provides early access to Initial Public Offerings.

Extended hours: Although both brokerage houses offer pre-market and after-hours trading, E*Trade has longer sessions. Plus, E*Trade customers get to trade a small list of exchange-traded funds around the clock.

Winner: E*Trade


Now, Our Recommendations

Small accounts: Either will do for self-directed accounts. For managed accounts, Ally Invest has a smaller minimum ($100 versus $500).

Retirement savers and long-term investors: Only E*Trade has traditional financial-planning services. Combined with brick-and-mortar offices, we would take it over Ally.

Stock/ETF trading: With free access to both E*Trade Pro and Power E*Trade, it’s an easy choice. But if you plan to use margin, Ally is the better priced broker.

Beginners: We would pick Ally Invest.

Mutual funds: Most mutual funds investors want to own are not NTF funds. Since Ally is two times cheaper for these funds we propose it over E*Trade.


Promotions

Ally Invest: Up to $3,000 cash bonus + $0 trades + transfer fee rebate.

E*Trade: No commissions on stocks and ETFs.



Ally Invest vs E*Trade: Results

This rivalry is pretty close overall. E*Trade is clearly the better firm for stock trading, while Ally is the go-to broker for precious metals and forex. Thanks to a huge difference in pricing for mutual funds and margin borrowing, which could mean savings of thousands of dollars over the years, Ally Invest has an edge in this online broker comparison for price conscious investors.


Open Ally Invest Account


Open Ally Invest Account

Open E*Trade Account


Open Etrade Account




Updated on 9/21/2022.

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