CIT Bank Review: 11-Month No Penalty CD 2.05% APY, 18-Month CD 2.50% APY, Money Market 1.85% APY
Rates updated 9/11/18, No-Penalty CD now at 2.05% APY. CIT Bank (not to be confused with Citi Bank) is an online-only bank with a multi-year history of competitive rates. They don’t offer a checking account and instead focus on a variety of savings and CD products with high interest rates. Here are the highlights:
11-Month No-Penalty CD at 2.05% APY with $1,000 minimum to open. 11-month CD keeps a fixed rate, but no withdrawal penalty seven days or later after funds have been received. This means that your interest rate will never go down, but you can still move out if interest rates go up. (If you have an existing No Penalty CD that you want to close and open up a new one, please see my instructions below.)
Money Market Account at 1.85% APY, currently available on all tiers ($0+) with no max. $100 minimum to open, but no minimum balance requirement. Up to 6 withdrawals per month.
Each of these types of account has their pros and cons. The No-Penalty CD has a rate that can’t go down, but also has a $1,000 minimum balance. The 18-month CD has a higher rate, but significant penalties if you make an early withdrawal. The Money Market rate could rise or drop, and also has more flexibility as you can easily make more deposits and also make 6 withdrawals every month.
New customer? Opening process overview. Here’s my review of the opening process if you are a new customer.
The application process was completely online. You provide the usual personal information.
You must submit to a credit check, but in my experience it was a “soft” pull which did not harm my credit. None of my various credit monitoring services showed it was a hard pull.
You may fund via (1) electronic ACH transfer, (2) wire transfer, (3) mobile check deposit via CIT Bank mobile app (iOS and Android), and (4) mailing in a paper check. There was no option for credit card funding. I picked online ACH funding and you need to provide routing and account numbers, followed by manual verification via micro-deposits after a day or two. There was no instant linking option via login information.
After deposit verification, then your funding will go through.
You have successfully verified your external account. Please allow up to 5 business days for your funds to appear in your CIT Bank account.
No further action is required for this account. Thank you!
Existing savings or money market customer? Check your rate. If you already have an existing High Yield Savings account, it may remain at a lower interest rate than this money market account. If so, take a minute and upgrade yourself to the better interest rate. Click on “Open an Account” here, then “I have a CIT Bank account”, and then login with your username/password. You can do everything online and even fund your new Money Market account with an instant transfer from your existing Premier High Yield Savings. I wish I didn’t have to do this, but at least it literally only took a minute to complete.
How to transfer your money from an existing No Penalty CD into an new, higher-rate No Penalty CD (or any other new account). Let’s say you opened up a No Penalty CD at 1.55% APY or 1.85% APY, but then the rate for a new CD has risen to 2.05% APY. You have the option of moving the funds (with no penalty of course) over to a new CD with a new 11-month holding period. I just did this, and here’s the easiest way to do so:
After signing in, go through the opening process but choose to fund via “Mail in Check”. Your personal details should be filled in already to save time. Again, I did not observe any hard credit check. This will get you access to your new account number for the new No Penalty CD on the final “Congrats! Your account has been opened” page. Save/print this new account number!
Call CIT Bank on the phone at 855-462-2652, open M-F 8a-9p ET, Sat 9a-5p ET, Sun 11a-4p ET. Press “0” for operator. Tell them you opened up a new No Penalty CD and you wish to fund it by closing out your old No Penalty CD. They will verify your identity, ask for the new account number, and complete the transfer instructions while you are on the phone. My customer service rep was pleasant and helpful. I timed my call at under 8 minutes from start to end.
That’s it. The phone rep told me the entire process should take 1-3 business days to complete. Your new accounts will show up online. You can have the entire previous balance (including accrued interest) moved over, or another amount.
It would be nice if you could do this all online, but I don’t see an option to close the CD early online. Let me know if you know how.
User interface. While the front-facing website is pretty slick, after you login the backend is run by Fidelity National Information Services (subdomain ibanking-services.com). This is a popular backend software system used by many smaller banks who don’t want to create their own software from scratch. As of 3/3/18, the user interface was upgraded to be look more appealing and be more user-friendly. Two-factor authentication is available using voice or SMS.
There is also an app available (iOS/Android) provided by the same company. It is similarly functional and includes mobile check deposit. Here are some screenshots:
Bottom line. CIT Bank is a lean bank offering targeted products for folks looking to get higher interest rates on their cash balances. They don’t do physical bank branches, checking accounts, or fancy apps. However, I have been pleasantly satisfied with their customer service on my accounts with them. Their most compelling products are their Money Market accounts, 11-month No Penalty CD, and usually they have a top rate on one of their Term CDs. The No Penalty CD is unique in that you are always able to move out to a higher rate, even within CIT bank itself.