CIT Bank Launches an Internet Savings Account

CIT Bank has recently launched an internet savings account called CIT Savings. CIT Bank first launched its internet bank offering CDs last October. The savings account interest rate isn't that great compared to other new internet banks, but the rate is competitive. It's 0.85% APY for a daily balance of at least $25,000 and 0.80% for lower balances (as of 4/03/2012). My guess is that CIT Bank decided against the strategy of using teaser rates to attract deposits.

The most noteworthy feature of the CIT Savings account is free outgoing wire transfers for customers who maintain a daily balance of at least $25,000 ($10 fee for smaller balances). Incoming wire transfers are free regardless of balance.

The other CIT Savings features are typical for online savings accounts. These include:

• No monthly maintenance fee
• $100 minimum balance required to open an account
• Free online transfers
• No account closure fee
• You may add a beneficiary as the Payable on Death (POD) designee.

I had a few concerns when I read CIT Bank's FAQs. However, I called CIT Bank's customer service (855-462-2652), and the CSR answered my concerns.

First, one FAQ described how one would make electronic (ACH) deposits and withdrawals from your account after it's opened. It said that customers can do this by phone with no mention of an online capability. According to the CSR, they are working on an online transfer service that will allow customers to initiate electronic transfers while logged into their account. They hope to have this operational in about two weeks. They will have more details about this transfer service when it becomes operational. I was told they do not block electronic transfers that originate from your accounts of other banks. So you should be able to push/pull using your other banks.

Update: CIT Bank has implemented a bank-to-bank transfer service. Please refer to this post for more details.

I was also concerned about the funds availability FAQ. It said that "Funds are normally available between 5 and 10 business days from day of deposit". According to the CSR, this is just a worst case scenario primarily dealing with check deposits. Most ACH deposits will likely be available much sooner. No delays will be applied to incoming wire transfers since the money is verified by the other bank.

CIT Bank Certificates of Deposit

I still think the most noteworthy product of CIT Bank is its Achiever CDs which gives you options to add an additional deposit to your CD and increase your rate during the term. The add-on feature is very useful if rates stay low or continue to fall. The bump-up feature can be useful if interest rates rise and new Achiever CD rates also rise.

I described CIT Bank's 1-year and 2-year Achiever CDs in my January CIT Bank CD review. The 2-year CD rate has fallen a little since that time, but it's still competitive. As of 4/03/2012, the 1-year Achiever CD has a 1.08% APY and the 2-year Achiever CD has a 1.20% APY. Minimum deposit is $25,000.

Application Process

You can apply for CIT Savings with an online application. It's available for people in any state. Funding is 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. You also have the option to mail in a check.

CIT Bank Overview

Don't confuse CIT Bank with Citigroup Inc. which is the bank holding company of Citibank. CIT Bank is one of the businesses that make up CIT Group Inc., a bank holding company best known for providing commercial financing and other services to small and middle market businesses. CIT Group had some difficulties in 2009. However, the FDIC-insured CIT Bank is financially strong. That's the most important factor for depositors. The bank's overall health score at DepositAccounts.com is 5 stars (out of 5) with a Texas Ratio of 0.03% (excellent) based on December 2011 data. Bankrate also shows a strong bank with a 4-star rating based on December 2011 data. Please refer to our financial overview of CIT Bank for more details. The bank has been a FDIC member since 2000 (FDIC Certificate # 35575).

Edit 4/17/2013: Updated with new minimum balance requirement.