CIT Bank Debuts New Savings Account with Bonus and New No-Penalty CD

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Deal Summary: Premier High Yield Savings Account (1.30% APY up to $100k, 1.25% APY for $100k+) Savings Account bonus of $100 with a $15k balance. No-Penalty 11-month CD (1.25% APY, $1k minimum)

Availability: Nationwide (internet bank)

Competition among internet banks is driving up rates. The latest example is CIT Bank, which just began offering the Premier High Yield Savings Account with rates up to 1.30% APY. This new account has two balance tiers: Tier 1 earns 1.30% APY for balances up to $100k and Tier 2 earns 1.25% APY for balances over $100k. For example, if your balance is $100,001, you would receive a 1.25% APY on the entire balance of $100,001. If your balance is exactly $100,000, you would receive 1.30% APY on your entire balance.

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.30*%-$100kCIT BankPremier High Yield Savings
OTHER TIERS: 1.25% $100k+
Accounts mentioned in this post. Rates as of August 17, 2017.

This is the second new savings account that CIT Bank has launched this year. The last one was the Spring Savings Account that was launched in May with a 1.15% APY. Existing CIT Bank savings account customers will need to apply for this new account to receive the higher interest rate. This can be expedited by first logging into CIT Bank online banking before opening the new account.

You have to wonder how many existing savings account customers won’t take the time to open the new account. I wouldn’t be surprised if it’s a significant number, and that may be one reason CIT Bank has chosen to create new accounts with higher interest rates. Customers too busy to stay on top of new accounts will lose out on the higher rates. At least CIT Bank is allowing existing customers to open the new Premier High Yield Savings Account with money from existing CIT Bank accounts. That hasn’t always been the case with other internet banks that have created new accounts.

$100 Cash Bonus

CIT Bank is again offering a bonus for opening its new savings account and maintaining a sufficient balance. The bonus isn’t as large as previous ones, but it’s still a good deal. To apply and to review the full details, please refer to this CIT Bank page. Below is a summary of the bonus and its requirements:

  • Account must be opened with Promotional Code "PREMIER" by September 8, 2017
  • Account must be funded within 30 days of account opening
  • Funds used to qualify for bonus must be new funds, not already or recently on deposit with CIT Bank or OneWest Bank
  • Must maintain a minimum $15,000 monthly balance for the first 3 full monthly statement cycles.
  • Limit one Premier High Yield Savings account bonus offer per customer. If multiple accounts are opened by a customer, only one account will be eligible for the bonus.
  • Customers who received a CIT Bank bonus payment or enrolled in another CIT Bank bonus offer between January 1, 2017 and July 14, 2017 (regardless of whether the bonus has yet been paid) are not eligible for this Premier High Yield Savings account bonus offer.

Premier High Yield Savings Account Overview

The new Premier High Yield Savings Account has the same features as CIT Bank’s previous savings accounts. Minimum opening deposit is $100. After the account is opened, there is no minimum balance. Also, there is no monthly maintenance fee.

CIT Bank has a history of maintaining competitive savings account rates. From the time CIT Bank first launched the High Yield Savings Account in April 2012, the APY has ranged from 0.80% to 1.05%. The last rate increase was in January of this year when the APY increased from 0.95% to 1.05%. In May, the Spring Savings Account was introduced with a 1.15% APY.

I received new information today on CIT Bank’s ACH electronic funds transfer system that allows money to be moved to and from accounts at external institutions fee-free. Once the account is opened, you can set up multiple links to external accounts. According to a CSR, up to 10 links are allowed. Regarding the dollar amount that can be transferred, I was told they allow outgoing ACH transfers to be up to $2 million per day, and there’s no limit for incoming ACH transfers. The number of ACH withdrawals are limited to six per statement cycle, as required by federal regulation.

Another option to transfer funds is a wire transfer. CIT Bank offers free outgoing wire transfers for accounts with balances of at least $25k. The fee for outgoing wire transfers for accounts with balances under $25k is $10 per wire transfer. There’s no fee for receiving wire transfers.

