TIAA Bank review: low fees, competitive rates

Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.

TIAA is an online bank with 11 branches in Florida. The TIAA Yield Pledge® Checking Account and TIAA Yield Pledge® Money Market Account are its strongest products. Both offer generous out-of-network reimbursements and a debit card with unique money-saving capabilities.

Although the TIAA Basic Savings Account and TIAA Yield Pledge CD aren’t as strong as the checking and money market accounts, they’re still respectable products. The downsides are that you can find a higher savings account rate at other online banks, and the CDs have a high minimum deposit and early withdrawal penalties.

Regardless of which accounts you open, TIAA Bank is a worthwhile option if you value low fees.

You may like banking with TIAA if you:

• Are comfortable banking digitally, OR live near a branch in Florida
• Value earning interest on your checking account balance
• Prioritize low or nonexistent monthly fees
• Want a variety of CD options
• Want a money market account that comes with a debit card and paper checks
• Are attracted to a debit card that includes extended warranty protection, pricing protection, and return protection
• Use ATMs frequently
• Want to be able to call customer service 24/7

You may not like banking with TIAA if you:

• Aren’t comfortable banking digitally, AND don’t live near a branch in Florida
• Don’t have enough money for its opening deposits
• Care about finding the highest APY possible on savings or money market accounts
• Are turned off by rates decreasing after the first year on your checking and money market accounts
• Value a live online chat feature

The TIAA Basic Savings Account is a decent savings tool. You can open an account with a $25 deposit. There’s a $5 monthly fee, but TIAA waives this charge if you maintain a $25 balance.

You’ll earn 0.65% APY on your savings balance. While this is significantly higher than the average savings rate of 0.06%, you can still find better rates with other online banks’ high-yield savings accounts.

See Business Insider’s picks for the best high-yield savings accounts »

The TIAA Yield Pledge Checking Account is a worthwhile option if you want to earn interest on your checking account balance — not all banks pay interest on checking accounts.

TIAA pays a relatively high rate for the first year. The rate will go down after a year, but it’s still decent. It’s a tiered system, so the higher your balance, the higher APY you’ll earn after that first year.

There are no monthly fees, and TIAA reimburses out-of-network ATM fees. You’ll receive unlimited refunds if your balance is at least $5,000, and $15 per month in refunds for lower balances.

TIAA’s debit card also comes with some unique benefits: extended warranty protection, price protection, and return protection.

Extended warranty protection could add up to an extra year warranty to an eligible product you buy with the card. With price protection, TIAA reimburses up to $250 if you buy something, then find the same item for cheaper within 60 days. With return protection, TIAA refunds up to $250 if you want to return an item within 90 days of buying it, but the merchant won’t accept returns.

See Business Insider’s picks for the best checking accounts »

TIAA offers fixed-rate CDs with terms ranging from three months to five years. It pays some of the highest rates you’ll find in the market right now, especially for its longer terms.

The sore spots for a TIAA Yield Pledge CD are the minimum deposit and early withdrawal penalties. You’ll need at least $5,000 to open a CD, and its penalty for withdrawing funds before the CD matures can be harsh, particularly for longer-term CDs.

But if you have $5,000 to open an account and feel confident you won’t need to withdraw money early, then TIAA could be a good fit.

TIAA also offers a couple other types of CDs. A Bump Rate CD allows you to increase your rate once over a 3.5-year term if TIAA’s rates are going up. Its CDARS^® CDs’ rates aren’t as high, but they insure up to millions of dollars; most bank accounts are only insured for up to $250,000.

See Business Insider’s picks for the best CD rates »

The TIAA Yield Pledge Money Market Account is a pretty strong account. You’ll receive a debit card and paper checks, which make it easy to access your money. You’ll receive unlimited out-of-network ATM reimbursements if your balance is at least $5,000, and $15 per month in refunds for lower balances.

TIAA also doesn’t charge any monthly fees. The mandatory $500 opening deposit is lower than what many competitors require, but you can still find lower deposit requirements at some other online banks.

The weak point is the APY. TIAA pays a decent rate, especially for the first year, but it just isn’t quite as competitive as some other institutions’ rates. But the low fees could make up for what you’d lose with a slightly lower APY, especially if you use ATMs frequently.

See Business Insider’s picks for the best money market accounts »

TIAA Bank is an online bank, but it does have 11 physical branch locations in Florida. You can use your debit card for free at 80,000 Allpoint and MoneyPasss ATMs around the United States.

You’ll receive unlimited out-of-network ATM fee reimbursements if you have at least $5,000 in the respective account. If your balance is under $15,000, you’ll still receive up to $15 per month in out-of-network ATM refunds.

The TIAA mobile app has received 4.6 out of 5 stars in the Apple store and 4.4 stars in the Google Play store.

You can call a live representative 24/7 or email customer service, but there’s no live online chat feature.

Most TIAA accounts are FDIC insured for up to $250,000, or $500,000 if you have a joint account. If you have a CDARS CD, then your account is insured for millions.

TIAA is an online bank, but it also has a few physical branches. We’re comparing it to two other online operations, Capital One 360 and HSBC Direct, which also have some brick-and-mortar locations for people who want to bank in person.

TIAA Bank review vs. Capital One 360

TIAA Bank and Capital One 360 both have savings accounts, checking accounts, and CDs. If you want a type of CD other than the typical fixed-rate account, then you’ll probably prefer TIAA. You’ll also want to go with TIAA if you’re interested in a money market account, because Capital One 360 doesn’t offer one.

You might like Capital One 360 if you don’t have much money to get started. The bank doesn’t require an opening deposit for any of its accounts, and it doesn’t charge monthly fees. However, Capital One 360 doesn’t reimburse any out-of-network ATM fees.

If you want to be able to walk into a physical branch, your choice may come down to which bank has a location closest to you. Floridians might have a TIAA Bank nearby, but that’s all. Capital One has branches along the East Coast, and in Texas and Louisiana.

See Business Insider’s complete review of Capital One 360 »

TIAA Bank review vs. HSBC Direct

TIAA Bank and HSBC Direct both have savings and checking accounts, and CDs. Unlike HSBC, TIAA has a money market account.

TIAA offers more CD term options than HSBC Direct, and its rates are better. However, HSBC Direct’s opening deposit for CDs is only $1,000, compared to TIAA’s mandatory $5,000 — so HSBC Direct could be the better choice if you don’t have a ton of money right off the bat.

Unlike TIAA, HSBC doesn’t reimburse any out-of-network ATM fees.

If you want access to a physical branch, you may just choose the bank with the closest location. Like TIAA, HSBC has branches in Florida. It also has branches along the East Coast, and in California and Washington.

See Business Insider’s review of HSBC Direct Savings »