TIAA Direct Drops Savings Rate, Imposes Withdrawal Limits


Updated on Mon Jan 14, 2013

TIAA Direct, the online banking division of TIAA-CREF, has slashed the rates of its savings and money market accounts from 1.25% APY to 1.00% APY. This rate affect existing customers. The online bank stopped accepting new customers as of July 2012.

Additionally, in mail notices to customers, TIAA Direct said that ACH withdrawals will be limited to $5,000 per day, effective Feb. 13, 2013.

Despite the rate cut, TIAA Direct is still among the leaders in savings and money market rates.

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  • Jason Reposa


  • D Nick

    I received no notice of the decrease; did anyone?

    • Simon Zhen

      D Nick, banks are not required to inform customers when interest rates on their deposit accounts change.

      In the fine print, you’ll often find: “Rates may change at any time without prior notice, before or after the account is opened.” (This is from TIAA Direct’s Savings page.)

  • Health1au

    The rate cut is one thing, the 5K per day is quite another. For some of us, that means it can take months to get your money. What about withdrawals made from other portals?

    • Simon Zhen

      Health1au, I’ve confirmed with TIAA Direct that ACH withdrawals initiated from other banks will NOT be subject to the $5,000 limit.

      • Health1au

        Thanks — I also called them about that. Had it been otherwise, I would have pulled the entire amount out.

        • curls

          Thank you! Saved me lots of time & effort that you all posted this discussion!

  • finucane

    Down to .99% today. not happy but they are allowed to do it without notice.

    Never received the $5,000 limit withdraw notice that took effect 2 days ago, not happy about that.

    Why would an institution stop taking new customers?

    Can anyone explain “ACH” withdrawals and the difference of “withdrawals initiated from other banks”…

    Something smells fishy here!


    • Simon Zhen

      finucane, the rate is still 1.00% APY.

      Here’s why TIAA Direct stopped taking new customers:

      ACH stands for Automated Clearing House, an electronic network used by U.S. financial institutions to process transactions in batches — it is less costly and less individualized as transactions such as wire transfers.

      In the same way that you can log into your TIAA Direct account and request an incoming transfer of funds from, say, an Ally Bank checking account, you can log into your Ally Bank checking account and request an incoming transfer of funds from your TIAA Direct account. This transaction was initiated through Ally, not TIAA Direct.

      If you log into TIAA Direct and request an outgoing transfer of funds, you are subject to the $5,000 withdrawal limit because it was initiated from TIAA Direct.

      • finucane

        Thank you Simon…