TIAA-CREF launches online bank with top savings rates
A leading retirement funds manager has taken a big step into online banking, and it has the yields to prove it.
TIAA-CREF recently began offering checking, savings and CD accounts through TIAA Direct, an FDIC-insured online bank that also offers mortgages and home equity loans.
TIAA Direct's high-yield savings account pays 1.25% APY, making it the best nationally available savings account in the country.
To open the savings account, you'll need to make an initial deposit of at least $25. But there is no minimum balance requirement, no monthly fee and no maximum balance on which you'll earn the 1.25% APY.
TIAA Direct also offers a money market account that pays 1.25% APY.
Unlike the savings account, you can write up to six checks per month from the MMA account.
You'll find just four other banks offering money market or savings accounts nationwide that pay at least 1% as of Feb. 28, 2012:
The two online divisions of New York Community Bank require a minimum deposit of $5,000 to open an account. If your balance falls below $5,000, you'll earn 0.25% APY.
Incrediblebank, the online division of River Valley Bank of Rothschild, Wis., pays 1.05% APY on balances between $2,500 and $249,999 on its money market account. Any portion of balances above that amount earn 0.60% APY. A $2,500 minimum deposit is required to open an account.
Salem Five Direct, the online division of Salem Five Bank in Salem, Mass., pays 1.00% APY on its savings account with a $100 minimum deposit. The rate is good on deposits up to $500,000.
The Salem Five savings rate is guaranteed through August on new accounts. Customers with existing savings accounts or branch bank checking accounts are not eligible.
Of course, none of the other top accounts feature rate guarantees, which means they can cut interest rates at any time.
It's yet to be seen if TIAA Direct intends to remain competitive or if this is simply an introductory rate to increase deposits.
As for TIAA Direct's other savings products, unfortunately its CD rates aren't nearly as competitive. It offers 6-, 12- and 24-month CDs, none of which come close to matching the best nationally available deals.
Its checking account also doesn't pay much interest, but TIAA Direct advertises no monthly fees, remote deposit capture and free transactions at more than 23,000 ATMs nationwide.
TIAA Direct is a division of TIAA-CREF Trust Co., FSB.
TIAA-CREF’s core focus has been providing financial services and planning for those in the academic, medical, cultural, government and research fields.
To qualify for our list of top savings accounts, a bank must allow savers from all 50 states to open a savings account or money market account online or through the mail.
See how these deals compare to the best money market and savings rates from scores of other banks in our database.