This post is was originally published on Investor Junkie

Are you sick and tired of paying high fees for banking services? How about receiving next-to-no interest on your online savings accounts? CIT Bank is an online banking solution designed to address these complaints. It offers some of the highest-paying interest rates on both savings accounts and certificates of deposit (CDs) available on the web. And what’s more, there are no account maintenance fees for CIT Bank’s banking products.

What Is CIT Bank?

Now, first things first. CIT Bank is not Citibank. (Yes, it is a bit confusing.) It’s not related to Citigroup at all. Rather, CIT stands for “Commercial Investment Trust” and has its roots in a company founded in 1908.

Based in Pasadena, Calif., CIT Bank’s parent company, CIT, has more than $50 billion in assets, and CIT Bank itself has over $40 billion in assets and $30 billion in deposits. In addition to online banking, CIT Bank also offers business services for small businesses, as well as a wide range of home mortgage products.

CIT Bank Features

Minimum Deposit $100
Account Fees None
Mobile App Yes — Apple iOS and Google Android
Website Access Yes
Promotions None

How CIT Bank Works

CIT Bank offers a high-yield savings account — the Premier High Yield Savings account — and several different CD products, some of them incredibly innovative. It also offers custodial accounts.

But CIT Bank does not offer checking accounts, auto loans, credit cards or IRAs. So CIT Bank functions basically as an online savings bank.

Online Banking

CIT Bank provides real-time access. You can manage your accounts online. You can view and download statements and make transfers from other banks, as well as between other accounts you have with CIT Bank.

Mobile Banking

If you prefer, you can manage your accounts with a mobile app. You can check your account balances and transaction history, transfer money and deposit checks. The app is available on Google Play and the App Store.

CIT Bank Signup

You can open an account on CIT Bank’s website. You will be asked to provide your Social Security number, your current bank routing and account numbers (as the source account for funding your CIT Bank account), and the name and ID numbers for any joint account holders or beneficiaries of the account.

Funding Your Account(s)

This can be accomplished by one of three methods:

  • Electronic funds transfer
  • By check mailed to CIT Bank’s home office
  • Wire transfers

Funds made by electronic transfer are available in five business days, whereas if you mail in a check, it will take 10 days.

Transaction Limits

There are no limits on the number of payments made directly to you or transfers to other accounts, if the transfer or withdrawal is initiated by mail.

Withdrawals by phone are also unlimited, but only if you are requesting that a check be mailed to you. All other types of transfers or withdrawals initiated by phone are limited to six per statement cycle. To withdraw funds from CIT Bank, you need to contact customer service by either phone or mail, rather than initiating a withdrawal or transfer online.

Interest Compounding

Interest on all banking products is compounded daily and credited to your account monthly.

Customer Service

Available 24 hours a day, seven days a week for both Online Banking and Mobile Banking. The bank can be contacted by email or by automated telephone banking. However, in this day and age, it’s worth noting that CIT Bank doesn’t have much of a social media presence. So you can’t expect to send a message via Facebook to solve any customer service-related issues you may have.

CIT Bank Calculators

The bank offers several different calculators to help you save money, prepare for retirement and even manage debt. Calculators are offered for CD laddering, mortgage payoff, emergency savings, college savings, retirement planning, traditional and Roth IRAs and several others.

Account Protection

All account balances are FDIC insured for up to $250,000 per depositor.

Bank Fees

This is the really good part. CIT Bank charges no account fees of any sort, and many of the fees typically associated with banking don’t even exist here. The only fee the bank charges is a $10 per wire transfer fee on outgoing wire transfers, and then only for accounts that have an average daily balance of less than $25,000.

CIT Bank Savings Products and Rates

CIT Bank offers a high-yield savings account and several CD products. The specific features of each product, as well as current interest rates (as of November 23, 2017), are as follows:

Premier High Yield Savings

Minimum opening deposit: $100
Account fees: None
Available for: Regular and custodial accounts (but not IRAs)
Current rates:

  • Balances of $1 to $250,000, 1.35% Annual Percentage Yield (APY)
  • Balances of over $250,000, 1.30% APY

Term CDs

Minimum opening deposit: $1,000
Available for: Regular and custodial accounts (but not IRAs)
Terms: Six months to five years
Current rates:

  • 6-month CD: 0.72% APY
  • 1-year CD: 1.32% APY
  • 13-month CD: 1.48% APY
  • 2-year CD: 1.40% APY
  • 3-year CD: 1.30% APY
  • 4-year CD: 1.50% APY
  • 5-year CD: 1.70% APY

No-Penalty CDs

Special feature of this CD: Early withdrawal advantage. You can access your funds early with this CD, subject to certain limitations. No withdrawals are permitted during the first six days after receipt of funds by the bank. But you can withdraw the total balance, including interest earned, without penalty, beginning seven days after the funds have been received.

Minimum opening deposit: $1,000
Available for: Regular and custodial accounts (but not IRAs)
Term: 11 months
Current rates: 1.55% APY

RampUP CDs

Flexible long-term CD designed to protect against market fluctuations.

Special feature of this CD: RampUP CD rate advantage. You have the option to adjust your rate once during the term of the CD, if rates increase. If they fall, you can stay with the original APY.