New No-Penalty CD

APYMINMAXINSTITUTIONPRODUCTDETAILS
1.25%$1k-CIT Bank11 Month No Penalty CD
Accounts mentioned in this post. Rates as of August 17, 2017.

CIT Bank has also introduced a new CD that looks very similar to what Ally Bank offers. CIT Bank’s new CD is called the No-Penalty CD, and it has an 11-month term. The current APY is 1.25%, with a $1,000 minimum deposit. Below is how CIT Bank describes its No-Penalty CD:

You may withdraw the total balance and interest earned, without penalty, beginning seven days after funds have been received for your CD. No withdrawals are permitted during the first six days following the receipt of funds.

CIT Bank's No-Penalty CD rate currently matches Ally’s No Penalty CD rate for balances of $5k to under $25k. It’s nice to see a new No Penalty CD, and the competition should encourage both banks to keep the rates competitive. In a rising interest rate environment, this isn’t really an attractive CD unless the rate is higher than the best savings account rate.

No More New IRA Accounts

Another change at CIT Bank is that customers can no longer open new IRA accounts. In the past, CDs and the savings account could be opened inside an IRA. It would be interesting to know what motivated CIT Bank to stop offering IRAs. Banks may be having a difficult time competing with brokerage firms with IRAs since most of the financial industry pushes the idea of holding mutual funds inside IRAs. Those who prefer the safety of CDs may still choose a brokerage firm where they can buy brokered CDs for their IRAs. As Charles Rechlin described in this DA article, brokered CDs do have advantages over direct CDs for IRAs.

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 or resident aliens, 18 years or older.

Applying for a Savings Account or CD can be done using CIT Bank’s online application. Funding can be 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. Other options include mailing a check or performing a wire transfer.

Bank Overview

In 2015, CIT Bank merged with OneWest Bank. The resulting institution is a national bank (National Association) and was re-named CIT Bank, N.A. The OneWest Bank brand remains intact, but now operates as a division of CIT Bank, N.A. Deposits at CIT Bank and OneWest will be counted together for purposes of determining FDIC insurance coverage limits. As of March 31, 2017, the Bank now has combined assets of more than $42 billion and deposits of more than $32 billion.

The new bank (CIT Bank, N.A.) took the financial history and FDIC Certificate number of OneWest Bank (FDIC Certificate # 58978). Based on March 31, 2017 data, CIT Bank, N.A. has an overall health grade at DepositAccounts.com of “A”, with a Texas Ratio of 9.39% (excellent) and is currently financially strong. Please refer to our financial overview of CIT Bank for more details.

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 CIT Bank Premier High Yield Savings Account Compares

When compared to the 256 Savings Accounts tracked by DepositAccounts.com that are available nationally with similar balance requirements, CIT Bank’s Premier High Yield Savings APY is tied with DollarSavingsDirect, BankPurely and ableBanking in second place.

The above rates are accurate as of 7/7/2017.

To review the top Savings Account rates, both nationwide and state specific, please refer to our Savings Account rates table or our new Rates Map page.

Related Pages: savings accounts, 1-year CD rates, nationwide deals, Internet banks

