Last month CIT Bank merged with OneWest Bank. The new bank is now a national bank (National Association) with the name CIT Bank, N.A. OneWest Bank will remain, but it’s now a division of CIT Bank, N.A. Deposit customers of OneWest Bank and CIT Bank probably won’t notice much difference. Both appear to be keeping their websites and product offerings. Also, the branches of OneWest Bank are being retained.
The most important thing for deposit customers is to be aware that the two banks are no longer separate in the eyes of the FDIC. Deposits at CIT Bank and OneWest will be counted together for purposes of determining FDIC insurance coverage limits.
This LA Times article has an interview with John Thain, CIT Group's chairman and chief executive, and in the interview Thain mentioned why CIT decided to buy OneWest:
CIT pursued OneWest not only because it swelled CIT's deposit base but because OneWest's retail deposits "give us a more diverse and lower-cost source of funds" for lending compared with other sources, such as commercial financing and brokered deposits, Thain said.
OneWest may have provided CIT Bank with additional deposits, but fortunately for savers, CIT Bank continues to aggressively attract deposits at its website with its internet savings account and CDs. In the last week, rates on CIT Bank’s savings account and CDs went up.
For the savings account, the rate for balances under $25,000 increased 5 basis points to 1.05% APY. The rate for balances of $25,000+ continues to be 1.05% APY. Please refer to my 2014 blog post for more details on CIT Bank’s High Yield Savings Account.
For CDs, the 2-year CD rates increased. The yields on the 2-year CDs and the 2-year RampUp Plus CDs increased to 1.45% APY. The Jumbo 2-year CD yield increased to 1.47% APY. The same rates are available for IRA CDs. Please refer to my May blog post for more details on CIT Bank CDs and IRA CDs.
For those who already have the 2-year RampUp Plus CD, it’s important to note when rates go up. They have to decide when to use the ramp-up option. That can be a difficult decision. If you jump too soon, you may miss out on future rate hikes. If you wait too long, you’ll have less time earning the higher interest rate.