CIT Bank 11-Month No-Penalty CD A Near Rate Leader

As you were reading yesterday’s CD Rate Summary, you may have noticed CIT Bank’s 11-month No-Penalty CD (1.70% APY) near the top of the nationally available, under-one-year CD category. The 11-Month No-Penalty CD requires a minimum deposit of $1k, with no stated balance cap.

CIT Bank’s 12-month Term CD currently offers a competitive 1.86% APY, one of the highest rates offered by an internet bank on 12-month CDs. The 18-month Term CD rate is just a tad lower at 1.85% APY. The minimum opening deposit for the Term CDs is also $1k.

Funding a No-Penalty CD or a Term CD can be done by check or wire transfer but,

The easiest way to fund your account is to transfer funds electronically from your other bank accounts to CIT Bank. Our application process will walk you through this in a few simple steps (all you need is the information on a bank check from the institution holding your account). Funds may take up to two business days to be deposited to your account.

UPDATE 3/25/2020: In a conversation this afternoon, CSR stated you have ten days in which to fund an account, and the rate is locked during those ten days.

The no-penalty feature allows the customer to withdraw the total balance and interest earned without penalty beginning seven days or later after funds have been received. Partial withdrawals of principal are not permitted.

An important consideration for any No-Penalty CD is the procedure for closure and how long it takes to close a CD. As stated in CIT Bank’s FAQs:

I have a No-Penalty CD. How do I access my funds?

You can make a request to access the total balance and interest earned on your No-Penalty CD as long as it is 7 days after the funds have been received. Call our Contact Center at 855-462-2652* or log in to CIT Bank or send us a secure message, and one of our Bankers will assist you.

*I’m assuming my long hold-time yesterday ("Your wait time is approximately 67 minutes") can be attributed to the COVID-19 pandemic. Logging into CIT Bank’s online banking platform is probably a more efficient way to close a No-Penalty CD.

While that is helpful information, it doesn’t address that universal question, “How soon can I get my money?” In the past, I was told it takes 1 or 2 business days to process a withdrawal request. The CSR I spoke with yesterday stated that there is essentially no waiting period, but the method used to distribute the funds would influence how long the process could take. For example, if you request a check, it will be cut within 24 hours, but once the check is mailed, CIT Bank has no control over the check. A wire transfer can be done on the same day if the wire transfer form is submitted before 10:30 am (PST). Theoretically, funds transferred to an external account through an ACH can be done within one or two days, but it might take additional 3 to 5 business days.

If the funds are transferred to your CIT Bank savings account, the transfer should be accomplished in a day. That fits quite nicely with my strategy of having both a savings account and a No-Penalty CD at the same bank. The No-Penalty CD’s rate is locked, offering the security of a regular CD. Should you need to access the money in the No-Penalty CD, you’re ideally positioned to close the No-Penalty CD and immediately transfer the funds to your savings account. It’s almost like having a savings account with a fixed rate.

Interest is compounded daily and paid monthly. In addition to having the interest added back into the CD, you can choose to deposit interest to an existing CIT Bank Savings Account. You can also set up an electronic funds transfer to be deposited into an external checking or savings account. Transferring funds by a wire transfer is also possible. According to CIT Bank’s Fee Schedule, accounts that have an average daily balance of at least $25k have fee-free outgoing wire transfers. A $10 fee per wire transfer applies to accounts with an average daily balance of less than $25k.

Savings Builder Cash Bonus Promotion

A long-time DA reader emailed me yesterday about CIT Bank’s Savings Builder cash bonus. The link I used in the February 6, 2020 blog post now leads to an expired offer and he wondered if the promotion had been pulled before its original mid-April end-date. Good news: the $150 or $300 bonus is still available through May 30, 2020. For more details, please refer to DA’s “Best Savings and Checking Account Bonus Offers” for March 2020.

Availability

Headquartered in Pasadena, California, CIT Bank is a "pure" internet bank, having no brick-and-mortar branches. Accounts can be opened by U.S. citizens and resident aliens, 18 years or older, with a valid Social Security number.

Opening a No-Penalty CD must be done using CIT Bank’s online application. Funding can be done through an electronic funds transfer from an outside bank account, wire transfer, or by mailing a check. As is typical with setting up an ACH transfer, you need to provide CIT Bank with the routing and account number of your outside account.

Bank Overview

In 2015, CIT Bank merged with OneWest Bank, resulting in a national bank that re-branded as CIT Bank, N.A. National banks are overseen by the US Department of the Treasury’s Comptroller of the Currency and are members of the Federal Reserve System.

The OneWest Bank brand remains intact, but now operates as a division of CIT Bank, N.A. Deposits at CIT Bank and OneWest are counted together for purposes of determining FDIC insurance coverage limits.

CIT Bank/OneWest Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 7.32% (excellent), based on December 31, 2019 data. In the past year, the Bank has increased its total non-brokered deposits by $4.23 billion, an excellent annual growth rate of 14.61%. Please refer to our financial overview of CIT Bank/OneWest Bank (FDIC Certificate # 58978) for more details.

CIT Bank is currently the 45^th largest bank in the country, with combined assets in excess of $45 billion and deposits of nearly $36 billion. It’s important not to confuse CIT Bank with Citigroup Inc., which is the bank holding company of Citibank. CIT Bank is one of the businesses that makes up CIT Group Inc., a bank holding company best known for providing commercial financing and other services to small and middle market businesses.

OneWest Bank used to be IndyMac Bank. Following the FDIC brokered sale of IndyMac in March 2009, the Bank was re-branded as OneWest Bank. A portion of OneWest Bank’s growth came from the acquisitions of failed banks: in December 2009, First Federal Bank of California was acquired, followed by the acquisition of La Jolla Bank in February 2010.

How the No-Penalty CD Compares

As I have mentioned in previous blog posts, no-penalty CDs are not that common, and the longer the term, the more competitive the CD. When compared to other nationally available no-penalty CDs, CIT Bank’s 11-month No-Penalty CD APY currently shares the top spot with Marcus by Goldman Sachs’ 7-month No-Penalty CD APY.

To look for the best CD rates, both nationwide and state specific, please refer to our CD Rates Table page.

The above rates are accurate as of 3/25/2020.