CIT Bank has launched an internet bank that offers certificates of deposit. The CDs have competitive rates with some unique features. 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. Don't confuse it with Citigroup Inc. which is the bank holding company of Citibank. CIT Group had some difficulties in 2009, and it's still not in the best shape. However, the FDIC-insured CIT Bank is financially strong. That's the most important factor for depositors.
CIT Bank is currently only offering internet CDs with terms from 6 months to 3 years.
The best deal is the bank's 1-year Achiever CD. What makes this such a good deal is that it allows you to make one additional deposit during the term. This can be useful if you have a CD that's going to mature in the next few months. You can lock in the 1-year CD rate now, and you don't have to worry about lower rates a few months from now. When your other CD matures, you can make the add-on deposit into this 1-year Achiever CD with the original interest rate.
The other nice feature is a rate bump. If rates go up, you can take advantage of the higher rate.
The most important feature of the 1-year Achiever CD is the interest rate, and it's quite competitive as compared to other internet banks. It has a 1.15% APY with a minimum deposit of $25,000 (as of 10/17/2011). That may sound low, but it's about the same as the best nationally available 1-year CDs from banks. When you consider those other banks don't have the add-on and bump-up features, the CIT Bank's Achiever CD has a clear advantage.
CIT Bank's other internet CDs are more typical with the standard CD features. CIT Bank's Term CDs have maturity periods from 6 months to 3 years. Minimum deposit is $1,000. CIT Bank's Jumbo CDs have terms of 1 and 2 years with a minimum deposit of $100,000.
Some of the important features of the CDs are described in CIT Bank's FAQ page. Here are a few of the important ones:
- Early withdrawal penalty is 3 months interest for CD terms 1 year and less, 6 months interest for CD terms greater than 1 year
- Grace period when the CD can be withdrawn without penalty is 10 days starting with the maturity date
- Posted interest on the CD can be withdrawn at any time
- Interest is compounded daily, and credited it to your account monthly
You can apply for CIT Bank CDs with an online application. It's available for people in any state. Funding is done with an electronic funds transfer from an outside bank account. As is typical with setting up an ACH transfer, you provide CIT Bank with the routing and account number of your outside account. You also have the option to mail in a check.
CIT Bank Financial Overview
Even though it has just started taking deposits online, CIT Bank has been around for a while. CIT Bank has been a FDIC member since 2000. It's a sizable bank with almost $7 billion in assets and over $4 billion in deposits. The bank's overall health score at EpBooks.us is 5 stars (out of 5) with a Texas Ratio of 0.87% (excellent) based on June 2011 data. Bankrate also shows a strong bank with a 4-star rating based on March 2011 data. Please refer to our financial overview of CIT Bank for more details.