TIAA Bank Review 2023 – High-Yield CDs and Investments in World Currencies
Established as a consumer bank in 1998 but with roots stretching back to the 1960s, EverBank made a name for itself online thanks largely to its high-interest–bearing savings products.
Then financial services organization TIAA bought EverBank in 2017 for $2.5 billion. In June 2018, EverBank was rebranded as TIAA Bank.
But is TIAA Bank a good choice for your money? We checked it out, and this is what we found.
Commissions & Fees - 10
Customer Service - 9
Ease of Use - 8
Locations - 2
Savings Options - 9.5
Rates - 9
What Is TIAA Bank?
Based in Jacksonville, Florida, TIAA Bank is a diversified financial company that offers banking and investing services, along with mortgages. It’s primarily an online bank, and it recorded assets of more than $34 billion in March 2018.
TIAA Bank's product line includes high-interest checking, money market accounts and certificates of deposit (CDs). It also participates in the Certificate of Deposit Account Registry Service (CDARS), which enables the bank to provide CDs in excess of the FDIC maximum insurance coverage of $250,000 per depositor, per bank.
TIAA Bank Features
|Accounts||Savings, Checking, Money Market, CDs|
|Access||Web Based, iPhone App, Android App, Blackberry App|
|Amount of Branches||11|
|Customer Service||Phone: 24/7; Email|
How TIAA Bank Works
Except for a very small number of branches in the state of Florida, TIAA Bank functions as a fully online bank. There are no banking branches in other states, nor does the bank offer ATMs. However, it does offer reimbursement for ATM fees charged by other banks. You may also see TIAA Bank mortgage lending offices in other parts of the country. Note that these cannot handle banking transactions.
Online banking comes with bill pay and account alerts to keep you up to the minute on your accounts. You can arrange direct deposit through your payroll administrator, your pension manager or even the Social Security Administration.
The TIAA Bank mobile app is available at Google Play for Android phones and tablets and the App Store for Apple's iPhone and iPad. You can use the app to deposit checks, check balances, find a participating ATM, pay bills to current payees and make internal transfers. The mobile app is available with fast passcode or Touch ID sign-on.
You can also make mobile payments with Apple Pay, Android Pay and Samsung Pay.
TIAA Bank Signup
TIAA Bank has a three-step application process:
- Apply online
- Fund your account (see funding options below)
- Start banking
Funding Your Account(s)
Accounts can be funded by mobile deposit, paper check, wire transfer or online transfer from either another TIAA Bank account or an account with another bank.
On all accounts except checking accounts, there is a limit of six transactions per month per account. Transactions include ACH transfers, debit card transactions, checks, preauthorized or automatic withdrawals, and transactions initiated by phone, internet or mobile device.
With TIAA Bank, your assets are protected by the FDIC. Typically, FDIC insurance protects depositors for up to $250,000. However, an additional program allows depositors to invest excess funds in CDs in other network banks.
The Certificate of Deposit Account Registry Service (CDARS) allows depositors to invest with broader FDIC coverage. Through the program, TIAA Bank distributes your funds into CDs at other banks within the network. The net result is that you can invest in a basket of CDs with millions of dollars and still enjoy FDIC coverage.
This is because FDIC coverage is limited to $250,000 per depositor, per bank. But since your funds will be distributed across several different banks, you can hold CDs worth much more.
The CDARS program requires a minimum of $10,000 to open an account, up to a maximum of $12.5 million. There are no account fees and no setup charges. You’ll also get a 15-day maturity alert.
|Accounts||Savings, Checking, Money Market, CDs||Savings, Checking, Money Market, CDs||Savings, Checking, Money Market, CDs|
CIT Bank. Member FDIC.
TIAA Bank Checking
TIAA Bank offers two different checking account options:
Basic Checking. This account comes with no minimum account balance. It requires only $25 to open an account. It comes with mobile check deposits, free online bill pay and mobile payments. There is a $5 monthly account fee ($0 for New York residents), but this is waived with an average daily balance of $25 or more.
Yield Pledge Checking. This is TIAA Bank’s interest-bearing checking account. It requires a minimum of $5,000 to open an account. TIAA Bank is currently offering a one-year intro annual percentage rate (APY) of 1.01% on all balances. This compares favorably with Ally Bank, which offers an interest-bearing checking account that yields an APY of only 0.10% for balances below $15,000 and 0.50% for balances above.
The account comes with mobile check deposits, no monthly account fee, free bill pay, mobile payments and unlimited ATM fee reimbursements, as long as you maintain a minimum average daily balance of $5,000.
TIAA Bank Savings Account
TIAA Bank Savings
You can open an account with as little as $25 ($0 for Rhode Island residents). There is a monthly account fee of $5; however, it’s waived if you maintain an average daily balance of at least $25. The account comes with mobile check deposits and is IRA eligible.
Note that you are limited to no more than six transactions per month for this account.
|Account Fees||$5; $0 (if you maintain an average daily balance of $25)|
TIAA Bank Money Market
Yield Pledge Money Market
|Available For||Taxable,IRA||Account Fees|
TIAA Bank CD Rates
This CD can be opened with as little as $1,000 and a maximum of $250,000. It comes with terms between three months and five years. It has an automatic rollover provision and is IRA eligible.
