We’re getting our CD rate “Deal of the Month” going again for savers looking for the top rates offered by FDIC insured institutions!
February 2013 winner: CIT Bank’s 2 Year “Achiever” CD
Why we Chose CIT Bank for February 2013?
First and foremost – the rate. In today’s rate environment anything over a percent is considered lucrative. And CIT Bank’s 1.20% APY is the highest yielding rate for any 2 year CD.
Why a 2 year CD? We love 2 year deposits right now because the FED is pinning this as the time frame for when they will begin to raise rates again. Therefor locking in a 2 year deposit to maximize your returns before a rising interest rate environment strikes again is, in our opinion, the best approach.
[Related: Learn about CD laddering strategies to increase liquidity while investing in bank deposits.]
To be more specific about the time frame of rate hikes, the FED has stated that unemployment must hit 6.5% before they consider raising rates. As of February 2013, this figure sits around 7.8%. So we are close, but likely still a couple years off.
On top of the good rates offered by CIT, there are zero fees accompanied with their savings products, and we all know that looking for a bank with no fees these days is difficult. Thanks to new government regulations allowing for banks to increase profit margins, however, more and more banks are tacking them on. If you are already letting the bank make money from holding your money, the last thing you want to do is pay for the privilege of banking with a certain bank, yet that is what many people do.
Don’t You Mean Citigroup? A Case of Mistaken Identity for CIT Bank.
CIT was started by Henry Ittleson in 1908 and has been around for over one hundred years. Despite the long history, most people still confuse CIT with Citigroup. Just for the record, these are two completely different companies.
A Bit of CIT History
Now that the confusing issue is out of the way, let me tell you a bit about CIT. For the trivia lovers, CIT stands for Commercial Investment Trust. As the name may suggest CIT originally specialized in business banking, but has added personal deposit banking to their product lines over the last couple years.
The company is headquartered in New York City and has an innovative history. For instance, in 1916 CIT worked with Studebaker to offer auto financing. This was the first time a bank had worked with a car company to offer financing. Borrowers paid 1/3 down on the car and then made 8 monthly installments for the remaining balance. (Oh, how times have changed!)
What Makes CIT a Good Bank to Work With?
As a consumer, you likely want to know the bottom line. What’s in it for you? Why choose CIT over another bank?
First, CIT is FDIC insured, which means that if the bank fails, your funds are insured up to $250,000 per account you hold. Never bank with a bank that is not FDIC insured.
Strictly an Online Bank
CIT is now strictly an online bank. While some consumers worry that transferring money in and out of an online only bank will be difficult, it really isn’t. All you need to do is link your CIT account to your existing accounts at another bank to make seamless transfers.
Another bonus of being entirely an online bank is that CIT doesn’t have to charge as many fees as other banks because CIT doesn’t have to maintain brick and mortar locations.
CIT Personal Accounts
While CIT works extensively with small and mid size businesses, they also have personal accounts for individuals, which are free of many of the common fees other banks charge.
You can open and maintain a CIT savings account with just $100. The savings account is free of the typical fees many other banks charge:
- Monthly Maintenance Fee
- Online Transfer Fee
- Mail Check Fee
- Incoming Wire Transfer Fee
- Account Closure Fee
If your account balance is less than $25,000, you will be charged $10 per outgoing wire transfer. If your average daily balance is $25,000 or more, this service is free.
Any account with a balance under $25,000 earns .90% APY. If your account is over $25,000, you’ll earn 1.00%, which is better than many banks these days offer.
CDs are not as favorable as they once were thanks to the current low interest rates, but if you are looking for a safe place to put your money, CIT offers 3 CD options:
Term CD–This is a $1,000 CD. You can place the money in the CD for as short as 6 months or as long as 5 years. Rates vary based on length with a 6 month CD earning .45% and a 5 year CD earning 1.8%.
Achiever CD–This CD is for amounts of $25,000 or more. You will earn 1.05% for one year or 1.20% for two years. One time during the life of the CD, you can add more money or lock in higher rates if they are available.
Jumbo CD–This is for those who have $100,000 or more to put in a CD. Interest rates range from 1.20% APY for 2 years to 1.85% for 5 years.
Opening an Account Is Easy
Opening an account is a quick and easy process. Simply have handy your social security number, your driver’s license or other valid photo ID such as a passport or state ID, and a check or bank account number to use to transfer money into your new CIT account.
If you have trouble along the way, CIT clearly displays the customer service phone number so you can always call for help.
If you’re looking for an online bank with a long history and strong reputation, CIT may be the bank for you.
Do you have a CIT account? Would you recommend banking with CIT?