Ally Bank is a fresh and new re-branding of GMAC bank. GMAC bank was initially a division of General Motors Acceptance Corporation (GMAC) providing financing opportunities to General Motor customers. Later, GMAC also re-branded itself as Ally Financial. Since then, Ally Bank has had continuous success stories. They offer some of the most competitive banking products focused on high-yield interest products and were also in talks to purchase ING Direct.
Ally is a good option as a custodial savings account. Custodial Savings Accounts help you make an investment for your child’s future. The custodian (legal parent or guardian) controls the account until the minor turns 18. The money in the account belongs to the child and income is reported under the child’s social security number.
Following options are available if you want to choose the Ally Bank Custodial Savings account:
- Online Savings Account
- Money Market Savings Account
- Interest Checking Account
- CD or Certificate of Deposit
Online Savings Account
Ally online savings account is high-yield savings account and doesn’t require any opening deposit, minimum balance or monthly fee. They offer a 0.89% APY which is higher than most other savings accounts. The only other bank with a higher APY of 0.9% is ING Direct. There are no charges for the day-to-day management of the account but the following fees and service charges do apply:
- Each transaction exceeding six per statement cycle
- Overdraft Item paid or returned
- Returned Deposit
- Outgoing wires
- Expedited Deliveries
- Account Research Fee
Money Market Savings Account
The Money Market Account also doesn’t require a minimum balance or monthly fees. The difference between an Online Savings account and Money Market account is the way you can withdraw money. You can have unlimited deposits electronically, by wire and by check. Money Market accounts provide more options on transactions. For example, by debit card, check and bank-to-bank money transfers. Also, keep in mind the APY is usually lower than the online savings account.
Interest Checking Account
The Checking account is direct banking and lets you access your checking account online, by phone, or by ATM. The APY is lower and there is no requirement for a minimum deposit or monthly maintenance fees.
CD or Certificate of Deposit
CDs are another option for Custodial savings. You can choose from 11 months or 2 years fixed CDs. Ally Bank offers three options: High Yield CD, No Penalty CD and Raise your rate CD that has the highest APY.
Opening an Ally savings account is a fairly simple and quick process. You can do it online, by mail or by phone.
Ally Bank ranks quite high amongst the best children’s saving account offerings. With its higher rates than traditional bank, no monthly fees, no minimum deposits and no fee if the balance dips too low, Ally Bank Custodial Savings account is an ideal choice for your child’s future.
