The latest addition to the "direct" online bank accounts comes from TIAA-CREF. TIAA Direct offers high yield savings accounts, interest checking, CDs, and money market accounts. With a competitive savings account rate of 1.25% APY, it looks like TIAA Direct is looking to snatch assets from competitors in the online banking world.
The account features are similar to most other high yield savings accounts. If you're a techie, you might appreciate the ability to make remote deposits from your iPhone. But the main attraction is the interest rate.
Will TIAA Direct continue to offer a rate that's higher than everybody else? As Flexo notes at Consumerism Commentary, new banks often start with high rates to get assets in the door but then become complacent. If you need a new account anyway, TIAA Direct is probably a fine choice -- but transferring assets just for the higher rate may leave you disappointed in a year or two.
Further reading:
- What's a Rate Chaser?
- Alternatives to Private Student Loans
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