An account can arrive after a job ends
A former employee may first encounter Principal Bank when a small retirement-plan balance moves into an automatic rollover IRA. The employer has an agreement with the bank, and the savings move after the employee has received options and has not made an election by the deadline. The money goes into an interest-bearing deposit account. This is an important route into the franchise: the bank can become the custodian of retirement cash before the saver has actively chosen a new long-term investment. The account preserves a retirement connection, but its fees and eventual destination still matter to the customer. [1]
An early online bank changed direction
Principal’s corporate history places the launch of its internet-based bank in 1998, during a period when the financial group was extending its retirement and investment operations. Its original online-bank story belongs to that late-1990s expansion, rather than to the insurance business’s much older origins. The FDIC now identifies Principal Bank as an active federal savings bank in Des Moines, Iowa, established February 12, 1998, with certificate 34507 and OCC charter 714225. That legal identity is the subject of the financial comparisons below. [2][3]
The 2013 retreat from general banking
A concrete step in the bank’s transformation came in September 2013. BofI Federal Bank, now known as Axos Bank, reported completing the purchase of about $173 million of Principal Bank deposits in September 2013. Those balances included checking, savings, money-market and time-deposit accounts. Principal’s 2013 annual report described the bank’s transformation into a limited-purpose trust institution. It also reported that the Federal Reserve approved the parent’s deregistration as a savings-and-loan holding company on December 31, 2013. The business narrowed; the insured bank did not disappear. [4][5]
A bank with deliberately limited powers
Principal Financial Group’s 2025 annual report explains the resulting boundaries. Principal Bank may accept deposits held in a fiduciary capacity, but may not hold demand deposits, own commercial loans or originate loans. It purchases securities and residential mortgages instead. The report counted nearly 816,000 bank customers at year-end 2025 and described distribution largely through people leaving retirement plans serviced by affiliates. This is therefore a specialized savings and custody operation within a larger financial group. Consolidated insurance earnings, investment assets and the bank’s own deposits measure different businesses. [6]
What savers actually hold
The bank’s current product page describes savings accounts, money-market accounts and certificates of deposit inside traditional or Roth IRAs. An IRA is the retirement account structure; the underlying bank product is what pays interest and carries applicable deposit insurance. Principal’s disclosure separately states that annuities, insurance, mutual funds and other securities are not deposits or obligations of Principal Bank and are not FDIC-insured. A familiar group logo therefore does not make every retirement product equivalent. The customer’s actual account and product determine which protections and risks apply. [7]
The June balance sheet
At June 30, 2026, Principal Bank reported $9.84 billion of assets, $9.26 billion of deposits and $2.99 billion of net loans, compared with $8.96 billion, $8.38 billion and $2.63 billion a year earlier. Securities were $6.21 billion, about 63.1% of assets. First-half net income rose to $80.8 million from $46.7 million. The FDIC’s noncurrent-loan ratio was 0.44%, versus 0.43%; loans in this measure are at least 90 days past due or no longer accruing interest. Equity was $493.9 million, versus $435.4 million. These are bank-only amounts; net income covers January through June in each year. [8]
Custody is a second connection to clients
Principal Custody Solutions is a service name used for custody and trust work provided by Principal Bank and/or Principal Trust Company. The latter is the trade name of Delaware Charter Guarantee & Trust Company, a separate non-deposit trust company. The service disclosures distinguish holding and administering assets from making investment-management decisions. That distinction explains why an institutional custody relationship can be important without placing the full value of a client’s securities on the bank’s balance sheet. Client assets under administration cannot simply be added to insured-bank assets. [9]
A July expansion built on that specialty
On July 8, 2026, Principal announced an expanded custody referral program for regional and community banks. The offering included referral relationships and support for banks transferring custody operations. Principal said its custody business did not offer commercial lending or treasury-management services, positioning it as a complementary provider to those referring banks. The announcement described more than $1.2 trillion of assets safeguarded across the custody service, not $1.2 trillion belonging to Principal Bank. It established a service expansion after the June reporting date; it did not quantify how much new bank revenue the expansion would produce. [10]
The limits of a conservative-looking model
The securities-heavy asset mix means interest-rate movements and the timing of cash flows matter alongside borrower defaults. A low noncurrent-loan ratio does not capture changes in securities values or the cost of retaining deposits. For customers, the automatic-rollover page lists a $15 annual fee, waived for balances of $10,000 and above, and a $30 closing fee waived for transfers to another Principal product. Those charges illustrate why capital preservation and the saver’s net return are different questions. The available records do not separate the bank’s earnings by IRA deposits, purchased mortgages and institutional custody. [8][1]
Sources
- Principal Bank: automatic rollover IRA process and fees; checked October 6, 2026SourceBack to text: ↑1↑2
- Principal: corporate history, bank launch in 1998; checked October 6, 2026SourceBack to text: ↑
- FDIC institution directory: certificate 34507, retrieved October 6, 2026Official sourceBack to text: ↑
- BofI Federal Bank: completed Principal deposit acquisition, September 9, 2013Filing / reportBack to text: ↑
- Principal Financial Group: 2013 annual report, bank transformation and regulatory statusFiling / reportBack to text: ↑
- Principal Financial Group: 2025 Form 10-K, filed February 18, 2026Filing / reportBack to text: ↑
- Principal Bank: current deposit products and insurance disclosures; checked October 6, 2026SourceBack to text: ↑
- FDIC bank-only reports: certificate 34507, June 30, 2026 and June 30, 2025; dollar fields in thousandsOfficial sourceBack to text: ↑1↑2
- Principal: custody service providers and legal identities; checked October 6, 2026SourceBack to text: ↑
- Principal: expansion of custody bank-referral program, July 8, 2026SourceBack to text: ↑