CIT Bank has just increased the rates on its 1-year CDs and its 5-year Jumbo CD. The 5-year Jumbo CD rate increased by 5 basis points to 2.35% APY. The RampUp Plus 1-year CD rate increased 7 basis points to 1.12% APY, and CIT Bank’s standard 1-year Term CD rate increased 5 basis points to 1.07% APY. All three of these CDs are also available in an IRA. The Jumbo CD requires a $100K minimum deposit, the RampUp Plus CD requires a $25K minimum, and the Term CD requires a $1,000 minimum.
The new 2.35% is a top yield for a nationally available 5-year CD. The 1.12% APY isn’t the best 1-year CD rate that’s nationally available, but it’s close. When you factor in the features of the RampUp Plus CD, it becomes even more competitive. In addition to the ramp-up feature that allows the customer to make a one-time rate increase, the 1-year RampUp Plus CD has an add-on deposit feature that allows the customer to make one additional deposit during the term. This add-on feature can be very useful if interest rates stay low like they have been over the last five years.
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- 3 months’ interest for the amount withdrawn if your account has an original maturity of one year or less
- 6 months’ interest for the amount withdrawn if your account has an original maturity of more than one year and less than or equal to three years
- 12 months’ interest for the amount withdrawn if your account has an original maturity of more than three years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 online CDs in 2011. It’s important not to 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 consideration for depositors. The bank has an overall health grade at DepositAccounts.com of an A+ with a Texas Ratio of 3.24% (excellent) based on June 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).