Ally Invest is a low-cost stock broker that’s challenging its competitors in attracting new investors. In fact, its signups are growing at a pace unlike ever before.

Ally’s first quarter results for 2020 are proof that it’s ready to take on Fidelity and others in the industry. Yet, many people are unfamiliar with the platform. Learn more about this thriving online broker below.

What is Ally Invest?

Ally Invest is a branch of Ally Financial (NYSE: ALLY) that provides automated investing with commission-free trading. Its appeal is that it suits both ends of the investing spectrum. Whether you are new to the stock market or a seasoned investor, Ally provides the resources you need.

In 2016, Ally bought TradeKing and rebranded. After four years, the online investing service is beginning to make its mark. However, what are its main benefits?

First and foremost, its account minimum is $0. It also takes in $0 in trading commissions on stocks, options and ETF trades. While options are commission-free, there is a $0.50 fee per contract.

Furthermore, you have the option to select robo-advising that will monitor, manage and rebalance your portfolio for you. For more hands-on investors, you can use Ally’s self-directed trading that includes in-depth research and market analysis tools.

What are Ally’s Strengths and Weaknesses?

Ally Invest shines in many areas. However, it’s falling behind in another. For starters, the benefits have become very clear to investors.

Free trading and no account minimums is just the start. The trading platform itself is a thing of beauty. The dashboard is customizable and it offers real-time data and tools.

There are no downloads required, so you can easily access your account from your computer or mobile device. Ally also has a mobile application that is dedicated to Forex trading, which Fidelity does not provide.

The brokerage’s research capabilities and tools exceed expectations as well. For example, there’s an options pricing calculator that forecasts pricing based on current bids and asking prices.

It’s clear that Ally Invest has a less restrictive platform than competitors such as Fidelity, Betterment or E-Trade. Yet, where does it fall behind? The answer is simple: mutual funds and penny stocks.

While you have access to over 8,000 mutual funds on Ally’s platform, they all incur a transaction fee of $9.95. Many of its competitors, such as Merrill Edge or E-Trade, offer the same mutual funds with no transaction fees.

Penny stock trading is another area where Ally struggles to compete. For any stock that trades under $2.00, there is a charge of $4.95. In addition, it charges $0.01 per share that you purchase of that specific penny stock. The max commission is 5% of the trade value.

Will Ally Invest Continue to Grow?

Ally’s platform has many benefits that are obviously sitting well with investors. In the Q1 press release, CEO J.B. Brown noted that Invest accounts “grew at the highest and fastest pace in over four years under the Ally brand.”

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Fidelity and E-Trade provide a more comprehensive online brokerage platform. However, Ally is growing in popularity. You may want to consider this dynamic, commission-free trading service going forward. Overall, Ally Invest is here to stay.

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