Minimum opening deposit: $25,000 to $50,000
Available for: Regular and custodial accounts (but not IRAs)
Terms: Three or four years
Current rates:

  • 3-year CD: 1.20% APY — Minimum opening deposit: $25,000
  • 4-year CD: 1.38% APY — Minimum opening deposit: $50,000

RampUP Plus CDs

Special feature of this CD: CD rate advantage. You have the option to adjust your rate once during the term of the CD should rates increase. But it also gives you the option to increase the size of your deposit during the term of your CD. Even if rates go down, you can still add to your deposit with interest at the higher initial rate.

Minimum opening deposit: $25,000
Available for: Regular and custodial accounts (but not IRAs)
Terms: 1 or 2 years
Current rates:

  • 1-year CD: 1.26% APY
  • 2-year CD: 1.27% APY

Jumbo CDs

Minimum opening deposit: $100,000
Available for: Regular and custodial accounts (but not IRAs)
Terms: Two, three, four and five years
Current rates:

  • 2-year CD: 1.45% APY
  • 3-year CD: 1.40% APY
  • 4-year CD: 1.60% APY
  • 5-year CD: 1.75% APY

There are limits on the interest rate adjustment on both the RampUP and RampUP Plus CDs, as follows:

If the new APY is: Initial APY New Published APY New Adjusted APY for remainder of term
Less than twice the intial APY and rate cap 2.00% 3.75% 3.95%
Less than twice the initial APY and higher than the rate cap 2.00% 3.98% 3.95%
Equal to twice the initial APY 2.00% 4.00% 3.95%
Greater than twice the initial APY 2.00% 4.20% 3.95%

CIT Bank Early Withdrawal Penalties on CDs

All banks assess early withdrawal penalties on CDs, and that includes CIT Bank. The early withdrawal penalty policy is as follows:

  • Terms up to one year — three months’ interest on the amount withdrawn
  • Terms more than one year up to three years — six months’ interest on the amount withdrawn
  • Terms more than three years — 12 months’ interest on the amount withdrawn

CIT Bank Custodial Accounts

You can set up a custodial account, which will be held in the minor’s name, with you as the account custodian. You can remain on the account until the minor turns 18 (or as old as 25 in some jurisdictions), at which time the former minor takes control of the account.

Any of CIT Bank’s products can be used in a custodial account.

CIT Bank Home Loans

CIT Bank offers home mortgages for its customers, including both fixed-rate and adjustable-rate mortgages, as well as Jumbo loans, cash out refinances and interest only loans. They can provide fixed-rate mortgages with down payments as low as 3% of the purchase price.

Fixed rate mortgages offer the following rates as of November 23, 2017:

Fixed-Rate Mortgage Interest Rate APR Points
Conforming 30 Year 3.725% 3.760% 0.010%
Conforming 25 Year 3.725% 3.766% 0.010%
Conforming 20 Year 3.600% 3.672% 0.217%
Conforming 15 Year 3.175% 3.253% 0.118%
Conforming 10 Year 3.075% 3.182% 0.087%
Jumbo 30 Year 3.800% 3.815% 0.100%
Jumbo 15 Year 3.250% 3.277% 0.100%

CIT Bank Small Business Services

In addition to personal banking services, CIT Bank also offers programs for small businesses.

Business Loans

These are offered through Direct Capital, which is a division of CIT Bank, N.A. They can be used for marketing, purchasing inventory, equipment and tech upgrades, cash flow supplements and staffing.

You can borrow up to $150,000, with terms of between six and 18 months. The bank is currently offering business loan rates as low as 9.9% APR.

Equipment Financing

Also provided through Direct Capital, you can obtain financing for up to $250,000 without financials or up to $1 million with financials. Terms range from 12 to 72 months, with interest rates currently as low as 5.49% APR.

Equipment financing can be used to acquire computer hardware and software, POS terminals, restaurant equipment, construction equipment, commercial vehicles and capital equipment.

CIT Bank Pros and Cons

Pros

  • High-Paying Interest — CIT Bank pays some of the highest interest rates available and certainly higher than what you can get at most local banks.
  • No-Fee Banking — Not only does CIT Bank not charge account maintenance fees, but it also skips many of the other fees typical in banking.
  • Flexible CDs — The No-Penalty CD allows penalty-free withdrawals after just seven days. And the RampUP CD allows you to make a one-time upward rate adjustment if rates increase after you open the certificate.
  • Small-Business Friendly — If you operate a small business, the Business Loan and Equipment Financing programs could help you to grow your business.

Cons

  • No Checking Account — No checking account is offered, although this is not unusual among online banks.
  • No Loans or Cards — No auto loans, credit cards or debit cards are available.
  • No IRA Options — No IRA accounts are offered.

Summary

If you like high interest rates on your savings and hate banking fees, then CIT Bank is a great choice. It’s even better if you are a small depositor looking for high rates, since you can earn as much as 1.35% APY through the Premier High Yield Savings account.

Small business owners may also be interested in this platform. That’s because they can obtain financing to expand their businesses, as well as a bank where they can earn high rates of return on their savings.

But CIT Bank is not a full-service bank. They don’t offer checking accounts, credit or debit cards, auto loans or IRAs. For the average investor, CIT Bank will be strictly a high-yield savings bank. Most other banking functions will have to be handled through another banking platform such as Ally Bank or Capital One 360.

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