CIT Bank has just increased the rates on its RampUp 2-year and 3-year CDs. The rates for both CDs went up by 5 basis points making them quite competitive, even without considering the special features. The 2-year RampUp Plus CD now has a 1.25% APY, and the 3-year RampUp CD now has a 1.40% APY. Both have a minimum deposit of $25,000. The 2-year RampUp Plus CD used to be called the Achiever CD. In addition to the ramp-up feature that allows the customer to make a one-time rate increase, the 2-year CD has an add-on deposit feature that allows the customer to make one additional deposit during the term. The 3-year RampUp CD only has the ramp-up feature. In addition to these two RampUp CDs, CIT Bank is also offering an IRA 2-year RampUp at an increased rate (1.25% APY). These rates are accurate as of 7/2/2014.
|1.25%||$25k||$250k||CIT Bank||3 Year RampUp CD|
|1.22%||$25k||-||CIT Bank||2 Year RampUp Plus CD|
|1.22%||$25k||-||CIT Bank||2 Year RampUp Plus IRA CD (Traditional, Roth)|
I consider the add-on feature as more useful than the ramp-up feature. It can be very useful when rates remain low. After one year, you can add more into the 2-year RampUp Plus CD instead of opening a new 1-year CD. If rates haven’t gone up, it’s very likely that the 2-year RampUp Plus CD rate will be higher than any 1-year CD rate.
One important thing to note about the RampUp Plus CD is that there’s a potential limit on additional deposits. According to CIT Bank’s small print:
CIT Bank reserves the right to limit the additional deposit to your RampUp Plus account to $250,000.
It’s also important to note the early withdrawal penalties. 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- 3 months’ interest for the amount withdrawn if your account has an original maturity of one year or less
- 6 months’ interest for the amount withdrawn if your account has an original maturity of more than one year and less than or equal to three years
- 12 months’ interest for the amount withdrawn if your account has an original maturity of more than three years
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 2.72% (excellent) based on March 2014 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).