CIT Bank’s Savings Builder Account Reaches 2.45% APY

CIT Bank is starting the new year with a bang. This morning, the Bank increased the upper tier rate of its Savings Builder Account by 20 bps to 2.45% APY. CIT Bank first debuted this account in early October. As I mentioned in my October post, this isn’t a typical savings account. To qualify for the 2.45% APY, customers must either maintain a balance of $25k+ or maintain a monthly deposit of at least $100. If these conditions are not met, the base rate is earned, which is currently 1.17% APY. Minimum opening deposit is $100, and there is no monthly maintenance fee. This rate is currently 60 bps higher than CIT Bank’s Money Market rate which has been 1.85% APY since late May.

For simplicity, DA is listing the Savings Builder Account as two accounts. The first account we just call the "Savings Builder" which we list as a standard savings account with a balance tier of $25k. This assumes the monthly deposit isn’t done. For this case, balances under $25k earn the base rate (1.17% APY) and balances of at least $25k earn the top tier rate (2.45% APY). The second account we call “Savings Builder w/ monthly deposit.” This earns 2.45% APY on all balances, and it requires the monthly deposit of at least $100.

CIT Bank details how it decides when the account qualifies for the 2.45% APY. The small print at the bottom of the page has all the details and that includes the definition of “Evaluation Day” and “Evaluation Period.” Below is an excerpt of this small print. If you want to keep things simple, just maintain a $25k+ balance. If it’s going to be difficult to always maintain a $25k balance, just set up an automatic monthly ACH deposit of $100.

"Evaluation Day" - The fourth business day prior to the end of a month. The first Evaluation Day will occur at the end of the first full month after account opening.

"Evaluation Period" - Begins the day after an Evaluation Day and ends at 4:00 pm PT on the next month's Evaluation Day. The first Evaluation Period will begin on the third business day prior to the end of the month of account opening. Additional deposits of $100 or more made between the account opening date and the start of the first Evaluation Period will not count for purposes of determining the interest rate after the Introductory Period, unless they result in an account balance of $25,000 or more.

"Introductory Period" - Begins the day of account opening and continues through the first Evaluation Day.

Introductory Interest Rate

During the Introductory Period, all new Savings Builder accounts will be paid the Upper Tier interest rate. After the Introductory Period ends, accounts will be evaluated on the first Evaluation Day to determine the interest rate to be paid for the next Evaluation Period.

Monthly Determination of Interest Rate

On each Evaluation Day the interest rate applicable for the next Evaluation Period will be determined. Accounts with an end-of-day balance of at least $25,000 on the Evaluation Day or with at least one deposit of $100 or more that posts to the account during the Evaluation Period will earn the Upper Tier interest rate during the next Evaluation Period. Accounts with an end-of-day balance less than $25,000 on an Evaluation Day without a deposit of $100 or more that posts to the account during the Evaluation Period will earn the Base Tier interest rate for the next Evaluation Period. This process will occur every month.

Thanks to DA reader, RickNP, for his Forum post about this rate increase.

CIT Bank’s Fifth Savings Account

The Savings Builder Account is CIT Bank’s fifth liquid account in its product line, and it appears to be the one that CIT Bank will now focus on and keep competitive. There were no rate increases of the other four liquid accounts, and in fact, their rates have remained the same since the new accounts were introduced.

Two of its first savings accounts, High Yield Savings and Spring Savings, are not available for new personal accounts. In 2017, CIT Bank introduced two new savings accounts. First, in May 2017 it debuted the Springs Savings Account. Then came the Premier High Yield Savings Account in July 2017. In March 2018, CIT Bank introduced a Money Market with no check writing. Each new account offered a higher rate than the existing account. Customers who had the old savings accounts were free to open the new ones, but if they didn’t, they kept earning the lower rates on the old savings accounts. To CIT Bank’s credit, the Bank lists the current rates for all of these account in its Products and Rates sheet.

Bank-to-Bank Transfers

In 2017, I received information on CIT Bank’s ACH electronic funds transfer system, which allows money to be moved to and from accounts at external institutions without a fee. Once the account is opened, you can set up multiple links to external accounts, with up to 10 links allowed. CIT Bank allows ACH transfers of up to $2 million per day. The number of ACH withdrawals are limited to six per statement cycle, as required by federal regulation.

Wire transfers are another option to transfer funds. CIT Bank offers free outgoing wire transfers for accounts with balances of at least $25k. There is a $10 fee per outgoing wire transfer fee for accounts with balances under $25k. Incoming wire transfers are fee free.

CIT Bank 11-Month No-Penalty CD

On September 12th, CIT Bank increased the rate of its 11-month No-Penalty CD to 2.05% APY, and that rate continues as of today. This CD has a minimum deposit is $1,000, with no stated balance cap. The no-penalty feature allows the customer to withdraw the total balance and interest earned without penalty seven days or later after funds have been received. Partial withdrawals of principal are not permitted.

Now that 2.45% APY is available on the Savings Builder Account, the No-Penalty CD with a 2.05% APY isn’t worthwhile. Unlike the savings account, the CD rate is locked for the 11 months. If rates do fall considerably in the next 11 months, the No-Penalty CD could end up being a better deal. However, I seriously doubt that rates will fall that much.

I have more details in my review of the 11-month No-Penalty CD.

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.

Opening an account 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 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. 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 September 30, 2018, the Bank has combined assets of $40.8 billion and deposits of $31.4 billion.

The new bank (CIT Bank, N.A.) took the financial history and FDIC Certificate number of OneWest Bank (FDIC Certificate # 58978). Based on September 30, 2018 data, CIT Bank, N.A. has an overall health grade at DepositAccounts.com of “A”, with a Texas Ratio of 10.65% (excellent) and is currently financially strong. Please refer to our financial overview of CIT Bank for more details.

Don’t 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 Savings Builder Account Compares

When compared to the 215 Savings Accounts that are nationally available, the CIT Bank Savings Builder Account ranks second.

The above rates are accurate as of 1/3/2019.

To compare the top Savings account rates, both nationwide and state specific, please refer to our Savings Account Rates Table page.