Dedicated to Deposits: Deals, Data, and Discussion

CIT Bank Launches Internet CDs with Unique Features & Top Rates

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CIT Bank has launched an internet bank that offers certificates of deposit. The CDs have competitive rates with some unique features. CIT Bank is one of the businesses that make up CIT Group Inc., a bank holding company best known for providing commercial financing and other services to small and middle market businesses. Don't confuse it with Citigroup Inc. which is the bank holding company of Citibank. CIT Group had some difficulties in 2009, and it's still not in the best shape. However, the FDIC-insured CIT Bank is financially strong. That's the most important factor for depositors.

CIT Bank is currently only offering internet CDs with terms from 6 months to 3 years.

The best deal is the bank's 1-year Achiever CD. What makes this such a good deal is that it allows you to make one additional deposit during the term. This can be useful if you have a CD that's going to mature in the next few months. You can lock in the 1-year CD rate now, and you don't have to worry about lower rates a few months from now. When your other CD matures, you can make the add-on deposit into this 1-year Achiever CD with the original interest rate.

The other nice feature is a rate bump. If rates go up, you can take advantage of the higher rate.

The most important feature of the 1-year Achiever CD is the interest rate, and it's quite competitive as compared to other internet banks. It has a 1.15% APY with a minimum deposit of $25,000 (as of 10/17/2011). That may sound low, but it's about the same as the best nationally available 1-year CDs from banks. When you consider those other banks don't have the add-on and bump-up features, the CIT Bank's Achiever CD has a clear advantage.

CIT Bank's other internet CDs are more typical with the standard CD features. CIT Bank's Term CDs have maturity periods from 6 months to 3 years. Minimum deposit is $1,000. CIT Bank's Jumbo CDs have terms of 1 and 2 years with a minimum deposit of $100,000.

Some of the important features of the CDs are described in CIT Bank's FAQ page. Here are a few of the important ones:

  • Early withdrawal penalty is 3 months interest for CD terms 1 year and less, 6 months interest for CD terms greater than 1 year
  • Grace period when the CD can be withdrawn without penalty is 10 days starting with the maturity date
  • Posted interest on the CD can be withdrawn at any time
  • Interest is compounded daily, and credited it to your account monthly

Application Process

You can apply for CIT Bank CDs with an online application. It's available for people in any state. Funding is done with an electronic funds transfer from an outside bank account. As is typical with setting up an ACH transfer, you provide CIT Bank with the routing and account number of your outside account. You also have the option to mail in a check.

CIT Bank Financial Overview

Even though it has just started taking deposits online, CIT Bank has been around for a while. CIT Bank has been a FDIC member since 2000. It's a sizable bank with almost $7 billion in assets and over $4 billion in deposits. The bank's overall health score at DepositAccounts.com is 5 stars (out of 5) with a Texas Ratio of 0.87% (excellent) based on June 2011 data. Bankrate also shows a strong bank with a 4-star rating based on March 2011 data. Please refer to our financial overview of CIT Bank for more details.


  Tags: CIT Bank, CD rates

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Comments
Comment #1 by Anonymous posted on
Anonymous
I tried applying, but wasn't able to get to the application page at first (I got the message that the page couldn't be found).  When I tried again and finally got to the application, I was quickly timed out.  Maybe I'll try later.  Maybe not.

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Comment #2 by Anonymous #1 (anonymous) posted on
Anonymous #1
I tried again and it worked.

2
Comment #6 by Wil posted on
Wil
Saying that "CIT Group had some difficulties in 2009" is putting rather mildly. It defaulted on its bonds and was reorganized in bankruptcy! At least the reorganization was orderly, and didn't involve a gov't bailout. Full disclosure: I am a CIT Group bondholder (still stuck with reissued bonds maturing 3-5 yrs. from now that replaced a [defaulted] bond that was scheduled to mature in Jan. 2011).

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Comment #7 by Anonymous posted on
Anonymous
Wil #6 - curious to know what interest rate you had on the defaulted bond, what rate you have on the reissued bond and whether or not the reissued bond was in the same amount as the defaulted bond. TIA and hope it all turns out well for you. 

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Comment #8 by Anonymous posted on
Anonymous
But no checking account option makes it more of a hassle to move funds when the CD matures

5
Comment #10 by Wil posted on
Wil
Anonymous #6: The defaulted bond was at 6.5%, and was investment grade (A) when issued. The reissued bonds (split into five bonds with different maturities, two were called, three remain) were previously at 8% (actually, the bondholders did pretty well in the reorganization, we got about 90 cents on the dollar), but earlier this year they were replaced again, with the same maturities, at 7%. I can't really complain about the treatment of the bondholders (compare, for example, how the GM and Chrysler bondholders got shafted), it is just that I deliberately chose the bond with a maturity that was short term. I guess I should just be grateful that it didn't turn out worse and count my blessings. Still, I'm now "gun shy" with ANYTHING even remotely connected to CIT Group.

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Comment #11 by Anonymous posted on
Anonymous
Great to know, thanks for the info!

2
Comment #12 by Sylvia (anonymous) posted on
Sylvia
Earlier this week, I opened a 2-year CD in the amount of $85K.  Today, I learned CIT Bank took the amount out twice by ACH from designated account at another financial institution.  No reassurance as to how they're acting with urgency to return funds to my other account.

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Comment #13 by Anonymous posted on
Anonymous
The savings rates look very competetive. But checking the FDIC website I see CIT Bank online is not active as an insured member? Whilst the CITbank group is active with membership number 35575. I spoke to a member of the bank staff who said it was covered by the same member number. Further this bank and FDIC number are registered in Salt Lake city but there is no office or premises there? I guess this is the staandard of financial regulation that makes America great and Republicans want less regulation. 

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Comment #14 by Anonymous posted on
Anonymous
Was thinking of depositing an online bank account with CIT but after researching here I will look elsewhere.

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Comment #15 by Anonymous posted on
Anonymous
The savings app appears to me to be exactly the same as the Incredible Bank Money Market app... ie exact same page for security questions... Is this a coincidence or are they related?Are there any bonuses for opening either of these accounts? thx

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Comment #16 by Anonymous posted on
Anonymous
Does CIT require trial deposit verifcation for the external funding account? Are the deposits removed?

1
Comment #17 by Anonymous posted on
Anonymous
I don't like a bank located in "nowhere" in Utah. The comments are warnngs worrisome enough to drive me into a bank located somewhere

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