TIAA Bank Yield Pledge® Money Market Has 1 Year Rate Guarantee
At the end of March, TIAA Bank’s Yield Pledge® Money Market had a very competitive MMA rate with a 1-year rate guarantee. Unfortunately, in April the rate fell from 1.75% APY to 1.40% APY. I decided a review would still be worthwhile since this 1.40% APY may become more competitive as rates continue to fall.
| APY | MIN | MAX | INSTITUTION | PRODUCT | DETAILS |
|---|---|---|---|---|---|
| 3.55*% | $100k | $10m | TIAA Bank | Yield Pledge Money Market | |
| OTHER TIERS: 1.70% → Up to $10k | 2.45% → $10k - $25k | 2.80% → $25k - $50k | 3.20% → $50k - $100k | |||||
The one-year rate guarantee is for first-time Yield Pledge® Money Market account holders. Following the one-year rate guarantee, the Yield Pledge® Money Market will revert to the ongoing five tiered rates, currently ranging from 0.90% APY to 1.35% APY.
The last time I wrote about the Yield Pledge® Money Market was in the fall of 2017, when it was a part of EverBank’s product line (just prior to TIAA Direct’s acquisition of EverBank). A version of this offer has long been available at TIAA Bank/EverBank. My first review of this promo was in 2006. While the APY offered on the Yield Pledge® Money Market has rarely been a rate leader, the one-year introductory APY is appealing, especially in a falling rate environment. In the past, the rate guarantee period has been shorter.
”Yield Pledge®” is not just a branding tool. According to the Yield Pledge® Money Market page,
We promise that the yield on your Yield Pledge® Checking and/or Money Market Account will stay in the Top 5% of Competitive Accounts based on the Bankrate Monitor National Index survey data from the last week of each month.
The Simple Account Summary discusses the basic features of the Yield Pledge® Money Market, which include,
- No monthly service fee.
- Interest accrues on the average daily balance.
- All U.S. ATM fees will be reimbursed during any month the average daily balance is at least $5k. For balances under $5k, AMT fees will be reimbursed up to $15 per month.
- There is no fee to close a Yield Pledge® Money Market account.
- Check-writing is available, along with a free debit card.
- There is a $10 excess transaction fee for each transaction (ACH, debit card, checks, etc.) beyond the six allowed per month.
- Incoming wires (both domestic and international) are free, with outgoing domestic wires (US dollars) incurring a $25 fee.
It should be noted that the Yield Pledge® Money Market does offer check writing. The MMAs at many online banks are more like savings accounts since there is no check writing.
Availability
Headquartered in Jacksonville, Florida, TIAA Bank debuted in June 2018, a year after TIAA acquired EverBank, a well-known pioneer in digital banking. Immediately following the 2017 acquisition, TIAA Direct and EverBank operated as separate brands with separate products, with a rebrand in the Bank’s near future. While the Bank is clearly known as “TIAA,” EverBank’s legacy continues in “Yield Pledge®” attached to several products.
Opening a Yield Pledge® Money Market must be done online. Funding can be done by and online or wire transfer from an outside bank or by mailing a check. While current TIAA Bank customers can also utilize the Bank’s mobile deposit app, funds from an existing TIAA Bank Yield Pledge® Checking Yield Pledge® Account or an existing TIAA Bank Yield Pledge® Money Market Account are not eligible for the 1-year introductory APY.
Bank Overview
TIAA Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 4.30% (excellent) based on December 31, 2019 data. In the past year, TIAA Bank has increased its total non-brokered deposits by $3.22 billion, an excellent annual growth rate of 15.18%. Please refer to our financial overview of TIAA Bank (FDIC Certificate # 34775) for more details.
The original Teachers Insurance and Annuity Association (TIAA) was founded in 1918 by the Carnegie Foundation, establishing a fully-funded system of pensions for college professors. In June 2017, TIAA Direct acquired EverBank, eventually becoming TIAA Bank and offering a significantly expanded product line and services. TIAA Bank is currently the 49th largest bank in the country, with assets of nearly $42 billion and more than 833,000 customer accounts.
How the Yield Pledge® Money Market Compares
When compared to the Money Market accounts tracked by DepositAccounts.com that are available nationwide and require a minimum balance of $1k of less, TIAA Bank’s Yield Pledge® Money Market APY ranks fifth,* but the year-long rate guarantee may prove to be invaluable.
The above rates are accurate as of 4/8/2020.
To search for the best MMA rates, both nationwide and state specific, please refer to our Money Market Accounts Rates Table page.
We are continuing to keep our rates up-to-date, but are just too many rate cuts for us to process the changes quickly. For the time being, please be aware that the rates listed at DepositAccounts may not reflect the latest rates published by the banks and credit unions.
I can answer that question. The reason CSRs lack knowledge about FDIC/NCUA coverage is that FIs have no incentive to train them in this topic since the burden of loss on uninsured deposits is on the depositor not the FI. It's not up to the FI to ensure your deposits are insured it's up to you. They don't care because the insurance will only pay off in the event that the FI fails. And after the FI fails, what do they care what happens to your money?
The place to apply pressure here is on CONGRESS. They need to rewrite the laws so that depositors are not faced with the impossible task of trying to decipher the convoluted insurance rules in order to know whether they are insured or not. Either the FIs should not accept funds at all unless the deposits meet insurance limits so that if they take your funds you are guaranteed coverage, or, at the very least, the FIs should be required to inform you that some or all of your deposits are not insured before opening your account so you can decide what to do. This would shift the burden of monitoring the insurance from the depositor to the FI and eliminate this rediculous situation of Russian roulette that depositors are forced to play.
You can insure much more than that. Theoretically you can insure an unlimited amount.
But the problem is that in some situations it is very difficult to determine if you are insured. The insurance calculators are only as good as the information you put into them. If you don't use them right, you can get incorrect results.
The bottom line is that the burden of determining if you are insured should not be on the depositor, it should be on the FI. No calculator should be needed. The way the system is set up now it gives many depositors a false sense of security. (I am not talking about your specific case #3, as from what I have read of your post about these deposits it sounds to me like you have met the coverage requirements.)