Ally Invest vs. Wealthfront and Schwab: Key Points
• Investment-advisory service is available at Wealthfront, Ally Invest, and Schwab.
• Schwab and Ally Invest, but not Wealthfront, have brokerage accounts as well.
• No-fee IRAs will be found only at Schwab and Wealthfront.
Schwab vs. Ally Invest and Wealthfront Introduction
Before opening your next investing account, have a look at Wealthfront, Ally Invest, and Charles Schwab. These three financial firms do differ from each other in important areas, so be sure to examine our comparison carefully.
Broker Commissions and Fees
| Broker Fees |
Stock/ETF
Commission |
Mutual Fund
Commission |
Options
Commission |
Maintenance
Fee |
Annual IRA
Fee |
|
Charles Schwab
|
$0
|
$49.95 ($0 to sell)
|
$0.65 per contract
|
$0
|
$0
|
|
Ally Invest
|
$0
|
$0
|
$0.50 per contract
|
$0
|
$0
|
|
Wealthfront
|
$0
|
na
|
na
|
0.25%
|
0.25%
|
Services
Investment Products
Managed accounts, which are investment accounts managed by the firm itself rather than by the customer,
are available at all three companies in this survey. All three of them have robo accounts, while Schwab
and Ally Invest, but not Wealthfront, also have human financial planners for extra help. Automated accounts at all three firms only invest in exchange-traded funds (ETFs).
For the self-directed investors out there, Ally Invest and Schwab also offer brokerage accounts. These accounts provide access to a larger list of tradable products, including stocks, options, bonds, closed-end funds, and mutual funds (in addition to a much larger selection of ETFs). Schwab, but not Ally Invest, offers trading in futures contracts and foreign stocks. Both Schwab and Ally Invest provide trading in forex.
Although Wealthfront doesn’t offer traditional brokerage accounts, it does offer something called the Stock Investing Account. Technically, this is a limited discretion advisory account where the customer chooses what to buy or sell, and Wealthfront chooses the time, method, price, and number of shares.
Winner: Schwab
Promotions
Charles Schwab: Satisfaction guarantee and $0-fee trades at Charles Schwab.
Ally Invest:
Open an Ally Invest account and get $0 stock trades.
Wealthfront:
Get $0 stock trades at Wealthfront.
Cash Products
Not one firm in this three-way comparison has forgotten about the need for cash management. At Ally Invest,
a deposit account with Ally Bank can easily be connected to a securities account, and it’s really easy to
transfer cash among all of a login’s linked accounts. A savings account with Ally Bank yields
3.6% right now with zero account fees.
Wealthfront has no account fees, either, and it delivers a 4% APY. Wealthfront has partnered with roughly 19,000 cash machines for fee-free withdrawals using a Wealthfront debit card. And unlike the other two firms here, Wealthfront customers get $8 million in FDIC insurance through a sweep program.
Schwab operates Schwab Bank, which has a checking account with unlimited ATM fee refunds around the world. The downside is the consistently low interest rate on the account, although like Wealthfront and Ally, we do really like the real-time money transfers between deposit and investing accounts.
Winner: Pretty close overall
PC Trading
All three investment firms of course have websites, although trading tools vary substantially. Because Wealthfront is mostly a hands-off firm, there aren’t many investment tools on its site. Ally Invest, by comparison, has a web-browser platform with five order types and two duration choices. A desktop platform called Quotestream is available for active traders.
Schwab has a desktop platform called thinkorswim. There are no trading requirements or account minimums for this one. And thinkorswim has a less complicated web-browser cousin with simpler trading tools. Schwab’s website proper has a great deal of trading tools on its own. These resources include advanced order types, multiple option tools, and full-screen charts.
Winner: Schwab
Mobile Trading
Much the same situation will be found on the three firms’ mobile apps. Wealthfront once again focuses on simplicity, so there’s not much to comment on. Actual trading tools will be found on the Ally Invest app, and in fact, there are two of them: one for securities and another for forex. The securities app has vertical charting with zero tools and an order ticket with four legs for custom option plays.
Schwab also has two apps. One is a basic app, while the other is a thinkorswim app for very advanced trading. The latter platform can trade futures and forex in addition to options. The regular app has mobile check deposit, tons of market news, an Artificial Intelligence, and an order ticket with lots of integrated option spreads.
What we really like about both Schwab apps is the inclusion of streaming video news, which we didn’t find on Wealthfront’s app or Ally’s.
Winner: Schwab
Margin Services
Wealthfront clients can borrow money through the company’s Portfolio Line of Credit. The interest rate is
very good (just 4.16% to 5.41%),
although $25,000 in equity is required to actually borrow, and the stock account isn’t eligible for the
service.
Schwab and Ally Invest only require the standard $2,000 in equity to start using margin, although rates do
go up. Right now, Ally Invest customers pay margin interest on a sliding scale that starts at 12% and
ends at 7.5%. Schwab’s tiered system begins at 12.575% and stops at 10.875%.
Winner: Ally Invest
Additional Services
Fully-paid Securities Lending: Available at Schwab and Ally Invest.
IRA Lineups: All three investment firms in this contest have Individual Retirement Accounts. Ally Invest does charge $25 to close an IRA. The other two firms don’t. Schwab has more IRA types than Wealthfront.
Extended Hours: Ally Invest and Schwab have extended-hours trading for securities. Futures trade 24/6, and forex is available 24/5. Schwab has overnight trading in some ETFs.
Automatic Mutual Fund Purchases: Only at Schwab.
DRIP: Self-directed accounts at Schwab and Ally Invest can turn on autopilot dividend reinvesting.
Fractional-share Trading: Schwab customers can invest in the S&P 500 stocks using whole dollars. Stock-investing accounts at Wealthfront can make whole-dollar trades. Ally Invest does not offer any such service for brokerage customers.
IPO Access: Only at Schwab.
Winner: Schwab
Promotions
Charles Schwab: Satisfaction guarantee and $0-fee trades at Charles Schwab.
Ally Invest:
Open an Ally Invest account and get $0 stock trades.
Wealthfront:
Get $0 stock trades at Wealthfront.
Our Recommendations
Long-Term Investors & Retirement Savers: Schwab.
Beginning Investors: A managed account with any one of the three.
Small Accounts: For self-directed taxable accounts, Ally Invest or Schwab will work. For self-directed tax-deferred accounts, Schwab. For taxable robo accounts, Ally Invest. For tax-deferred robo accounts, Wealthfront.
Frequent Stock Trading: Definitely Schwab.
Mutual Funds: Schwab.
Final Judgement
Although Wealthfront and Ally Invest do have some decent financial services, they seem to underwhelm compared to Charles Schwab.
Updated on 1/1/2025.
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