TIAA Bank is the online banking division of TIAA, a major financial firm that caters to “people who do good” – educators, public sector employees, nonprofit employees. TIAA Bank assumed its current configuration after acquiring the assets of TIAA Bank, a regional bank based in north Florida.
If you’re at all familiar with TIAA Bank’s products, TIAA Bank’s will seem eerily familiar to you. If not, you’re in for a pleasant surprise. Read on to learn more about TIAA Bank’s banking and lending services for consumers across the United States.
Yield Pledge Checking Account
TIAA Bank’s Yield Pledge Checking Account, billed as one of the oldest high-yield checking accounts, offers competitive interest rates, no account maintenance fees, and no-cost overdraft protection for clients who link their accounts to a TIAA Bank savings or money market account. The Yield Pledge name evokes a longstanding TIAA Bank policy (and, previously, TIAA Bank policy): Its interest rates always remain within the top 5% of all U.S. banks’ interest rates, as defined by Bankrate.com’s BRM National Index, which updates at the beginning of each month.
Upon opening a new account, for which a minimum deposit of $5,000 is required, account holders currently receive a 12-month introductory interest rate of 1.21% APY for balances up to $250,000. The current standard interest rate sits at 0.25% APY on balances up to $10,000, and rises to a maximum rate of 0.71% APY on balances between $100,000 and $10,000,000.
Yield Pledge Money Market Account
TIAA Bank offers a money market account under the Yield Pledge banner. This account guarantees that its rates remain in the top fifth percentile of all U.S. banks, as defined by the Bankrate.com BRM National Index, which is updated monthly. TIAA Bankrequires a $5,000 opening deposit and allows up to 6 outbound transfers or withdrawals per month, as per federal regulations – inbound transfers and deposits are unlimited.
As with TIAA Bank’s checking account, no monthly maintenance fees are associated with this product. New accounts are eligible for a 12-month introductory interest rate of 1.60% APY on up to $250,000 in deposits. Beyond $250,000, the rate on all funds (up to $10 million) is 1.50% APY. After the first 12 months, the APY drops to 1.10% APY on balances under $10,000; 1.15% APY on balances between $10,000 and $24,999.99; 1.25% APY on balances between $25,000 and $49,999.99; 1.35% APY on balances between $50,000 and $99,999.99; and 1.50% APY on balances above $100,000. These rates are subject to change on a monthly basis, as per the BRM Index.
Yield Pledge CD
TIAA Bank’s Yield Pledge CDs offer yet another top-fifth-percentile promise, again using the Bankrate.com BRM National Index as a benchmark. Like the company’s money market account, TIAA Bank CDs come with no maintenance fees, and require a $5,000 minimum deposit. Term lengths range from 3 months to 5 years, and interest rates range from 1.60% APY on the shortest-term vehicle to 2.90% APY on a 5-year CD. The popular 12-month CD yields 2.35% APY. This rate schedule is unusually generous – TIAA Bank is one of the few online banks whose entire CD catalog yields 1.25% APY or greater.
Upon maturity, TIAA Bank CDs automatically roll over into identical vehicles, although the company does provide 20 days of warning before the rollover date. The penalty for withdrawing early is steep: 25% of all interest that would have been earned over the full term of the CD, for all CDs. This means that you can lose principal if you withdraw before your CD reaches the one-quarter mark of its term.
Bump Rate CD
TIAA Bank’s Bump Rate CD has a 42-month term, during which account holders have the option to raise their rate once if prevailing rates rise. The Bump Rate CD’s APY starts at 2.70% APY on balances up to $250,000, which is also the maximum deposit amount. A minimum deposit of $1,500 is required to open a Bump Rate CD account. The maturity warning window is 20 days.
Basic Checking Account
TIAA Bank’s Basic Checking Account is a no-yield checking account that requires a $25 minimum opening deposit and has no monthly account fees as long as you maintain an average daily balance of $25. If you don’t maintain the minimum daily balance, you pay $5 per month (except New York State residents, who are exempt by law).
Basic Savings Account
The Basic Savings Account is a lower-yield savings account that requires a minimum opening deposit of $25 and a minimum daily balance of $25 to avoid the $5 monthly account fee. The yield 0.61% APY on all balances, but can vary with prevailing rates. As with the High-Yield Savings Account, outbound transfers are limited to 6 per month by federal regulations.
