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TIAA Direct Statement Shows Lower Interest Rate?

Saturday, March 17, 2012 - 1:02 PMTIAA Direct
A reader who opened the TIAA Direct account last month emailed me the following. Has anyone else had this same problem?
Here is a question for invesigation.  The APY for a high yield savings account at TIAA Savings Bank is 1.25%. The printed statement that came in the mail showed that a rate of 0.46% posted to the account. CSR cannot explain the difference and states that a number of calls have been received in the matter.

For more info on TIAA Direct, please refer to my bank review and reader comments in this blog post.
10
Ken TuminKen Tumin5,471 posts since
Nov 29, 2009
Rep Points: 125,634
1. Saturday, March 17, 2012 - 9:37 PM
Last month on 2/24/2012, I opened a money market account with TIAA CREF in the summary part of the statement started on 2/24/2012 showing my opening amount of deposit and 2/29/2012 as the closing balance date with 0 APY.

Under account activity 2/24/2012 the balance is listed as zero.

My ACH came in on 2/29/2012 and listed the closing balance of my ACH.

I would have thought I would get at least 1 day’s worth of interest, but I got zero!

 
3
smcsmc19 posts since
Dec 19, 2011
Rep Points: 39
2. Sunday, March 18, 2012 - 2:59 PM
Update- I called today 3/18/2012 and spoke to a customer service representative about this 0 apy at first she said I should not have gotten any, but I explanned there was no hold on my ach, thus I should get at least 1 day's worth of interest. She agreed afterwards and submitted a ticket.

Also, even thou the statement indicates you will be able to do remote deposit via: your computer that is not available right now- there still working it along with POD, Quckien. I told her about mint.com and easyview to add to the list. LOL.
2
smcsmc19 posts since
Dec 19, 2011
Rep Points: 39
3. Sunday, March 18, 2012 - 11:27 PM
My printed statement says "Annual Percentage Yield Earned 0.92%" but the actual interest is $0.01 (transfered a small balance shortly before interest was credited) so I won't know until the end of this month whether the interest rate is correct.

FWIW, .92% is twice .46%.
1
newjunkernewjunker1 posts since
Feb 23, 2012
Rep Points: 1
4. Monday, March 19, 2012 - 11:39 PM
Update- TIAA CREF calling me back this evening saying the reason I did not receive an interest was because of leap year?!? The interest will be credit to my account for March + February 29th.

I will see if this holds to be true.

 
1
smcsmc19 posts since
Dec 19, 2011
Rep Points: 39
5. Wednesday, March 21, 2012 - 4:39 PM
I also first deposited funds on 2/29/12 and was told the exact same thing : interest for the last day in February will be rolled up into March. Thing is, I've made several deposits since then so I have no idea how to make sure that it will actually be included.
1
RichRegRichReg6 posts since
Mar 21, 2012
Rep Points: 63
6. Wednesday, March 21, 2012 - 6:41 PM
For multiple deposits the easiest method is to calculate interest for each deposit (date), the sum equals interest earned.  Here's a basic interest calculator.  

For multiple deposits and withdrawals per period a spreadsheet that compounds daily (or average) account balances would be better suited - 

Average Daily Balance Spreadsheet or Average Daily Balance Interest Calculator
4
CraigPDCraigPD94 posts since
Jun 12, 2010
Rep Points: 336
7. Wednesday, March 21, 2012 - 10:00 PM
Great...thanks Craig!



 
1
RichRegRichReg6 posts since
Mar 21, 2012
Rep Points: 63
8. Tuesday, April 3, 2012 - 11:52 AM
Here is a question for invesigation. The APY for a high yield savings account at TIAA Savings Bank is 1.25%. The printed statement that came in the mail showed that a rate of 0.46% posted to the account. CSR cannot explain the difference and states that a number of calls have been received in the matter.

The CSR couldn't offer any explanation?  Pretty lame.  My first estatement indicates an APY of 1.11% but that calculation is based on the account opening date.  Funded on the 15th and factoring 2 additional days from opening reduces 1.25% to 1.11% (1.25 x 16/18).  I did notice interest isn't calculated from deposit posting dates.  It credits from the day after posting - a minor issue in the state of microscopic bank rates.  

I'm curious if anyone who lost interest on Feb 29 recovered it in March, leap year excuses aside.  I doubt it happens because they're using a 365 day calculation basis.

 
2
CraigPDCraigPD94 posts since
Jun 12, 2010
Rep Points: 336
9. Tuesday, April 3, 2012 - 9:03 PM
 

Update- I received a phone call this morning from TIAA Cref saying the reason I did not receive any interest in February (was deposited to the account on 2/29/12 via: ACH)  and the story is now it would not be cared over, is because “it was on hold”, 3/1/12 it would be available.

I did not agree with this, since if this was on “hold” why does it list it available balance when logging into the account. Then I let them know if that was the case, then it should have been deposited into the account 3/1/12 not 2/29/12.

Bottom line it appears depends on who you talk to you will get a different answer and they will not carrier over this 1 day of interest for me.

 If it wasn’t for having this interest rate of 1.24 I would close the account.

 
2
smcsmc19 posts since
Dec 19, 2011
Rep Points: 39
10. Saturday, April 14, 2012 - 8:09 PM
I indeed lost the interest on my initial deposit on 2/29;; a substantial deposit I might add, so I have requested an adjustment for that day.

On the same day that my account was being opened, the C.S.R. told me that I would receive interest beginning with the day that my account was initially credited. Since the effective rate will NOT be 1.24% without that day's interest, I'm inclined to believe that TIAA-Cref will honor their claim.
  
2
RichRegRichReg6 posts since
Mar 21, 2012
Rep Points: 63
11. Friday, April 20, 2012 - 12:45 PM
Hi, I had the same situation. 1 account showed 1.10% and another showed 1.42%. I called the call center and they explained that this shows the APYE. Search APYE calculator and APYE calculation to better understand it. I used this one www.meriwest.com/vcapps/aypecalc.htm If you put in the interest you received, the balance you put into the account, and the number of days the money was in the account it will show you the APYE%. This calculation is required by law. They should put the standard APY on there too with a explanation. The APYE calculation is interesting as when the bank rounds up to the penny or the number of days in the account are short it really messes with the %. I'm a professor and my finance students often struggle with this concept when we get into the banking section. Hope this helps. Ellen
4
s1times1time1 posts since
Apr 20, 2012
Rep Points: 4
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