In today's interest rate environment it's rare to see a bank increasing deposit rates. That happened yesterday at CIT Bank when it increased rates of its savings accounts and CDs. The savings account had the largest rate increase. The top-tier yield went up from 0.90% to 1.05% APY. The most noteworthy CD rate increase was on the 2-year Achiever CD. Its yield increased from 1.20% to 1.25% APY. Below is a summary of all of the CIT Bank rate increases (as of 5/15/2012):
CIT Savings Account
- 1.05% APY $25K+, 0.90% APY under $25K [was 0.90%/0.85%]
Achiever CDs, $25,000 minimum deposit
- 2-Year: 1.25% APY [was 1.20%]
- 1-Year: 1.10% APY [was 1.08%]
Jumbo CDs, $100,000 minimum deposit
- 3-Year: 1.44% APY [no change]
- 2-Year: 1.25% APY [was 1.21%]
Term CDs, $1,000 minimum deposit
- 3-Year: 1.42% APY [no change]
- 2-Year: 1.20% APY [was 1.19%]
- 1-Year: 1.06% APY [no change]
- 6month: 0.45% APY [no change]
CIT Savings Account
CIT Bank launched the savings account in March when the top tier rate was only 0.85%. That was increased to 0.90% in early May. I think CIT Bank realized that in today's environment, new internet banks have to offer something compelling to attract deposits. This new 1.05% APY is now very competitive although it's still quite a bit less than the 1.25% APY offered by the savings account leader, TIAA Direct. Just like TIAA Direct, there's no clue about how long this rate will last. In addition to TIAA Direct, Barclays is another new internet bank. The competition from the new and old internet banks will hopefully prevent these new internet banks from being quick to lower these rates.
One downside with CIT Bank savings account is that they still don't have an online ACH bank-to-bank transfer service. Currently, to initiate ACH transfers at CIT Bank, you'll have to call and give them your other bank's routing number, account number and account type. In April I was told they are working on the online service. I called again today, and it's still in the works.
Even though they don't have an online ACH bank-to-bank transfer service, they do offer one nice feature. If you maintain a balance of at least $25,000, they provide free wire transfers (including outgoing). I was told they need some written information for a wire transfer. This can be done by fax or email. Then you can initiate the transfer with a call.
Another way to make transfers is to initiate them from your other bank. I was told they do not block ACH transfers that originate from your accounts of other banks.
Please refer to my CIT Savings account review for more details.
CIT Bank Achiever CD
The Achiever CDs are the best CD deals at CIT Bank, and with the new rate hikes, they become even better deals. The only downside is that they have a $25K minimum deposit. The Achiever CDs have two nice features:
- add an additional deposit to your CD during the term
- increase your rate once during the term
I especially like the add-on feature for the 2-year CD. Add-on features are most useful for longer-term CDs. Assume you open this 2-year Achiever CD today, and you choose to add to the CD one year from now. Adding to the CD will be like opening a 1-year CD with a 1.25% APY. If interest rates overall stay the same in the next year, that would probably be better than any 1-year CD. If rates continue to fall, it becomes even more competitive.
Please refer to my CIT Bank CD review for more details.