TIAA Bank’s Basic CDs have terms ranging from 3 months to 5 years. Yields are slightly lower than comparable-term Yield Pledge CDs, ranging from 1.35% APY on the 3-month CD to 2.65% APY on the 5-year CD. These yields apply to balances up to $1,000,000. There’s a $1,000 minimum deposit requirement for all accounts and a 20-day maturity warning.
Foreign Denominated Deposits
Advanced investors and savers to take advantage of currency fluctuations by making foreign-denominated deposits into TIAA Bank’s Access Accounts, CDs, and CD Baskets. These accounts currently offer access to approximately 20 foreign currencies, including popular denominations such as the Australian dollar, the euro, and the pound sterling, as well as less common varieties such as the Hungarian forint, Danish krone, and Polish zloty. Interest-bearing CD accounts are available in some – but not all – of these currencies.
When an account holder deposits or redeems foreign-denominated funds for U.S. dollars (or vice versa), TIAA Bank pays out within 1% of the prevailing market exchange rate, which is an unpublished, variable rate that governs currency exchanges between banks. Basically, the markup that it charges for currency exchanges isn’t constant, but it does not exceed 1% under normal circumstances.
As deposit accounts, all of TIAA Bank’s foreign currency products are FDIC-insured up to a limit of $250,000 per account. However, this insurance only covers funds lost due to a failure of TIAA Bank itself. It doesn’t cover potential losses due to depreciation of the currency in which your funds are denominated relative to the U.S. dollar. Minimum deposits range from $2,500 (or $100 per month) for the Access Account to $20,000 for the CD Baskets.
Rewards Credit Card
The TIAA Bank Rewards Card is exclusively for TIAA customers. It has no annual fee and a fairly generous rewards program that you can opt to structure as a points-based or cash-based scheme:
- 3 points per $1 spent or 3% cash back on eligible gas and grocery purchases
- 2 points per $1 spent or 2% cash back on eligible wholesale club purchases
- 1 point per $1 spent or 1% cash back on all other eligible purchases
If you opt for cash, you can redeem for cash back rewards once you hit requisite (variable) thresholds. If you opt for points, you can redeem for gift cards, merchandise, experiences, and other items in the reward portal. Check with TIAA for important exclusions and limitations.
CDARS Service for Higher FDIC Limits
TIAA Bank offers access to the Certificate of Deposit Account Registry Service (CDARS), which provides FDIC insurance above the typical $250,000 account balance limit. The company’s CDARS products include 3-, 6-, 12-, 24-, and 36-month CDs that yield between 1.36% APY and 2.12% APY, depending on term length. There’s a $12.5 million funding limit on the three shorter-term CDs. The 24- and 36-month CDs have lower limits of $2.5 million and $1 million, respectively.
All TIAA Bank CDARS accounts require minimum deposits of $10,000, lack maintenance fees, and come with 15-day maturity warnings. Per CDARS’s regulations, automatic rollovers aren’t available on these products. However, clients are free to open new CDARS accounts when their old ones mature.
Mortgages and Refinancing Products
TIAA Bank markets traditional, jumbo, FHA, and VA mortgages to individual clients. Within these categories, borrowers can find 15- and 30-year fixed mortgages, as well as 5/1 ARMs. Although rates vary according to borrowers’ credit scores, borrowing amount, and geographical location. For borrowers with excellent credit, rates are competitive with other major banks in the same geographical area.
TIAA Bank’s mortgage products are available through the company’s internal lending department and local partner lenders in all 50 states. Current homeowners also can find a range of refinancing and leverage products, including home equity loans and loans that shrink or lengthen terms on traditional and jumbo mortgages. In addition, the company also helps underwater homeowners (those who owe more than the current value of their homes) refinance their mortgages through the federal Home Affordable Refinance Program (HARP).
Finally, TIAA Bank offers access to the Federal Housing Authority’s Streamline Refinance Program. This is a limited-time initiative that also helps underwater homeowners remain in their homes.
Precious Metal Investments
First, TIAA Bank’s allocated accounts facilitate direct, undivided investment in physical gold and silver. With an allocated account, you can take physical delivery of individual bars or coins, including gold and silver bars that range from one to one hundred ounces, and one-ounce gold and silver coins issued by the American, Austrian, Canadian, and South African governments. These require a minimum deposit of $7,500 and accrue storage fees for clients who don’t take physical delivery.
Second, unallocated accounts are previous metal investment pools with many different participants, and they don’t facilitate undivided ownership of physical gold or silver. However, unallocated accounts do facilitate ownership of fractional shares of bars and coins – you own a specific amount of gold or silver, but you are not assigned to a particular bar or coin. They require a minimum one-time deposit of $5,000, or a commitment of at least $100 per month to an ongoing purchase plan.
