By  Updated on Tue Jul 24, 2012

TIAA Direct Suspends New Signups, As Pilot Phase Ends

 

The young online bank that has been offering the leading rates on savings and money market accounts says it will not accept new account applications. TIAA Direct, the online banking division of mutual-fund giant TIAA-CREF, plans to make some improvements before re-opening account applications.

“We’ve just concluded a successful pilot of TIAA Direct,” the online bank said in a notice on its website. “Before moving on to the next phase, we will be making enhancements to the customer experience.”

Existing customers can continue to access their accounts as usual, while prospective customers won’t find any way to open a new account.

The success of the pilot is no surprise —  TIAA Direct’s online savings account and money market account (MMA) touts a 1.25% APY — the highest rate available at an online bank in the United States. TIAA Direct did not say if interest rates will change when applications for new accounts are accepted again. As all banks state in the fine print, rates are subject to change without prior notice.

No timeframe was provided on when the online bank will begin accepting applications again.

In the meantime, TIAA Direct will refine and streamline its internal systems and process, a spokesperson said.

The online bank currently offers a savings account, MMA, interest checking account and certificates of deposit (CDs).

Seeking alternatives

With TIAA Direct temporarily out of the picture, the top nationwide rate is offered by UFB Direct’s money market account at 1.25% APY. However, this account requires a $5,000 minimum opening deposit.

CIT Bank has a 1.05% APY savings account, but it requires a $25,000 balance. Otherwise, the account earns 0.90% APY. The less-stringent option can be found at Barclays’ online bank, which offers a savings account with 1.00% APY and no balance requirements.

As for CDs and interest checking accounts, Ally Bank and Doral Bank Direct offer better rates.

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