Yield Pledge CD
This CD requires a minimum of $5,000 to open and a maximum of $250,000. It has no monthly account fee and is eligible for automatic rollover. It's available for IRA accounts as well. Terms range from three months to five years.
3.5-Year Bump Rate CD
This CD requires a minimum of $1,500 to open and up to a maximum of $250,000. It offers a one-time rate bump, which allows you to get the benefit of a higher rate after you’ve locked in the original rate. The CD has a term of 3.5 years, as the name implies, and is currently paying an APY of 1.65% on all balances.
The CD is IRA eligible and comes with an automatic rollover feature. The one limitation is that you may hold only one Bump Rate CD at a time.
Other TIAA Bank Investment Accounts
TIAA Bank also offers some other investment alternatives.
TIAA Bank has two different investment groups: foreign currencies and precious metals. Foreign currencies are tied to certificates of deposit, which are themselves tied to the performance of the underlying investment. Precious metals can be purchased directly.
Foreign Currency CDs
TIAA Bank CDs enable you to invest in 20 different foreign currencies. Interest is paid on the CDs based on the prevailing rates of the issuing country (but be aware that some currencies pay no interest). However, fluctuations in the value of the currency against the U.S. dollar could result in loss of principal. But should those currencies appreciate against the dollar, you’ll reap a gain. It’s a way of adding geographic diversification to your investment portfolio.
TIAA Bank has foreign-currency experts on call to help you through this process. There is a markup of 1% or less when you convert US dollars to a foreign-currency CD, and again back into U.S. dollars. However, this markup is waived if the transaction is for at least $100,000. Foreign-currency CDs are covered by FDIC insurance against failure by the bank but not against market fluctuations.
Available Foreign Currency CDs include the following:
World Currency CDs: Minimum $10,000 to open, and terms between three months and 12 months. The CDs are IRA eligible. There is no monthly account fee.
World Currency CD Baskets: These are baskets of currencies based on a specific category or industry sector. For example, a commodity CD basket will include currencies from Australia, Canada and South Africa. The BRICS CD includes currencies from Brazil, Russia, India and South Africa. We can think of them as something like currency ETFs for specific categories.
Each of these CDs requires a minimum of $20,000 to open, with three- and six-month terms. They are eligible for IRA accounts. There is no monthly account fee.
WorldCurrency Access Deposit Account
This is constructed similar to a money market account, and it enables you to hold, transact and earn money in foreign currency. It requires a minimum of $2,500 open, or a $100 (or more) per month purchase plan. This account is also available for IRAs.
As part of the WorldCurrency Access Deposit program, TIAA Bank also offers its Automatic Purchase Plan for foreign currencies. It’s a way to invest in foreign currencies through dollar cost averaging. You can start with as little as $100 per month, funded with automatic withdrawals from a companion cash management account. It allows you to invest in any one of 21 foreign currencies.
TIAA Bank enables you to purchase gold, silver, platinum and palladium. Metals can be purchased either in coins or bars. You can purchase precious metals within 1% of the price available to TIAA Bank. American Golden Eagles can be held in an IRA account.
Your precious metals account includes monthly account statements and also lets you accept home delivery of metals, for an extra fee ranging from 1% to as high as 1.75%. These accounts are not FDIC insured.
Two types of programs are available, Allocated and Unallocated.
Allocated means you’ll own an undivided interest in a specific quantity and type of metals stored at a third-party repository in bulk form, in TIAA Bank’s name. This plan requires a minimum initial investment of $7,500.
There is an annual account fee for an Allocated account, as follows:
- Gold, 1.5% of the average daily account value of the metal in your account
- Silver, 2.5%
- Platinum, 1.5%
- Palladium, 2.0%
Unallocated is an account in which TIAA Bank will hold an undivided pool interest in the metal on your behalf. The physical metal is also maintained by a third-party repository. There is no specific segregation or designation of particular types of metals. This plan requires a minimum initial investment of $5,000, or you can set up an Automatic Purchase Plan with a minimum of $100 per month.
TIAA Bank Pros & Cons[table “proscons” not found /]
TIAA Bank is definitely one of the most innovative online banks. Where else can you invest in high-yield CDs and also take positions in foreign currencies and precious metals? This actually makes TIAA Bank something of a bank/brokerage hybrid.
The lack of local branches and ATMs is a definite limitation. However, this is hardly unusual for online banks. The main attraction of TIAA Bank is high yields on savings products, and the lack of support facilities is understood by depositors.
The most curious aspect of TIAA Bank’s product portfolio are the Foreign Currency CDs. The term “CD” implies a certain level of predictability and safety that actually isn’t part of these securities. They’re actually speculations held in CD form, with all of the usual risks associated with foreign currency investments.
Still, TIAA Bank presents a good an unique opportunity to earn interest and profit from alternative investments, if you desire that for your personal portfolio.