Ally vs. Synchrony: How Do These Online Banks Compare?

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Updated on Tuesday, April 30, 2019

Both Ally Bank and Synchrony are leaders in the online banking space. They offer some of the highest rates around, and charge very low or no fees for their high-yield products. Plus, their outstanding online and mobile features and usability make accounts easily accessible from anywhere.

Ally Bank can trace its roots back to 1919, when it was founded as GMAC, the financing division of GM. In 2009, it evolved into Ally Bank, committed to offering competitive rates online and 24/7 customer service. With Ally Bank, customers have access to over 43,000 ATMs in the Allpoint network.

Synchrony has a more recent history. It was founded in 1988 as Monogram Bank, USA. It became GE Capital Retail Bank before changing to Synchrony Bank in 2014. It’s currently headquartered in Draper, Utah. To access your cash, you can use any Plus or Accel ATM in the country.

Ally Bank vs. Synchrony: How their rates compare

As online banks, neither Ally Bank nor Synchrony are burdened with the cost of maintaining brick-and-mortar branches. Lower costs mean they can offer their customers some of the best savings account APYs in the industry.

 AllySynchronyNational average
Savings0.80% APY0.75% APY0.27% APY
Checking0.10% or 0.25% APY, depending on balanceN/A0.19% APY
1-year CD0.75% APY0.60% APY1.37% APY
5-year CD1.00% APY0.90% APY2.25% APY

Both banks generally outperform the national average on nearly all products. However, Synchrony offers higher rates than Ally Bank across the board, though it does not have a checking account product. Synchrony’s money market accounts also offer higher rates than Ally Bank’s, although MMAs from either bank aren’t quite as competitive as their savings accounts. Ally Bank’s MMA earns either 0.50% or 0.50% APY, depending on your balance, while Synchrony offers 0.50% APY on all money market balances.

As noted above, Synchrony doesn’t offer a checking account. Meanwhile, the lower 0.10% APY rate tier on Ally Bank’s Interest Checking account, which applies to balances less than $15,000, earns less than the national average. The higher 0.25% APY tier, for $15,000 and above minimum balances, beats the national average, but is only marginally higher than the national online bank average.

Ally Bank vs. Synchrony: Which has better account options?

If you’re looking to keep all your accounts in one place, then Ally Bank would be the better option. It offers a checking account, unlike Synchrony, making it a clear winner for many customers. Ally Bank also offers online savings, money market and CD accounts. Ally Bank has three different types of CDs available: High-Yield CDs, Raise Your Rate CDs and a No-Penalty CD. This lets Ally Bank customers pick the one that works best for their savings goals, especially if they’re worried about early withdrawal penalties or missing out on higher rates.

For retirement savings, Ally Bank offers the option to open its High-Yield CDs, Raise Your Rate CDs and Online Savings accounts in IRAs; you can also open Synchrony CDs or money market accounts in IRAs. In addition, Ally Bank makes it easy to access other financial products from its website, too, including auto loans, credit cards and investing accounts.

Another Synchrony demerit: It does not automatically offer ATM cards with its accounts. You will need to proactively request an ATM card to use with your high-yield savings account or money market account. Meanwhile, Ally Bank issues a debit MasterCard with your Interest Checking account, as well as standard checks and even postage-paid deposit envelopes.

Ally Bank vs. Synchrony: How they compare on fees

 AllySynchrony
Savings account$0 monthly fee

$10 excessive transaction fee
$0 monthly fee

$0 excessive transaction fee
Checking account$0 monthly feeN/A
ATM fees$0 Allpoint ATM fee$0 Plus and Accel ATM fee
Overdraft fees$0 overdraft transfer

$25 overdraft item paid or overdraft item returned (one fee per day max.)
Not allowed

Both banks offer customer friendly fee schedules. In short, they barely charge any fees for owning or using your accounts, especially when compared to traditional big banks. Ally Bank and Synchrony allow you to boost your savings by avoiding monthly maintenance and ATM fees.

