CIT Bank increased the rates of its savings account by 5 basis points. It now has a 0.95% APY for balances of $25K and above, and a 0.90% APY for balances under $25K. A $100 minimum balance is required to open and maintain the account. There is no monthly service fee.
CIT Bank has kept this savings account competitive since it was first launched almost two years ago. We have been seeing rate increases at a few internet banks in the last month. Hopefully this is a start of a trend. It’s a lot more fun to report on deposit rate hikes than on rate cuts.
CIT Bank savings account has some nice features. One unique feature is free outgoing wire transfers for customers who maintain a daily balance of at least $25,000 ($10 fee for smaller balances). Incoming wire transfers are free regardless of balance.
Another unique feature is that you can open the savings account in either a custodial account or in an IRA. These can help to reduce your income taxes. Not many internet banks offer custodial accounts. This can be useful for your children or grandchildren. The custodial account lets you save money in a child’s name which can be used for education or any other costs that benefit a child. Since CIT Bank is based in Utah, the child won’t get control of the money until he/she turns 21.
CIT Bank now has a free ACH funds transfer service. The bank was a little slow in offering this service when the savings account was launched in 2012. The service allows up to three external accounts to be linked for funds transfer. These links can be established using the bank’s online funds transfer service. It requires verification of two small deposits to the external account.
An important aspect of an ACH transfer service is the limit on the amounts that can be transferred. If the limit is small, it can make the service useless. CIT Bank doesn’t have one withdrawal limit that applies to all customers. It can vary based on the customer. I was told by a CSR that the maximum limit is $75,000 per day, but it may be lower for some customers. I was told you can call and request a withdrawal transfer of up to $250,000. Here is what is stated in the FAQ section:
CIT Bank does not limit the amount you may deposit to any account, other than a CIT Bank Achiever CD account (where a $250,000 additional deposit limit applies), nor are there limits on the amount you may withdraw as long as you have sufficient funds (or up to the total balance in the account). If, however, you request enrollment in the online Funds Transfer service, you will be assigned daily funds transfer dollar limits based on the information CIT Bank obtains from your credit profile and related sources. Transfers are limited to three deposits and three withdrawals a day. If you need to exceed the limits granted, contact the CIT Bank Customer Service Center at 855-GO-BANKCIT (855-462-2652) and our representatives will assist you.
CIT Bank’s application allows up to three POD beneficiaries to be designated. I was told by the CSR that you can add as many beneficiaries as you want after the account is opened. I was also told that organizations like charities can be beneficiaries. According to the CSR, they cannot open accounts in the name of a trust. However, you can designate a trust as a beneficiary.
CIT Bank Certificates of Deposit
I still think the most noteworthy product of CIT Bank is its Achiever CDs which gives you options to add an additional deposit to your CD (maximum $250,000) and increase your rate during the term. The add-on feature is very useful if rates stay low or continue to fall. The bump-up feature can be useful if interest rates rise and new Achiever CD rates also rise.
CIT Bank’s regular CDs don’t have the add-on or bump-up features, but they do have very competitive rates. CIT Bank’s Jumbo 5-year CD rate is on top for internet banks with a 2.20% APY (as of 2/13/2014).
You can apply for CIT Savings 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 Overview
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 grade at EpBooks.us is an A+ with a Texas Ratio of 1.57% (excellent) based on September 2013 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).