CIT Bank has recently added Individual Retirement Accounts (IRAs). Its savings account and all of its CDs except its 6-month CD are now available in an IRA. Both traditional and Roth IRA are available. There are no maintenance fees or other charges.
The unique feature about CIT Bank is its Achiever CDs which allow a one-time add-on deposit and a one-time bump-up in the rate during the term of the CD. These are available for both 1-year and 2-year terms, and both are now available in an IRA. There’s a minimum initial deposit of $25,000.
One downside with CIT Bank IRA CDs is that the bank doesn’t waive the early withdrawal penalty when you reach 59½. Of course, you won’t have to worry about the IRS penalty once you reach 59½. Having a savings account in your IRA can be helpful for planning for distributions and transfers. When your CIT Bank IRA CD matures, you can have those funds moved into your CIT Bank IRA savings account. Once it’s in the savings account, you don’t have to worry about CD early withdrawal penalties when you take distributions or if you want to transfer the IRA to another bank. I was told there’s no fee if you decide to transfer the IRA out of CIT Bank.
CIT Bank Overview
CIT Bank started offering internet CDs in 2011 and a savings account in 2012. Don't 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 factor for depositors. The bank's overall health score at EpBooks.us is 5 stars (out of 5) with a Texas Ratio of 0.34% (excellent) based on December 2012 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).
How CIT Bank Savings Account and CD Rates Compare
It has been about a year since CIT Bank first launched its savings account, and since that time, the rates have remained very competitive, especially for a minimum balance of $25,000. Its current rate as of 4/18/2013 is 1.00% APY for a $25K minimum balance and 0.90% APY for a $100 minimum balance. The only internet bank with a higher non-promo rate is MyBankingDirect which has a money market account with a 1.05% APY.
CIT Bank also has a history of competitive CD rates. Both the 1-year and 2-year Achiever CD rates are very competitive even if you don’t consider the flexible features. As of 4/18/2013, the 1-year Achiever CD has a 1.05% APY and the 2-year Achiever CD has a 1.20% APY. This 1-year CD rate is the highest available from an internet bank. It’s tied with the 1-year CDs at NexBank, Nationwide Bank and GE Capital Retail Bank (formerly MetLife Bank). CIT Bank’s Achiever 2-year CD rate is just a little under the best 2-year internet CD rates (1.30% APY from NexBank and 1.25% APY from Nationwide Bank).
CIT Bank’s Jumbo CD rates are often near the top when compared to internet CD rates. Its 5-year Jumbo CD currently has a 1.75% APY which is just under the Barclays’ 1.85% APY 5-year CD.
The above rates are accurate as of 4/18/2013.