If you’re shopping for an online bank, you’ve probably come across SoFi and Ally in your search. These two banks are major players in the online banking space.

And it’s no wonder why. With excellent rates, no monthly fees and overdraft protection, you’ll likely be happy with either choice.

However, there are a few important differences to consider before deciding between the two. For example, SoFi’s savings account earns a higher rate than Ally’s but requires direct deposits to earn it.

Here’s a closer look at SoFi and Ally, their product offerings and how to know which is right for you.

SoFi vs. Ally Bank: Overview

About SoFi

Stanford University business students founded Social Finance, Inc. (SoFi) in August 2011. In May 2012, it became the first company to refinance federal and private student loans.

Today, SoFi offers a wide array of financial products, including deposit accounts, student loans, personal loans and mortgages. It’s headquartered in San Francisco, California, with over 8.8 million customers. The bank has funded over $73 billion in loans, and its members have paid off over $34 billion in debt.

About Ally Bank

Ally Bank has been in business for over 100 years. It’s a top 25 U.S. holding company based in Detroit with over $193 billion in total assets and around 11 million customers.

The bank emphasizes corporate social responsibility. It has received three consecutive outstanding CRA ratings, which evaluate a bank’s ability to meet the credit needs of its communities — especially low and middle-income communities. Ally is also in its third year of operational carbon neutrality for Scope 1 and 2 emissions.

SoFi vs. Ally Bank: Account options

When considering SoFi and Ally’s account options, keep in mind that both banks are FDIC-insured up to $250,000 per depositor.

Both SoFi and Ally provide interest-bearing checking accounts. With SoFi, your checking balance earns 0.50% APY. Ally offers lower rates, with 0.10% APY if your balance is less than $15,000 and 0.25% if it’s above $15,000.

For overdraft protection, SoFi will cover you up to $50 if you overdraw on your account. However, to qualify, you must receive at least $1,000 in direct deposits every 30 days. Ally gives you $100 in standard coverage or up to $250 if you directly deposit $250 two months in a row.

Ally also lets you set up spending buckets to set aside money for upcoming expenses, such as rent or groceries. You can also receive up to $10 per month in ATM reimbursements.

When you sign up for SoFi’s checking account, you automatically get a savings account as well. Your savings balance earns up to 4.20% APY if you set up direct deposits or make at least $5,000 in other qualifying deposits every 30 days.

Although Ally’s savings account earns a slightly lower rate of 4.20%, it doesn’t have any requirements to receive that APY.

Each bank’s savings option pays an APY that falls slightly below the APYs offered by the best high-yield savings accounts.

SoFi is currently offering a $100 welcome bonus if you direct deposit at least $1,000 within the 25-day evaluation period. However, with $5,000 or more in direct deposits, you can earn a $300 bonus.

Both banks let you set up savings goals so you can put money away for different objectives simultaneously. For example, you can separate your savings for a house, travel and an emergency fund.

Certificates of deposit (CDs)

Although SoFi offers several financial products, it has yet to add certificates of deposit (CDs) to its product line.

Ally, however, provides three types of CDs: high-yield, no-penalty and bump-up. All of its CDs have the Ally Ten Day Guarantee, meaning if you open and fund your CD within 10 days, you’re guaranteed to get the best rate if the bank raises the APY of your term and balance tier during that time.

If you renew your CD with Ally, you might also receive a loyalty reward of 0.05%. However, check closer to the maturity date to see if Ally has changed this offer.

None of Ally’s CDs require a minimum opening deposit. Here are the rates that it currently offers on its CDs:

SoFi vs. Ally Bank: Which offers higher APYs?

When comparing APYs alone, SoFi is the clear winner. However, you have to set up direct deposit to earn its best savings rate.

Ally, on the other hand, offers lower rates, but you don’t need to do anything to earn its advertised APY.

The national average rate for savings accounts is 0.46%, which both SoFi and Ally Bank blow out the water. And most checking accounts don’t offer any interest at all, so you’ll do well with either bank.