Comments
unmesh
unmesh   |     |   Comment #1
I opened their Spring Savings Account while logged in when that was the way to get a higher rate than it's predecessor and the system would not let me open a joint account. We had to call them and go through the "twenty questions to prove you are who you say you are" routine for them to convert it to a joint account
slovokia
slovokia   |     |   Comment #2
CIT's rate structure for the Premier High Yield Savings Account is weird. Someone with more than $100K to invest could simple open multiple accounts and keep each account balance below $100K - presto 1.30% on all your money instead of 1.25%. Does CIT intend to prevent this behavior or are they doing an experiment to see who will go to the trouble of doing this? Given the issues with their computer systems (i.e. all the bugs), the complexity and intensiveness of their deposit raising strategy probably defeats any economies they derive from this approach. They probably service many more customer service inquiries per account holder than the internet banks that simply give all their depositors a good deposit rate without all the razzmatazz. 
poor IT
poor IT   |     |   Comment #3
The bugs and their usual multi-day delay for their backlogged backoffice staff to process requests (eg CD closings aren't same-day, even if you specify instructions prior to maturity) are additional reasons I wouldn't consider CIT's no-penalty CD (besides the worse rate).
Bogie
Bogie   |     |   Comment #4
No excuse for not cashing out a CD right on it's maturity. Even back before the computer age, I could walk into any of our local banks which I had CDs with and any bank teller would immediately cash them out for me when I wanted the cash.
poor IT
poor IT   |     |   Comment #5
I agree, and I think it'd not be permitted by the account agreements at most banks but CIT's legal docs are very incomplete and minimal about handling of accounts & transactions.
me1004
me1004   |     |   Comment #6
If they aren't cashing out CDs on the day you say to do so with advance notification, then everyone suffering that should file a complaint with the pertinent bank regulator agency. That is not slowness, that is intentionally taking a free float, interest free, and contrary to you agreeing to it and your advance instructions. If it is going to take them more than a day to process, they they should start before the date you told them to close it. But there is no excuse to take more than a day anyway. That is just plain theft and intentional!

When they delay like that, on any one account, it isn't a big deal of bucks, but when they do it to everyone, that is big bucks to them, and that;s why they do it. The issue isn't one of a slow operation, it is one of a crooked operation.

I know the bank regulator won't do anything due to an individual complaint, will simply shuffle paper in a manner that will make you think CIT is the regulator, but again, everyone should file a complaint, and when the regulator gets a lot of them, that can make all the difference. The only alternate would be a class action, but that would be a lot more difficult to arrange.
buckeye61
buckeye61   |     |   Comment #7
Well said! I agree with everything you said, but it raises questions about the wisdom of doing business with them at all. Yes, the new savings account has a very competitive yield, and the new account bonus is an attractive feature, but their CD rates are NOT as competitive as the new Savings account in terms of rates. Too many red flags with this bank IMO.
slovokia
slovokia   |     |   Comment #10
I checked with CIT Bank customer support - customers are allowed to open multiple premium high yield savings accounts. If you keep each account balance below $100K each account will earn interest at the rate of 1.30%.
chasinrates
chasinrates   |     |   Comment #8
Yes, it is a pain that we have to open the new account to get the higher rate. But I suppose it's better than being an existing customer and having a bank offer a higher rate to new customers ONLY.
Continuing to "play the game" to the best of my ability is all I can do. Note to anyone from CIT Bank who sees this: When I saw the 1.30% rate I was going to add funds to my account until I figured out what the game was. Now I've decided just to roll funds already with your bank to the "new & improved" account. New funds will be going to a bank that only pays 1.25% but doesn't play games.
RJM
RJM   |     |   Comment #9
I'm thinking about opening an account here for the bonus primarily. $100 bonus is more than the .2% interest difference which I compute to be $7.50 compared to the 1.5% no penalty at Ally. (Notwithstanding the $25k minimum at ally)

But, the rate is also higher than any other savings I have right now. Ally is just 1.15% and discover 1.1%. I have not chased any of the other new leaders as of yet.
TheGman
TheGman   |     |   Comment #11
My rate is 1.05%. I've been a customer with CIT for a few years. I have over $100K in my account, and am not getting the 1.30% (plus the $100 for new customers, and am not happy about it. Time to switch.
chasinrates
chasinrates   |     |   Comment #12
You won't be able to get the $100 bonus, but you should be able to get the 1.3% rate if you open a new account and then move funds from your existing account to the new account (and then close your existing account). Yup, it's a pain, but at least you do it. There are some banks that don't let existing customers qualify for the new accounts with the higher rates.
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