Does Ally Have a Business Checking Account?

As a business owner, you should always keep your company finances separate from your personal finances. That’s why many people wonder whether Ally offers business checking options.

Unfortunately, Ally does not offer business checking accounts. However, they do offer online savings accounts, money market accounts, interest checking accounts (personal only), high-yield CDs, “raise your rate” CDs, and no-penalty CDs. Ally also has several financing options available, including commercial lines of credit.

While Ally might not offer business checking accounts, they’re known for their high-yield savings accounts. This can make them an attractive option for some customers—but if you need business checking, you’ll need to look for an Ally alternative.

What is Ally?

Ally is an exclusively online bank, founded in 2009. Their headquarters are located in Sandy, Utah. Although they do not have physical locations, their widespread ATM access makes them convenient. Ally also offers online banking and a mobile app, so account holders can conduct most business on the go.

Furthermore, Ally offers 24/7 customer service for any customers using their business financial services. That’s great news for small business owners who work long hours. Even though there are no physical locations, customers can still get the support they need anytime, anywhere.

If you’re looking for a personal checking account, Ally could be a great choice. However, when you need a basic business checking account, don’t be tempted to use a personal Ally bank account for your business. This is prohibited for some business structures—not to mention the source of potential nightmares come tax time.

Does Ally Offer Business Checking Accounts?

Ally does not offer business checking accounts. Instead, they offer:

Personal checking accounts with interest
Online savings accounts (business and personal)
High-yield CDs
Raise-your-rate CDs
No-penalty CDs
Commercial lines of credit
Mortgages
Auto loans
Personal loans
Investment and retirement services

Some of these savings and financing services can be used by business owners. For instance, if you need to finance a company vehicle or purchase a building, Ally’s mortgage and auto loan options may be right for your business.

Ally’s primary appeal is their high-interest savings accounts. Because they have minimal overhead, they’re able to pass savings on to customers in the form of better interest rates and fee-free services. Of course, that can vary by account type, so be sure you understand the pros and cons when signing up for one of their services.

What Perks Does Ally Offer?

Although Ally doesn’t offer business checking, there are plenty of bonuses to signing up for their other accounts, including:

Free incoming wire transfers: Some online banks don’t offer incoming wire transfers at all, while others charge exorbitant rates to send. Ally not only allows them, but there are no fees associated with receiving transfers.
Fee-free personal checking: Ally doesn’t have a minimum balance, nor does it charge monthly or overdraft fees. That’s a far cry from large, traditional banks that can charge $20 or more for monthly fees when you fall below their minimum balance. Plus, you won’t have to worry about racking up more fees if you accidentally overdraw your account.
Widespread ATM access: Ally offers widespread ATM access through Allpoint ATMs. If you have to go outside an Allpoint ATM, Ally will refund up to $10 in fees per month.
Better interest rates: Ally’s interest rates are significantly higher than those at many banks. For checking accounts with less than $15,000, they pay 0.1% in interest. For accounts with over $15,000, they pay 0.25%. Many traditional banks have far lower interest rates. Savings accounts pay 10 times the national average at 1.4%. CD rates are as high as 2.9% for five-year CDs.
Online and mobile banking: Because Ally has no physical locations, you’ll conduct the majority of your transactions online or on their simple, easy-to-use mobile app.
24/7 customer service: Customers can access phone and email support 24 hours a day, seven days a week. Even though you can’t open an Ally business checking account, the great customer service is helpful for business owners working extended hours.
Full-service bank: In addition to checking and savings accounts, Ally can help finance mortgages, vehicles, personal loans, and more.

What Are the Downsides of Banking With Ally?

If you’re a business owner, the biggest drawback to Ally is that you can’t open a business checking account. Here are some factors that could make or break your decision:

No business checking: As you now know, Ally does not offer business checking accounts. However, they do offer other business financial services. You may find that having a business checking account elsewhere and using Ally’s other business services is a fair tradeoff.
No cash deposits: You won’t be able to make cash deposits to your Ally accounts, even with personal accounts. On the other hand, their mobile app makes it easy to deposit checks wherever you are. If you deal with significant amounts of cash, you’ll probably want to look elsewhere.
No physical locations: Because Ally is an online-only bank, there are no physical branches you can visit. Technologically savvy account holders might not mind this issue, but people who prefer communicating and visiting in person will.

Can I Use My Personal Ally Account for My Business?

You wouldn’t be the first person to wonder whether they can use a personal checking account for business purposes.

For certain business types (sole proprietors and independent contractors), you can use a personal checking account for your business finances. However, that’s not recommended. It’s always best to keep your personal and business finances separate. This makes it easier to keep accurate records and will save you time during tax season.

If you own a partnership, LLC, or corporation, having a business account is compulsory. Plus, having a business account is smart for several reasons. It keeps your finances separate, it lends credibility to your venture, and it helps you build business credit for better financing options.

So, yes, sole proprietors, freelancers, and independent contractors can use their personal Ally checking account for their business—but it’s not a smart move.

What Kind of Business Alternatives Are Available?

Because Ally does not offer business checking options, you’ll need to find a suitable substitute. There are dozens of business banking options to choose from at both traditional and online banks. Here are some alternatives for business checking accounts.

Traditional banks

Traditional banks like Citibank, Chase, Wells Fargo, and other major names offer business checking accounts. The biggest issue with traditional banks is that they tend to charge high monthly fees, which may be waivable with a high minimum balance. This can be cost-prohibitive for businesses just starting out or who operate on tight margins.

Furthermore, traditional banks may limit how many fee-free transactions you can conduct. If your company does a high volume of transactions each month, the fees associated with extra transfers can eat into your profits. Always review the fee structure before you sign up for a new account. It’s especially helpful if you have transaction data from prior months. You’ll quickly learn whether a banking service would help or harm your bottom line.

Traditional banks are also good for business owners who prefer in-person banking. Communicating with a business banker or teller sitting across from you is often preferable to waiting on the phone to be helped. However, you should be aware of limitations to physical branches—they may not be geographically feasible to use.

Online banks

Many online banks offer fee-free structures to pass on savings to the customer. Online banks are convenient to use, as long as you’re tech-savvy and don’t need to visit a physical location. They typically offer many of the same services as a traditional bank. However, Ally is a great example of where online banks can fall short.

If you decide on an online bank for your business banking needs, review their pros and cons carefully. Many banks, including Ally, don’t have a mechanism for cash deposits and there may still be limits on the number and types of transactions you can conduct. For instance, some banks do not allow incoming or outgoing wire transfers—or they charge high fees for the privilege.

Online banks can be great for companies who need simple services and low/no-fee structures.

Conclusion

Although Ally business checking is not currently available, you might find attractive savings and financing options through this online bank. If you’re looking for a business checking account, you’ll need to find another banking option. Ally’s high-interest savings accounts may help you and your business earn some extra cash, so keep them in mind when you’re ready to make your extra cash reserves work for you.