Ally also offers some of the best CD rates. The average rate for a 6-month CD is 1.82%, but Ally’s high-yield 6-month CD pays 4.80% APY.

SoFi vs. Ally Bank: Which has lower fees?

One reason SoFi and Ally rank among the best online banks is their commitment to minimizing customer fees.

Neither bank charges monthly fees or requires minimum balances. They both offer free overdraft protection, so you won’t have to pay a fee if you can’t cover a transaction.

Ally reimburses up to $10 per statement cycle in surcharges from out-of-network ATMs. The bank is direct about the fees it does charge: $15 for expedited delivery and $20 for outgoing domestic wires.

If you need to deposit cash into your SoFi account, its partner, GreenDot, may charge a fee of up to $4.95. However, there’s no way to deposit cash with Ally, so it’s at least nice to have the option with SoFi, even if you have to pay a fee.

SoFi vs. Ally Bank: Banking experience

Since both banks are digital, you won’t be able to just walk into a branch if you need help. That means you’ll have to rely on the bank’s customer service line, website and mobile app.

You can call SoFi Monday through Thursday from 5 a.m. to 7 p.m. or Friday through Sunday from 5 a.m. to 5 p.m. The bank has an excellent 4.5 out of 5 stars on Trustpilot. However, it has 1.49 stars on the Better Business Bureau (BBB) website, with over 1,950 complaints closed in the last three years.

SoFi’s mobile app has a stellar 4.8-star Apple Store rating and a 3.9-star Google Play rating.

Ally’s customer service line for banking is available 24/7. However, the bank has a poor rating on Trustpilot, with 1.2 stars from over 680 reviewers. It’s rated 1.13 stars on the BBB website, with over 500 complaints closed in the past three years.

The mobile app for Ally has a fantastic 4.7-star Apple rating but only a 2.3 Android rating.

Who should choose SoFi?

SoFi is best for people who receive regular direct deposits, such as paychecks, a pension or government benefits. However, it may still be a solid option if you can make $5,000 in other qualifying deposits each month.

If you can’t meet either deposit requirement, you won’t earn SoFi’s up to 4.20% APY on your savings.

SoFi can also be a great choice for free financial advice, said Annie Cole, founder and money coach at Money Essentials for Women and author of “101 Ways to Earn More, Build Wealth and Live Rich in Your 30s.”

“SoFi offers financial planning at no additional cost, which is huge,” said Cole. “If you’re a beginning investor, or you just want some extra advice, Ally provides personal advice for a fee when you have $100,000 or more, whereas SoFi offers financial planning at no cost.”

Cole also mentioned that SoFi had a lot of interesting loan options:

“They offer private student loans and family planning loans,” she said. “So you could get a loan for IVF, for example, a wedding or travel.”

Who should choose Ally Bank?

If you can’t meet SoFi’s deposit requirements, you’ll only earn 1.20% APY on your savings. You’re also locked out of its overdraft program without at least $1,000 in monthly direct deposits. In that case, you’ll likely fare better with Ally.

Ally also wins by default in the CD department since SoFi doesn’t offer them at all. And with speculation that the Fed will decrease rates in September, time may be running out to secure a competitive APY with an Ally CD.

“The media is [saying] it’s the best time to get a CD because if interest rates drop, we’re going to want to lock in the highest rate possible in a CD,” said Cole. “Whereas if you put your money in a high-yield savings account, that rate could change over time.”

Here’s the bottom line: if you receive monthly direct deposits, SoFi is likely the best choice. While Ally is still an excellent bank, it’s probably only the better option for people who don’t get regular direct deposits or who want to open a CD.

Editorial Disclaimer: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines, hotel chain, or other commercial entity and have not been reviewed, approved or otherwise endorsed by any of such entities.

This content is for educational purposes only and is not intended and should not be understood to constitute financial, investment, insurance or legal advice. All individuals are encouraged to seek advice from a qualified financial professional before making any financial, insurance or investment decisions.

Note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed or may no longer be available.

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SoFi vs. Ally: Which bank is right for you?