Updated January 10, 2018

CIT Bank Review: Savings and CD

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CIT Bank offers high interest rates on its online savings and CD accounts. But there are some downsides. Here's what you need to know before you open an account.

If you want to earn a more impactful return on your savings, you may want to look beyond traditional savings accounts that pay very little interest. There are other savings options that offer higher returns. In this article, we will look at how you can use CIT Bank's Premier High Yield Savings Accounts and CDs to help grow your savings account balance.

How It Works

Both high yield savings accounts and Certificates of Deposit (CDs) will earn a higher interest rate than a typical savings account. However, the two products work in fundamentally different ways.

  • CIT Bank's High Yield Investor Savings Accounts can earn up to a 1.55% annual percentage yield (APY). They work much like typical savings accounts, except that CIT Bank does not have physical branch locations or an ATM network.

  • CIT Bank's CDs require you to deposit your savings for a set period of time. Withdrawing funds from a CD before the term has ends will incur a penalty. Also, CDs often have a higher minimum deposit than savings accounts. Due to these requirements, some CDs earn a higher APY than savings accounts.

    CIT Bank

    Premier High Yield Savings Account

    • 1.55% APY
    • $100 Minimum Opening Deposit
    • No Fees to Open or Maintain Account
    • Daily Compounding Interest
    • No Minimum Daily Balance Requirement
    • FDIC Insured

Now that we've covered the basics, let's get into the specifics.

High Yield Investor Savings

CIT is an online bank, so they don't have the overhead cost that brick-and-mortar banks do. This allows CIT Bank to offer a low minimum deposit and a high APY on its Premier High Yield Investor Savings Account. Here is some addition detail:

  • 1.55% APY on balances under $250,000
  • 1.55% APY on balances over $250,000
  • Minimum deposit of $100 to open
  • No account opening fees
  • No maintenance fees
  • Daily compounding interest
  • Free online and mobile banking with Bill Pay
  • FDIC insured

As with any savings account, you'll be limited to 6 withdrawals per month. This is a standard, federally-imposed limitation.

If you need to withdraw money from your CIT savings account, you have a few options: external transfers, wire transfers, and mailed checks. It's important to note that CIT Bank doesn't have an ATM network, so you won't be able to withdraw cash directly from your savings.

    CIT Bank

    Premier High Yield Savings Account

    • 1.55% APY
    • $100 Minimum Opening Deposit
    • No Fees to Open or Maintain Account
    • Daily Compounding Interest
    • No Minimum Daily Balance Requirement
    • FDIC Insured

Is CIT Bank Safe?: CIT's Premier High Yield Savings Accounts are FDIC insured. This means that if CIT Bank defaults, the federal government guarantees the balance in your savings account, up to $250,000.

Certificate of Deposit (CD)

There are a few key factors to consider when deciding on a CD: the term length, the minimum deposit, the annual percentage yield (APY), and how its interest compounds. (Of course, the reputation of the institution is another factor, but we know that all of CIT Bank's savings accounts and CDs are FDIC insured.)

Here are your options:

  • Term CDs: CIT's basic CDs are available in 6 month, 13 month, or 1, 2, 3, 4, or 5 year terms. They require a minimum deposit of $1,000, and interest rates range from .72% to 1.75%.

  • RampUp™ CDs: These CDs allow you to adjust your interest rate once during the term of the CD. This product is offered in 3 or 4 year terms and requires a deposit of at least $25,000 or $50,000, respectively.

  • RampUp™ Plus CDs: With these CDs, you trade some of your return in the form of a slightly lower interest rate for flexibility. RampUp Plus CDs allows you to add to your deposit once after opening the account and change your rate once if CIT Bank's rates increase. This product requires a high minimum deposit of $25,000.

  • No-Penalty CDs: This 11-month CD will allow you to withdraw your funds in-full, penalty-free (including interest earned) beginning 7 days after your funds have been deposited. There is a $1,000 minimum deposit, and the product carries 1.55% APY.

  • Jumbo CDs: These are for large deposits of at least $100,000 at 2, 3, 4, or 5 year terms. They can earn as much as 1.75% APY.

Why We Like CIT Bank

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Here are a few things that we like about CIT Bank's high yield savings accounts and CDs:

  • Low minimum deposits: If you have just started saving or want to set aside a small balance, CIT can be a great choice. Their minimum deposits for Premier High Yield Savings, term CDs, and no-penalty CDs are some of the lowest in the industry.

  • High rates: CIT's Premier High Yield Savings offers such a high APY that it outperforms some of their CDs. This is great news for anyone looking to save, but especially for those who can't pay the high minimum deposits that some other banks require. And if you meet a higher minimum deposit, you can earn as much as 1.75% APY on a CD.

  • Minimal fees: CIT cuts out many fees that other banks profit from. For example, you will not be charged any account opening or maintenance fees.

Reasons You Might Skip CIT Savings

For all of CIT's advantages, the bank's savings product offerings do have some characteristics that need to be considered:

  • No checking accounts: This isn't a huge setback for those who are familiar with transferring money between financial institutions. If you like to keep all of your accounts in one place, this could be a downside.

  • No branch locations: In exchange for the high interest rate on your Premium savings account, you are required to do your CIT banking online and over the phone. And because CIT has no ATM network, you won't be able to deposit or withdraw cash directly to/from your account. Solution: link up to a checking account with a brick-and-mortar bank.

  • No IRAs: CIT personal banking products are limited to savings accounts, CDs, and custodial accounts. These CDs do not qualify for use in a retirement or trust account.

  • No Relationship Rewards: Some retail banks in the US are now offering relationship bonuses to incentivize their customers to keep all of their business in one place. If you move your savings balance to CIT from your retail bank, you may miss out on some of these bonuses. Contact your bank for more details.

Common Questions

If you're still interested, you probably have some questions. We'll clear up some of the basics here:

  • Should I open a CD or savings account?
    This is a really broad question and everyone has different investment goals. The decision comes down to how much you're looking to set aside, how much risk you are willing to take and how much you'll need to access your savings. It is always best to contact your financial professional.

    If you can commit to not touching your savings for at least 1 year and can meet the minimum deposit, you may be able to earn a higher interest rate with a CD versus a savings account. If you need liquidity, a savings account allows you to more flexibility to withdraw your savings when needed.

  • How can I deposit funds with CIT Bank?
    For both savings accounts and CDs, there are three ways to deposit funds: transfer funds electronically, mail a check, or wire funds to your new account.

  • What is the penalty for early withdrawals from CDs?
    It depends on the term of your CD. Here's how it breaks down:

    • Terms up to 1 year: 3 months' interest on the amount withdrawn
    • Terms from 1-3 years: 6 months' interest on the amount withdrawn
    • Terms over 3 years: 12 months' interest on the amount withdrawn

Bottom Line

If you're ready to start building your savings, then you should consider if CIT's high yield savings accounts or CDs are right for you.

Even if you only have $100 in savings, you can start earning interest in a high yield savings account. Or, if you have at least $1,000 set aside and aren't concerned about liquidity, you can earn an even greater return with a CD.

CIT's savings offerings might not be the right savings product for you, but if you're looking to earn interest above that of a standard savings account, opening a savings accounts or CD from CIT is an investment option worth considering.

Disclaimer: Opinions expressed here are those of the author's alone. Please support CreditDonkey on our mission to help you make savvy financial decisions. Our free online service is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content.

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