Rate Hike Milestone For A Major Online Bank - CIT Bank Platinum Savings

CIT Bank is the first major online bank to increase the APY of its online savings account, Platinum Savings, above 5% in this rate hiking cycle. Last week, CIT Bank increased the Platinum Savings rate from 4.95% to 5.05% APY. This applies to balances of at least $5k. For balances under $5k, the rate remains 0.25% APY. There’s a $100 minimum opening deposit. The minimum balance to qualify for the top rate may be an issue for some, but at least there’s no monthly maintenance fee even for a small balance.

This Platinum Savings account was launched in March of this year, and it became the savings account with the top rate at CIT Bank. The previous top account was the Savings Connect account. This is still available, but it has a lower rate (4.65% APY). On the plus side, this rate applies to all balances. Like the Platinum Savings, there’s a $100 minimum opening deposit, and there's no monthly service fees.

CIT Bank has a history of creating new accounts that have higher rates than the old accounts. At least CIT Bank makes it easy to upgrade to the new account. It just requires a phone call to request conversion to the new account. You can also open the new account online and fund the account from your existing CIT Bank account. Even though CIT Bank makes it easy to open the new accounts, customers who don’t pay attention can lose out on benefiting from the higher rates. That’s especially the case for CIT Bank’s older accounts which have much lower interest rates.

Another example of CIT Bank’s old accounts being left behind on rates is the Savings Builder account. In 2018, CIT Bank launched the Savings Builder Account with a competitive rate for balances of at least $25k or for accounts with a $100 minimum monthly deposit. In early 2019, the Savings Builder Account APY was near the rate leaders. As with all online savings accounts, the rate plummeted in 2020. Unlike most other online savings accounts, its rate remained well below the competition in the last year as the Fed has hiked rates. Its rate also remained well below the Savings Connect account rate in 2022. By the end of 2022, the Savings Connect APY was at 3.85% while the Savings Builder APY was at only 1.00%. As of today, the Savings Builder account still has a top rate of only 1.00% APY.

Money Market Account

A few months before the Savings Builder was launched in 2018, CIT Bank launched the Money Market account. That also had a very competitive rate when it launched in March 2018. In October 2018, the Savings Builder came out and became the one to offer competitive rates. Even though the Money Market rates remain uncompetitive, the account does offer a few features that aren’t available with the savings accounts, such as Bill Pay and Zelle. However, there are no debit cards or checks.

eChecking Account

Online-only banks that offer checking accounts have an advantage in my opinion. It provides more liquidity. You don’t need to wait for an ACH transfer when you move money from your online savings account to your linked checking account at another bank. You can transfer money immediately into the online bank checking account from that bank’s online savings account. In addition, you can make use of free overdraft transfers that automatically transfer money from your savings account to your checking account to cover a transaction.

That’s the primary benefit of CIT Bank’s eChecking account. The eChecking account was launched in 2019. It’s an interest checking account, but the rate has always been low (0.25% APY for balances of at least $25k, 0.10% for balances under $25k). At least it has no monthly service fees. Like the other accounts, the minimum opening balance is $100.

Another important thing to note about eChecking is that it does not offer checks. It is a checkless checking account. According to the FAQs, “all checks written payable against your eChecking will be rejected by the system.”

Instead of writing paper checks, you can use Bill Pay and Zelle. It also has a debit card that you can use for purchases and at ATMs. CIT Bank does not charge ATM fees, and it will reimburse you up to $30 per month for ATM fees charged by other banks.

Bank-to-Bank Transfers

Below are details of CIT Bank’s ACH electronic funds transfer system based on my call last year with a CIT Bank’s customer service representative (CSR). According to CSR, you can set up 10 links to external accounts. Each link must be set up using the trial deposit system. The ACH transfer limits have been reduced since I last reviewed CIT Bank several years ago. The outbound ACH transfer limit is now $250k per day and the inbound limit is $500k per day. Not much is specified in CIT Bank’s online documentation on transfer limits. In the FAQ regarding ACH transaction limitations of the savings, checking and money market accounts, CIT Bank’s answer reads as follows:

For security reasons, your ability to transfer funds using Online and Mobile Banking services may be subject to limitations on the frequency or dollar amount of permitted transfers, and CIT Bank reserves the right to modify these limits from time to time.

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. There’s an outbound wire transfer form that must be completed and delivered to CIT Bank either by fax or via Online Banking. The form and instructions are provided in the CIT Bank Form and Document page.

CIT Bank CDs

CIT Bank has a history of offering a few competitive CDs. Currently, the two most competitive ones are its 11-month No-Penalty CD (4.90% APY) and its 6-month Term CD (5.00% APY). Both have a $1k minimum deposit.

When the 11-month No-Penalty CD has a higher rate than any of the savings account rates, it can be a good deal.

It’s defined like Ally’s No Penalty CD in that after the first six days following the receipt of funds, you are allowed to withdraw all funds (total balance including interest earned) without penalty. Another plus with CIT Bank is that it’s easy to close the No-Penalty CD and use those funds to open a new one when the No-Penalty CD rate goes up. In the online application for a new No-Penalty CD, you can select your existing No-Penalty CD as an option to fund the new No-Penalty CD.

