CIT Bank has just joined the 1% club. Its savings account rate for a $25K balance increased from 0.95% to 1.00% APY. Balances under $25K earn 0.95% APY. Minimum deposit is $100. The savings account has the typical features that we expect from an internet bank such as no monthly maintenance fees and a free funds transfer service via ACH. It also has some additional features that are rare from internet banks. These include free outgoing wire transfers for customers who maintain a daily balance of at least $25K and accounts available as custodial accounts and IRAs. I have more details in my last CIT Bank savings account review.
In addition to the savings account rate, CIT Bank increased the rates of several of its CDs and IRA CDs. The table below summarizes the savings account and some of the CDs and IRA CDs that had rate hikes. Please refer to our CIT Bank rates table for the full list of CIT Bank CDs, IRAs and savings accounts.
The most noteworthy rate hike was on the 4-year Jumbo CD. That rate increased 15 basis points to 2.10% APY. The Jumbo CD requires a $100K minimum deposit. CIT Bank’s 4-year Term CD also had a rate increase. That rate went up 10 basis points to 1.90%. CIT Bank’s Term CDs require only a $1K minimum deposit.
Another noteworthy rate increase was on the 2-year RampUp Plus CD. That rate increased 5 basis points to 1.30% APY. Minimum deposit is $25K. When you factor in the features of the RampUp Plus CD, this becomes a very attractive CD. In addition to the ramp-up feature that allows the customer to make a one-time rate increase, the 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."
The above CD rates are also available in IRAs and custodial accounts. One nice aspect of CIT Bank is that they have regularly offered existing customers higher promotional rates on CDs and IRA CDs.
The one downside with CIT Bank CDs is an early withdrawal penalty that’s a little high for the long-term CDs. 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- 3 months’ interest for the amount withdrawn if your account has an original maturity of one year or less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 and an online savings account in 2012. 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).