CIT Bank has just increased the rates by 15 basis popints on its 5-year CDs and IRA CDs. For the Jumbo 5-year CD, the yield increased from 2.05% to 2.20%. This has a $100,000 minimum deposit. For the regular 5-year CD, the yield increased from 1.85% to 2.00%. This has a $1,000 minimum deposit. This 2.20% APY is now the highest 5-year CD rate for internet banks. It tops EverBank’s 5-year CD yield of 2.16% which had been the internet bank leader. Of course, it’s not close to the CD rates available at certain credit unions. PenFed is offering a 3.04% APY and Navy Federal is offering a 2.55% APY. Nevertheless, it’s always nice to see higher CD rates, and hopefully, this will push the other internet banks to increase their rates.
There is one downside with CIT Bank’s 5-year CDs. That downside is a harsh early withdrawal penalty equal to 12 months’ interest on the amount withdrawn. Below are the early withdrawal penalty details as described in CIT Bank’s FAQs:
- 3 months’ interest for the amount withdrawn if your account has an original maturity of one year or less
- 6 months’ interest for the amount withdrawn if your account has an original maturity of more than one year and less than or equal to three years
- 12 months’ interest for the amount withdrawn if your account has an original maturity of more than three years
Unfortunately, there were no rate increases on CIT Bank’s Achiever CDs. The 1-year Achiever CD yield remains at 1.05%, and the 2-year Achiever CD yield remains at 1.20%. Nevertheless, these are still competitive rates, and these are still great deals since the Achiever CDs allow for one rate bump-up and one unlimited additional deposit. The only downside is a high minimum initial deposit of $25,000.
CIT Bank Overview
CIT Bank started offering internet CDs in 2011. 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 has an overall health grade at DepositAccounts.com of an A+ with a Texas Ratio of 1.57% (excellent) based on September 2013 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).