For CIT Bank’s Term CD, currently the 6-month Term CD has the most competitive rate (5.00% APY). Its 18-month Term CD (4.60% APY) and 13-month Term CD (4.65% APY) are comparable to the rates that other large online banks are offering.

However, the rates of other CIT Bank CD terms are very low. All the long-term CDs with maturities of two to five years have rates far below 1.00%. These rates are not only below average online CD rates, they’re below the average brick-and-mortar CD rates.

One thing to watch out for when a bank has several uncompetitive CDs is that you should be extra careful if you do open one of its competitive CDs. When that CD matures, it may auto-renew into a much lower rate. You can’t trust that it’ll be competitive. Second, the bank won’t be a good place for a CD ladder where you depend on competitive rates for short-, medium- and long-term CDs.

CIT Bank also offers Jumbo CDs that require a $100k minimum deposit. These have terms from two to five years. Like the Term CDs, these Jumbo CDs have the same very low rates.

CIT Bank used to offer RampUp CDs that offered both a rate-bump option and an add-on deposit option. The RampUp CDs are no longer available for new accounts.

CD Features

The CD early withdrawal penalties (EWP) are detailed in the CIT Bank FAQs. For the terms of interest, the EWP reads as follows:

CD Term - Terms up to 1 year

Penalty

The penalty we may impose will equal 3 months’ simple interest on the amount withdrawn.

CD Term - Terms of more than 1 year up to 3 years

Penalty

The penalty we may impose will equal 6 months’ simple interest on the amount withdrawn.

CD Term - Terms of more than 3 years

Penalty

The penalty we may impose will equal 12 months’ simple interest on the amount withdrawn.

According to the CIT Bank Agreement for Personal Accounts, early withdrawal of principal from a CD may be denied:

If we permit an early withdrawal of principal, we may impose an early withdrawal penalty on the amount withdrawn

Partial withdrawals are not permitted. However, “withdrawals of available interest are permitted at any time during the term of any CD product.”

When CDs mature, there’s a 10-day grace period when you can close the CD without an early withdrawal penalty. You can request a withdrawal by sending a secure message while logged into Online Banking or by calling customer service. If you don’t contact CIT Bank before the end of the grace period, CIT Bank will automatically renew your CD at the original term and current rate.

Funds from a CD can be received by requesting a transfer of funds to an existing CIT Bank account or to an account at another financial institution. Wire transfer and mailed check are also options.

CIT Bank Customer Service

If you call CIT Bank customer service, you might have to wait. Last year I had called twice to ask questions to customer service. In my first attempt at reaching a CSR I spent 15 minutes waiting, but then I gave up. In my second attempt, I waited 39 minutes and was finally connected to a CSR who was knowledgeable and able to answer my questions.

Several reviews mention this long wait for customer service. One review claims that the long wait for customer service hasn’t always been the case:

have been a customer for several years, in the past I would be put on hold for 5 to 10 minutes, recently every time I called there has been a 45 to 53 minute wait.

CIT Bank customer service for new or existing accounts is available from 9:00am to 9:00pm ET, Monday through Friday, and from 10:00am to 6:00pm ET on Saturday. Within the US, the CIT Bank customer service number is 855-462-2652.

Beneficiaries

According to CSR, beneficiaries can be designated in the online application. As many beneficiaries as you want can be added. Social security numbers, mailing address and names are required for each beneficiary.

Availability

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.

According to the CSR, the application process only does a soft credit pull, with no hard pull that would ding your credit score.

Joint accounts and custodial accounts can be opened. Accounts cannot be titled in a trust, and business accounts are not available.

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 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 January 2022, First-Citizens Bank & Trust Company (First Citizens Bank) acquired CIT Bank. Before this acquisition, CIT Bank had operated for several years as an online bank. In 2015, CIT Bank merged with OneWest Bank, resulting in a national bank that re-branded as CIT Bank, N.A.

CIT Bank/First Citizens Bank has an overall health grade of "A" at DepositAccounts.com, with a Texas Ratio of 3.89% (excellent), based on March 31, 2023 data. In the past year, the Bank has increased its total non-brokered deposits by $48.14 billion, an excellent annual growth rate of 53.2%. Please refer to our financial overview of CIT Bank/First Citizens Bank (FDIC Certificate # 11063) for more details.

First Citizens Bank grew substantially in the first quarter of 2023 due to its acquisition of Silicon Valley Bridge Bank (the FDIC created the bridge bank when it took control of Silicon Valley Bank). In the first quarter, assets grew from $109 billion to $215 billion, and deposits grew from $90 billion to $140 billion.

It’s important not to confuse CIT Bank with Citigroup Inc., which is the bank holding company of Citibank. The CIT Bank name came from CIT Group Inc., a bank holding company best known for providing commercial financing and other services to small and middle market businesses.

How the Platinum Savings Account Compares

When compared to the Money Market Accounts and Savings Accounts tracked by DepositAccounts.com that are available nationwide and do not require large balances, have activity requirements or have small balance caps, the CIT Bank Platinum Savings ranks close to the top accounts. The following is a sampling of the accounts with the best rates:

The above information and rates are accurate as of 7/31/2023.

To search for the best rates on liquid bank accounts, both nationwide and state specific, please refer to our Money Market Accounts Table and Savings Accounts Table.