TIAA-CREF Bank: Retirement-Plan Giant Opens Online Bank

Simon Zhen

By , Staff Writer
Posted on Tue Feb 21, 2012, Last Updated on Tue Sep 16, 2014

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TIAA CREF Bank: Retirement Plan Giant Opens Online Bank

Brain Papantonio / Flickr source

TIAA-CREF, one of the more customer-friendly names in finance, has entered the online banking scene with bold offerings that give established competitors a run for their money. Among its products, the high-yield savings account deserves the most attention, with a 1.25% APY.

Called TIAA Direct, the new FDIC-insured online bank is a division of the more-recognized TIAA-CREF investment company that is known for offering investment, insurance and annuity products.

TIAA Direct launched last week, according to DepositAccounts.com.

Currently, the online bank offers a savings account, money market account, interest checking account and CDs.

Here are their rates as of Feb. 21, 2012:

ProductAPY (as of 2/21/12)Minimum balance required to earn APY
High Yield Savings1.25%$0
Money Market1.25%$0
Interest Checking0.05%$0
\"0.10%$1,500
\"0.15%$25,000
6-Month CD0.35%$1,000
1-Year CD0.90%$1,000
2-Year CD1.06%$1,000

TIAA Direct’s CD rates are in line with big-name competitors such as Discover Bank and Sallie Mae Bank, while its savings account takes the throne with the highest nationwide savings rate.

In addition to competitive interest rates, TIAA Direct offers consumer-friendly perks.

— No monthly service fees on all accounts.
— Free ATM card for savings and money market account. Free debit card for checking account.
— Free mobile banking application with remote check deposit for Apple iPhone devices.
— Free ATM access to MoneyPass or SUM ATM network.

TIAA-CREF Bank

TIAA-CREF is a well-known provider of retirement accounts, savings plans, life insurance, annuities and financial planning and management services.

In May 2011 report by Cogent Research, 63% of affluent plan participants expressed satisfaction with TIAA-CREF as the provider of their employer-sponsored retirement plans — topping other firms such as Vanguard, Fidelity and T. Row Price.

TIAA-CREF operates largely on a nonprofit basis, which means that financial gains are returned to customers. Its stock life insurance arm (TIAA) often distributes profits to policyholders through dividends. The College Retirement Equities Fund (CREF) is a not-for-profit corporation that gives investment returns back to participants.

The operations of TIAA-CREF resemble that of credit unions, which are regarded by consumers as better options compared to big banks. Credit unions are also nonprofit institutions that return surplus to members through low fees, higher deposit rates and lower borrowing rates.

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  • http://www.facebook.com/sunk818 sunk818

    I had a 403(b) with them years ago. I put them up there with Charles Schwab in terms of professionalism and knowledgeable staff.