Axos Bank vs. Ally - SmartAsset

These days, more and more people are managing their entire financial lives online. As a result, online banks are competing to offer the best products. Two that stand out today are Axos Bank and Ally Bank. Both are known for their low or non-existent fees as well as rates that stack up well against the competition. But which one is right for you? Below, find out how they compare in terms of their bank account offerings, fees, rates and more. You may also want to consider working with a financial advisor who can help you will all of your financial decisions.

What to Know About Axos Bank

Axos Bank was born on the internet. In fact, it is the oldest online bank in the U.S. Axos emerged at the dawn of the new millennium back in 1999 when online banking was a whole new concept and people were just beginning to comprehend managing their finances on the web.

Back then, it was known as the Bank of Internet USA. Now called Axos Bank, this financial institution is still staying on top of the digital banking wave by offering its customers the latest in mobile banking technology. It also stands out for its low fees, generous rates and inexpensive yet reliable products.

What to Know About Ally Bank

Ally Bank is one of the leaders in online-only banking. It’s actually been around since the 1920s. Back then, it was an auto financer known as GMAC. But as the digital revolution began to reshape the banking industry, Ally decided to jump right in and reinvent itself. Today, it offers everything from checking accounts to individual retirement accounts (IRA) and mutual funds.

You can manage these from the palm of your hand via a mobile device. Ally is also known for offering some of the best savings accounts. It also stands out for its inexpensive or absent fees and rates that stand head and shoulders above those of its brick-and-mortar competitors.

Bank Accounts Comparison

In terms of product versatility, Axos Bank comes out winning. It offers six types of checking accounts, including one designed for teenagers and another made for senior citizens. Anyone can open a Rewards Checking account that can generate an APY of 3.30%. That rate is robust compared to the national average for savings accounts. But remember, this is a checking account.

So you won’t have to face any federal regulations that limit you to six withdrawals and transactions per month. In addition, you won’t face any monthly service fees or minimum balance requirements. And of course, you’d also have access to certificates of deposit (CDs) and IRAs.

But that’s not to say Ally Bank lacks standout products. You can open its popular Online Savings Account, which currently generates an APY of 4.20% on all balances. The interest rate alone puts it among the best savings accounts on the market today. Furthermore, Ally doesn’t charge monthly maintenance fees. But Ally really stands out for its longer-term investments.

It currently offers a wide range of CD options. Its popular 12-month CD generates an APY of 4.50%. That’s one the best CD rates we’ve examined. Or you can take your chances and open a Raise Your Rate CD. With this option, Ally Bank can raise your interest rate twice during your term if the interest rate environment reflects this.

Axos Bank vs. Ally Bank: Fees

Ally Bank keeps no secrets when it comes to fees. And that’s not surprising. The online banking giant has done away with “hidden fees,” like ones for ACH transfers and incoming wires. The bank also waives its monthly service fees for many of its popular accounts, including the Online Savings Account and the Ally Money Market account.

However, Axos is also light on fees. The bank doesn’t charge monthly service fees for its Essential Checking account. Plus, Axos reimburses you for domestic ATM fees. At other banks, that’s a perk usually reserved for premium checking accounts that require large minimum balances and even larger minimum opening deposits. But you don’t even need to maintain a minimum balance on this account to keep it open.

Axos Bank vs. Ally Bank: Rates

Ally Bank prides itself on its rates. And it’s a reputation the bank has earned. In fact, its online savings account generates an APY of 4.20%. That rate climbs to more than 10 times the national average for savings accounts. A similar option at Axos Bank generates an APY of 0.15%.

Moreover, Ally also offers great CD options. Its 12-month CD currently pays an APY of 4.50%. A similar option at Axos generates an APY of 0.20%. Overall, Ally wins the rates comparison. That said, Axos bank offers generous rates as well along with low fees or none at all.

The Bottom Line

Both Axos and Ally offer a full suite of reliable, inexpensive and effective products. Ally offers better rates overall. However, Axos offers extra perks like ATM fee reimbursements. Overall, both banks are solid choices. If you’re looking to make a significant return on large investments, you may want to go with Ally. But if you’re looking for simple solutions that will keep more of your own money in your pocket, you probably want to choose Axos.

Tips on Financial Wellness

Anytime you’re making important financial moves, it can be beneficial to seek the help of a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
You don’t have to manage all your finances with one bank. You can open a checking account that suits you at Axos and a high-yield savings account with Ally. And you can also explore products at the best banks in the country.