Not sure if many of you have stopped by our savings rate database lately, but we have a new champion in rates. Currently CiT bank has just surpassed Barclays as the highest yielding online savings account with a 1.05% APY on balances of at least $25,000.
This is somewhat surprising timing for an uptick in savings rates given the latest announcements from the FED reaffirming the 2014 timeline for raising key rates. However, being relatively new in the online savings game, CiT likely made a smart move setting themselves apart from the competition in regards to rates.
Making More Sense of CiT’s Rate Hike:
Like we said CiT is relatively new, having only been on the seen for a few months. And since the release of their savings and CD products earlier this Spring they have been undergoing a fairly extensive marketing campaign.
As with every new online based savings account, you have to kind of take the market place by storm to receive much attention. And as a new savings account issuer, you really have only a few fronts to do this on. You can either come out with a new set of technological features that take advantage of user-requested capabilities like this, or with a new way of rewarding spending like this, or simply by offering the best rate – which is what CiT is doing.
CiT Bank recent rate history:
When CiT first issued this savings account it came with a still respectable 0.85% APY on daily balances of at least $25,000 or more. They then raised this rate to around 0.90% APY earlier this month and finally gave it an extra boost to it’s current level of 1.05% APY – allowing it to rest easily at the top of the charts (gaining them more exposure).
If you’re looking for an FDIC insured liquid savings account and have the required $25k in cash, then this is the way to go simply because you’ll be garnering the most in returns. However, like all money market and online savings accounts, the interest rate is variable and liable to change at anytime. Many new banks, or banks with a new online presence, come out of the gates sprinting with an enticing APY only to drop it once they’ve shored up enough new accounts. So I guess we’ll have to wait and see if CiT can maintain these attractive rate levels.
Today’s national average for money market accounts sits at just 0.50% APY on accounts with no minimum balance restrictions and just 0.66 % APY on balances of $25k or greater – making CiT’s offer close to double the national average.