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)
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.
|1.30*%||-||$100k||CIT Bank||Premier High Yield Savings|
|OTHER TIERS: 1.25% → $100k+|
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
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.
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.
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.