CIT Bank Review: Now Offering 2.05% No-Penalty CDs

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As many readers know, Vanessa and I already hold several accounts with Discover Bank. Although we are generally happy with their product offerings, I was intrigued by an email I received about CIT Bank and decided to open two of the 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 for the foreseeable future.

CIT Bank History

CIT Bank is an FDIC-insured internet bank based in Pasadena, California. The CIT brand, founded in 1908, operates a number of different financial divisions and the company’s common stock 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 the CIT Bank Money Market Account, Premier High-Yield Savings 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 Money Market Account

In March of 2018, I opened a new Money Market Account at CIT, which offers 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 or account maintenance fees
  • Daily interest compounding
  • FDIC insurance
  • 1.85% APY interest rate

Due to the higher APY interest rate, the Money Market Account is objectively better than the Premier Savings Account discussed below. The only practical difference between both 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. Neither account includes check writing or ATM access.

All money market and savings 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 Premier High-Yield Savings Account

Before rolling out the Money Market Account described above, the most popular account offered by CIT was the Premier High-Yield Savings Account.

The Premier Savings Account operates almost exactly like the Money Market Account and includes the same 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 or account maintenance fees
  • Daily interest compounding
  • FDIC insurance
  • 1.55% APY interest rate

In my research, there is basically no reason to choose the Premier Savings Account instead of the Money Market Account. They both offer the exact same features, but the money market account includes the free online People Pay system discussed above and offers a higher APY interest rate.

CIT Bank Certificate of Deposit (CDs)

In addition to the Money Market and Premier Savings Account, 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 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.

Basically, you are earning an additional 0.20% by choosing the No-Penalty CD instead of the Money Market Account. The downsides 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

CIT bank reviews

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

Before opening a Money Market Account and No-Penalty CD, I had no prior relationship with CIT Bank. The competitive interest rates first drew my attention, but I’ve been impressed by the entire online experience. Right now, the No-Penalty CD is our primary emergency fund because the interest rate beats everything offered by competing banks.

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 morning. The support has been very friendly.

Overall, CIT Bank is providing a very good customer experience. The interest rates offered by the Money Market Account and the No-Penalty CD are unmatched even by Discover, where I 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.

CIT Bank Review
Summary
Free to open and maintain, the CIT Bank Money Market Account and No-Penalty CD offer best-in-class interest rates and no fees. For these reasons, I've switched several accounts from a local big bank to CIT Bank.
Features8.1
Total Cost9.5
Ease of Use9.4
Interest Rates9.5
Customer Support8.1
Strengths
FDIC insurance
No maintenance fees
No minimum balance requirements
Best-in-class interest rates
Free internal/external money transfers
Weaknesses
No physical branches
No checking account available
8.9
Overall

Editorial Disclaimer: The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.

User Generated Content Disclosure: Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

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Jacob Lumby, PhDJoshLinda KDave KJoe C Recent comment authors

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Dave K
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Dave K

Jacob – I just noticed CIT now has a Savings Builder Account (2.15%). The customer has to have at least a $25K balance, or add $100 monthly to their account to be paid the 2.15%. Is there any reason one wouldn’t want to move their money from the High Yield Savings (1.55%) or the Money Market Account (1.85%) to the new Savings Builder Account?

Josh
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Josh

I must be missing the point. There are high yield savings or MM accounts offering 2.00% APY and even a bit higher. So why mess around with a CD? Popular Direct 2.00%. Last time I checked Northpoint Bank 2.05%, Virtual Bank 2.01%, and Salem Five Direct 2.05%. I think there may be a few more now with rates over 2.00%. Even if you did want a 1 year CD, Vanguard’s rates for 1 year CDs are 2.50%. Their 3 month CD is 2.05%!

Linda K
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Linda K

Thanks for your website/blog I plan to open an account with CIT Bank.

Dave K
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Dave K

Thanks for your reviews of CIT Bank. Based on your review of the high-yield savings account and some other internet research, I opened a HYS account. Everything went well getting it open. My only disappointment was that it took 5 full business days to have my funds made available at CIT when I initiated the transaction from CIT and withdrew funds from an account at my bank where I live. CIT does inform the account holder that it may take up to 5 days. However, I was hoping that it might take less than that. I’m sure there are some… Read more »

Joe C
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Joe C

Doesn’t a no penalty CD just encourage people to withdraw early? I thought the whole point of a CD is a higher rate but no access to the money during the term so the bank can lend it out. I’m not sure how a product like this could be sustainable for the long-term. I guess we’ll have to wait and see. Thanks for posting about this.