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As many readers know, Vanessa and I are long-time Discover Bank customers. Although we are generally pleased with Discover’s product offerings, I was intrigued by an email I received about CIT Bank and have opened three separate accounts detailed later in this review.
Thus far, I’ve been impressed by the competitive interest rates and friendly customer support and plan to maintain our CIT Bank accounts alongside our Discover accounts for the foreseeable future.
CIT Bank History
CIT Bank is an FDIC-insured internet bank based in Pasadena, California. The CIT Group brand, founded in 1908, operates a number of different financial divisions and employs more than 4,100 people worldwide. The company is well-established on the Forbes Fortune 500 list and offers common stock that is publicly traded on the New York Stock Exchange.
Being an internet bank, CIT offers no physical branch locations. Instead, all deposits, transfers, and account features must be accessed through a computer or smartphone app. The lack of physical branches helps to significantly reduce overhead costs, which translates into more competitive product offerings.
CIT Bank offers a variety of loans and personal banking products, including two High-Yield Savings Accounts, a Money Market Account, and several unique Certificates of Deposit (CDs). Individuals looking for an online checking account will need to look elsewhere, as CIT doesn’t currently offer any type of checking account.
CIT Bank High-Yield Savings Account(s)
CIT Bank offers two separate savings accounts, as detailed in the sections below.
CIT Bank Savings Builder Account
The CIT Bank Savings Builder Account is the most competitive product currently offered by CIT Bank, including the following features:
- $100 minimum deposit required to open the account (no minimum balance required once the account is opened)
- Free internal/external money transfers (no fees to push or pull money from bank accounts held outside of CIT)
- No account opening, monthly servicing, or account maintenance fees
- Daily interest compounding (credited monthly)
- FDIC insurance
- 2.10% APY interest rate
To earn the 2.10% APY interest rate, you must meet one of two qualifying activities each month:
- Maintain $25,000+ in the savings account,
- Make a $100+ monthly deposit into the savings account
Performing either activity will earn the 2.10% APY rate that month, but the $100 monthly deposit is clearly easier for most to achieve.
Note, all savings and money market accounts, including those offered by CIT Bank, allow a maximum limit of six external transfers per statement cycle. The number of deposits into these accounts are not restricted. If you exceed six external transfers, you will be charged a $10 fee per transaction (up to $50/month). This transaction limit was established by recent Federal regulations and applies to all FDIC-insured banks (not unique to CIT).
CIT Bank Money Market Account
The Money Market Account at CIT offers the same features described above, but earns a 1.85% APY interest rate instead of the 2.10% APY offered by the Savings Builder Account.
The only practical difference between the Money Market Account and both Savings Accounts is that the money market account includes People Pay, which is a free service that allows you to send money from your Money Market account to almost anyone with an email address or mobile phone number. None of these accounts include check writing or ATM access.
CIT Bank Certificate of Deposit (CDs)
* The information below is maintained for accuracy, but as of 2019, there is no reason to choose a CIT Bank CD over the Savings Builder Account described in the section above.
In addition to the Savings and Money Market Accounts, CIT Bank offers several different certificates of deposit (CDs). With a CD, you lend your money to CIT for a predetermined period of time in exchange for monthly interest payments. At the end date of the agreement, you receive your entire initial investment back as a lump sum.
CIT Bank offers a variety of CD products that are open for investment, although some are objectively better than others. The CD offerings discussed below are all subject to a $1,000 minimum opening deposit and are fully insured by the FDIC.
The “Term CDs” offered by CIT are traditional products where you decide how long you will deposit your money with CIT. With traditional CDs, a longer deposit term always results in a higher interest rate because your money will be tied up for a longer period of time. For example, here are the current rates:
- 13-month CD – 2.25% APY
- 18-month CD – 2.50% APY
There are definite drawbacks. With a traditional CD, you cannot withdraw any part of your initial investment before the term ends. Any withdrawal before then will result in an “early withdrawal penalty” according to the following fee schedule:
- CD term of 12 months or less – Penalty equals 3 months of interest
- CD term of 12-36 months – Penalty equals 6 months of interest
- CD term greater than 36 months – Penalty equals 12 months of interest
Luckily, CIT Bank offers a different type of CD that solves all of these problems – the CIT No-Penalty CD.
The No-Penalty CD offers the following features:
- 11-month term
- No early withdrawal penalties or fees
- 2.05% APY interest rate (credited daily, deposited monthly)
You may choose to reinvest the earned interest back into the CD, deposit the interest into an existing CIT Bank Money Market or Savings Account, or even set up an electronic transfer to an external checking or savings account.
According to the official terms, you may withdraw the entire principal and interest earned, without penalty, beginning seven days after the initial CD deposit. No withdrawals are permitted during the first six days following the receipt of funds. You can request a withdrawal of any CD funds via secure message through your online account or via telephone at 855-462-2652.
In my experience, the withdrawal process takes several days to complete after you call or receive a secure message response. The last time I needed to liquidate a No-Penalty CD, I called on a Friday and it took four business days until the funds were transferred out of the CD and deposited into my CIT Money Market Account.
To summarize, the downsides of the No-Penalty CD (when compared to a savings or money market account) include the initial six-day lockout period and the fact that it takes CIT several days to liquidate and transfer the CD funds into another account.
Opening a CIT Bank Account
Establishing a new account at CIT Bank is a straightforward 5-step process.
1) Select your desired products, such as the Money Market Account or No-Penalty CD.
2) Input your basic personal information that is required to verify your identity.
3) Electronically sign your application and account agreements.
4) Choose how to fund your opening deposit ($100 minimum / $1,000 for any CD).
5) Create your online banking credentials to manage all of your accounts online.
CIT Bank Review Summary
Over the course of 2018, I opened a Money Market Account and No-Penalty CD with CIT Bank. In 2019, I opened the Savings Builder Account because the 2.10% APY interest rate is currently the highest rate offered by any FDIC-insured savings account.
Although the competitive interest rates first drew my attention, I’ve been impressed by the entire online experience. Since opening my accounts, I’ve had a few questions about features, interest rate changes, and balance requirements (there are none). I first called the customer support line and was able to reach a CIT Bank representative immediately. Later on, I logged into my online account and noticed a secure messaging system that is available 24/7. Instead of calling, I sent a secure message and received a reply the next business day. The support has been friendly and accurate, in my experience.
Overall, CIT Bank is providing a very good customer experience. The interest rate offered by the Savings Builder Account is unmatched even by Discover, where we have several bank accounts, credit cards, and an extensive relationship. With that said, Discover offers a larger variety of banking-related products and incredible 24/7 support based entirely in the U.S., which is why I’ll be maintaining both relationships for the foreseeable future.
I hope that you’ve found my CIT Bank review to be insightful. Please let me know if you have questions in the comment section below.