It’s not possible to take delivery of metals included in an unallocated account, but TIAA Bank doesn’t assess storage fees on them either. TIAA Bank’s precious metals offerings aren’t FDIC-insured, but they are insured by the Securities Investor Protection Corporation.
Individual TIAA Bank account holders can open traditional and Roth IRA accounts, which can hold bank account products such as Yield Pledge money markets and CDs, as well as foreign currencies, precious metals, stocks, options, bonds, and mutual funds.
TIAA Bank offers a full lineup of accounts for business clients. These generally mirror its options for individual depositors – its checking, money market, CD, and CDARS accounts also apply to businesses – although rates on checking accounts for larger businesses are lower. TIAA Bank also offers some business accounts that aren’t available to individuals, including a checking account that doesn’t pay any interest and a Business Analysis Checking product that provides fee credits for companies with high transaction volumes.
Like individual depositors, business clients can also open foreign-denominated accounts, but TIAA Bank offers a special foreign exchange service for companies that need to exchange U.S. dollars for other currencies on a regular basis. This service offers better exchange rates than individual accounts, for which currency exchanges can cost up to 1% of their total value. TIAA Bank doesn’t offer retirement products, such as 401k plans, for businesses.
1. Access to a Multitude of Savings and Investment Vehicles
Some online banks, such as Ally Bank, are known for offering solid interest rates on a small number of accounts – checking, savings, money market, and CDs for the former, and savings and CDs for the latter. Others, such as Capital One 360, allow users to open deposit accounts and trade securities through an in-house brokerage account.
TIAA Bank offers the best of both worlds. In addition to common account types like checking and savings, which all offer competitive interest rates, TIAA Bank lets depositors open accounts through which they can purchase precious metals or foreign currencies. Though TIAA Bank has no in-house brokerage, its parent company does offer brokerage services.
2. Lots of Options and Flexibility for High-Asset Accounts
On top of its comprehensive savings and investment options for rank-and-file clients, TIAA Bank caters to high-asset account holders and small- to medium-sized business clients.
Ally, Capital One 360, and FNBO Direct don’t work with CDARS, the organization that provides FDIC insurance on individual CDs worth more than $250,000. They also don’t have separate wealth management divisions that provide expert strategic advice and manage portfolios, which may include currencies, equities, bonds, CDs, and precious metals. Such services are more common at high-end investment firms like Franklin Templeton and full-service brokerages such as Schwab, which don’t have flexible deposit accounts like TIAA Bank.
3. ATM Reimbursements for Qualifying Accounts
TIAA Bank reimburses all ATM fees charged by U.S. banks on an unlimited basis, provided that the account holder maintains a balance of at least $5,000 during the pertinent statement period. Some online banks, including Ally Bank, reimburse ATM fees as well. However, brick-and-mortar banks like Wells Fargo and Bank of America are much more stingy about this, often limiting reimbursements during a statement period or refusing to reimburse any fees incurred outside their ATM networks.
4. Highly Competitive Checking Yields
Yields on TIAA Bank’s high-yield checking account is far more generous than those of other banks. Many brick-and-mortar banks, such as Wells Fargo and Bank of America, don’t pay interest on funds in checking accounts – and yields on their savings accounts are often laughably low as well, amounting to just less than 0.05% in both cases. With TIAA Bank’s Yield Pledge, which is a literal pledge to keep its checking yields in the top fifth percentile relative to its U.S.-based competitors, customers don’t have to worry about rates not being competitive.
5. No Overdraft Fees With Linked Accounts
Even if they lack sufficient funds in their checking accounts, TIAA Bank customers don’t have to pay overdraft fees if they link them with in-house money market or savings vehicles from which the bank can automatically pull. This safety net is limited by restrictions on outbound transfers – no more than six per statement period.
TIAA Bank also allows customers to opt in to a personal overdraft line of credit that provides a cash advance, at rates under 10%, in the event that the linked account lacks sufficient funds to cover an overdraft. There’s no fee for this credit line, but interest begins accruing on the day of the overdraft and continues to accrue until the full advance has been paid down. Customers who don’t want to open another account with TIAA Bank can opt out of overdraft protection altogether.
