CIT Bank Review: Online Savings with a Top Yield

With interest rates still terribly low by historical standards, it seems stocks are the only place to get any type of return. Even the 10-year U.S. Treasury note is yielding less than 3%.

While it is true that interest rates are low, things are slowly changing. The Fed raised rates three times last year and is on track for at least three more this year.

The good news is that savings account rates are increasing as well. There are rates offered by large institutions such as Citibank, Chase, and Wells Fargo that are still very low, require fairly high initial deposits, and often charge a fee if certain deposits aren’t met.

Then there are what’s called high-yield savings accounts. These types of accounts are very different: much better rates, low deposits, and no fees. They are often banks that you have probably never heard of and keep most of their activity online (i.e., no branch offices). One such bank is CIT bank, not to be confused with Citibank. They are two independent companies.

As mentioned above, CIT Bank isn’t associated with Citi. They even have two different stock tickers: CIT Bank = CIT and Citi = C. The CIT ticker actually belongs to CIT Group Inc., which owns CIT Bank.

CIT Bank has been around for quite a while and provides a wide range of services. From their website:

Founded in 1908, CIT (NYSE: CIT) is a financial holding company with approximately $50 billion in assets as of Dec. 31, 2017. Its principal bank subsidiary, CIT Bank, N.A., (Member FDIC, Equal Housing Lender) has approximately $30 billion of deposits and more than $40 billion of assets. CIT provides financing, leasing, and advisory services principally to middle-market companies and small businesses across a wide variety of industries. It also offers products and services to consumers through its Internet bank franchise and a network of retail branches in Southern California, operating as OneWest Bank, a division of CIT Bank, N.A.

In other words, they’re not a fly-by-night operation by any means. You can feel confident your money will be safe with them.

The CIT Bank savings rate is currently 1.55% APY (annual percentage yield) with no fees. The product name is "Premier High Yield Savings." There is an initial $100 deposit required to open an account.

1.55% is far more than the national savings rate of 0.07%, according to the FDIC, as of March 26, 2018.

While CIT Bank states that their savings account interest rate is a tiered account, it doesn’t seem the tiers actually do anything at this point. You’ll get the 1.55% APY whether you are above or below $250,000. Of course, things could change later on and that is stated in the small print.

As mentioned above, there aren’t any monthly fees for maintaining a CIT Bank savings account. The initial deposit is only $100. Also, there are no fees for opening the account. The website does not mention anything about fees if the balance drops below $100. But given they prominently print that there are no fees at the top of the savings account page, it’s a good indication that you won’t need to be concerned if the balance falls below $100.

Security is always a concern with any financial institution, especially one you’ve probably never heard of. CIT Bank takes security very seriously, as it should given all of the federal regulations required of financial intuitions in the U.S.

There are degrees of security across financial institutions. It’s good to see that CIT Bank doesn’t seem to just settle for what is required of it in regards to federal security regulations. On their security page, they discuss in detail the measures the bank takes to ensure customer data is safe.

Some notable features include:

• Antivirus protection of their computers
• 128-bit encryption
• Automatic sign-out

As well, communication with the bank is secure through their message portal. On the same page are links to their policies on privacy and fraud protection.