re: Tell Me About Ally Bank

I use Ally and have no complaints. But I don't do anything more complicated than ACH and the occasional paper check (their photo-deposit app works fine).

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Is Ally all paid up? It seems like it from what I can find.

If so, this seems to put it on the same moral ground as:
Citi
BOA
Chase
Wells Fargo
Goldman, etc.

Or did they do something extra shady?

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Yes, they're all paid up. The US Treasury made money off the investment (14% ROI after about 5 years).

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Hijack question. I don't understand why people use multiple banks for personal use. I have so many various online accounts, I try to consolidate as much as possible into the same entities (banking/credit, phone/internet, etc). Only where it makes sense, of course. I happen to have Capital One credit cards and also use them for banking, so it works out.

Is there a good reason why you use both banks that I am missing?

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If you like the checking account at one bank but the savings account at another, why not have accounts at both? Most banks don't offer 1% interest savings accounts, but Ally does. If you keep a sizable cash savings for emergencies (which is a sound personal finance practice), then you might as well maximize the interest rate you get. So a lot of people use one bank for their checking account, then have their cash savings at a bank like Ally.

FDIC insurance limits may play a role for some. Also, while the risk to savings deposits is somewhat remote, diversifying banks is never a bad idea.

Regarding credit cards, I don't have any loyalty between who stores my cash and whose cards I use. I'm after points/rewards all day everyday for my credit cards and interest rate on my savings.