6. Low Credit Card Rates
TIAA Bank’s Visa Platinum Credit Card comes with a lower standard APR (as low as 11% on purchases and balance transfers) than many other credit cards with similar terms, including products from Chase (like the Chase Freedom Credit Card) and Citi (like the Citi Double Cash Card).
Additionally, it charges no annual fee and comes with a rewards program that pays $0.01 for every $1 in qualifying purchases, without earning caps. Your cash-back rewards can be redeemed as a statement credit or for purchases at qualifying retailers, restaurants, and travel companies. Few cards can claim this combination of low standard APR and a strong, no-limit rewards program, making the Visa Platinum Card a real standout.
1. No High-Yield Savings Accounts
For such a comprehensive institution, TIAA Bank has a curious omission: it doesn’t offer any high-yield savings accounts in the mold of Ally’s High-Yield Savings Account, which always pays north of 1.00% APY. The upshot is that TIAA Bank’s Yield Pledge Checking boasts savings account-like yields, and the Basic Savings account has a decent yield as well.
2. High Minimum Deposit Requirements on High-Yield Accounts
TIAA Bank’s Yield Pledge accounts have high minimum deposit requirements: $5,000 for Yield Pledge Checking, Money Market, and CD accounts. By contrast, many online banks, including Ally Bank, don’t require minimum deposits for checking, savings, or CD accounts with tangible yields.
For savers who want to spread their money across multiple high-yield accounts or simply don’t have a lot to invest, TIAA Bank’s account-size restrictions can quickly become onerous. TIAA Bank also imposes a $5,000 minimum balance requirement for ATM fee reimbursements, creating a major drawback for checking account holders who can’t meet these minimums and aren’t near a physical TIAA Bank branch. You can avoid minimum deposit and ongoing balance requirements with TIAA Bank’s Basic accounts, but those accounts’ yields aren’t nearly as competitive (and, in the case of Basic Checking, are nonexistent).
3. No Lending for Autos or Other Big-Ticket Purchases
TIAA Bank’s individual and commercial mortgage options, not to mention its refinancing vehicles, have a lot to offer for prospective homebuyers and commercial real estate developers. Unfortunately, its lending operations don’t extend to auto lending or other big-ticket purchases. By contrast, Ally Bank has a robust auto lending operation, and GE Capital Retail Bank offers financing for everything from furniture and residential appliances, to medical bills and jewelry.
4. Limited Access to Fee-Free ATM Withdrawals
Banks with nationwide physical branch networks, such as Wells Fargo and Chase, have thousands of branded ATMs scattered about the country, making it easy for depositors to access their money without paying third-party ATM fees. By contrast, TIAA Bank has a relative handful of its own ATMs (fee-free for all account holders), mostly at its dozen Florida bank branches. Unless they can maintain a checking account balance of at least $5,000, TIAA Bank customers who use their debit cards at a non-TIAA Bank ATM must pay any fees charged by the ATM’s owner.
5. No In-House Brokerage or Wealth Management Services
TIAA Bank customers can invest with TIAA’s brokerage, which provides a range of options for passive and active investors, but there’s no way to do so directly through TIAA Bank’s online banking portal. TIAA Bank also has no in-house wealth management vertical, a blow to the company’s high-net-worth customers. The TIAA Personal Portfolio platform partially makes up for this deficiency with a low-priced hybrid investment management approach that blends robo-advising with a human touch.
By comparison, some competitors have fully integrated brokerage verticals. Ally Bank has Ally Invest, for instance, and TD Bank has long had a close association with TD Ameritrade, a full-service broker. If you’re looking for a one-stop shop for spending, saving, and investing in stocks, ETFs, mutual funds, and bonds, look to one of those options instead.
TIAA Bank is a full-service online bank that also has physical branches in Florida and a handful of mortgage lending outposts across the south-central United States. Its flagship product, the Yield Pledge Checking Account, offers one of the best checking account yields of any national bank, and its money market accounts and CDs are competitive, as well.
At the same time, many TIAA Bank accounts require high minimum deposits, and its ATM fee reimbursements don’t kick in until account holders keep more than $5,000 in a single checking account. Unlike Capital One 360, which actively caters to smaller savers and investors while limiting options for advanced investors and high-asset savers, TIAA Bank definitely sets its sights on a wealthier, more discerning set.
If you have ample reserves of cash and can easily clear the company’s minimums, you could reap solid rewards from its high-yield accounts and personalized financial services. However, if you’re just starting out down the savings trail, a friendlier bank like Ally or Capital One 360 might be more your speed.
Do you bank with TIAA Bank?