In addition to free Allpoint ATM access, if you ever have to use a non-Allpoint ATM Ally Bank will reimburse you up to $10 per statement cycle in other ATM fees. Synchrony also offers free access to ATMs through the Plus and Accel networks, but will only reimburse you on other ATM fees up to $5 per statement cycle.

The two banks differ slightly on their overdraft policies. Ally Bank offers free overdraft transfers as long as you sign up for them. If not, you could end up paying $25 overdraft fees if you overdraw your accounts. In the event that you make more than one transaction that overdrafts your account, Ally Bank will only charge one overdraft fee per day. Synchrony, meanwhile, simply doesn’t allow you to overdraft your account if you have insufficient funds.

They also differ when it comes to excessive transactions on savings accounts. Ally Bank charges you $10 per transaction once you exceed six transactions in a statement cycle. Synchrony won’t charge you a fee if you go over the six transaction limit, but if you breach the limit on “more than an occasional basis,” the bank may choose to close your account for misuse.

It’s also important to be aware of the penalties assessed on early withdrawals from CDs. Luckily, Ally Bank offers some of the most favorable penalties, not including its No Penalty CD. Its penalties range from 60 to 150 days of interest, with the penalties increasing with the term lengths. Meanwhile, Synchrony’s penalties start at 90 days’ worth of simple interest and max out at 365 days of simple interest. However, Synchrony allows you to make partial withdrawals from a CD, while Ally Bank does not. If you want to make a withdrawal from an Ally Bank CD, you’ll have to withdraw all the money and close the account.

Who should bank with Ally?

Ally Bank

Online Savings Account from Ally Bank

SEE DETAILS Secured

on Ally Bank’s secure website

Member FDIC

“If you’re thinking of consolidating all your banking to one bank, Ally Bank would be a better choice,” advises Ken Tumin, founder of LendingTree-owned DepositAccounts.com. “They also offer a cash-back credit card and offer brokerage options for even more consolidating opportunities.” The bank’s wider array of not only bank accounts, but financial products in total, allows you to better choose an account that fits with your finances. Ally Bank also offers 24/7 phone customer service in addition to an online Live Chat feature.Ally Bank does fall slightly behind Synchrony in its rates and certain fees. Ally Bank charges fees for excessive transaction fee and overdraft items, while Synchrony does not. However, Ally Bank is better for those worried about early withdrawal penalties on CDs since it assesses lower charges than Synchrony does. Ally Bank also offers an 11-month No Penalty CD, which allows you to make a withdrawal at any time without facing a penalty.

Who should bank with Synchrony?

Synchrony Bank

If you’re simply looking for the higher rates, Synchrony is the way to go. It offers slightly higher rates than Ally Bank on all fronts, from its High Yield Savings account to its CDs.You’re automatically enrolled in Synchrony Bank Perks when you open an account. Then when you reach certain balance or time thresholds, the bank rewards you with extra perks for easier banking.

“Synchrony has a better loyalty perks program,” said Tumin. “For example, a Synchrony customer with five years of tenure (or a $250k+ balance) qualifies for three free wire transfers per statement cycle.”

Synchrony falls short in its account variety, especially with its lack of a checking account. Its account access is also a bit more limited, since you have to request an ATM card and its 24/7 phone access is limited to automated services.

Alternative options

If neither Ally Bank or Synchrony really calls out to you, not to worry. There are a ton of options out there whether you’re looking for higher rates, even fewer fees or something else entirely. For higher savings rates, consider Vio Bank, another online banking leader, which offers a 0.83% APY on its High Yield Savings account. For some of the best CD rates, you can check out The Federal Savings Bank, which currently offers 1.50% APY on its 5-year CD.

Credit unions are also great alternatives, especially as many of them are ramping up their interest rates on their CDs, in particular. Credit unions also typically offer an advantage for those who want some brick-and-mortar presence. Tumin also suggests PurePoint Financial, which he says has a history of higher rates.

National averages and any fees mentioned in this article were compiled and are accurate as of the date of publishing.

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