CIT Bank has been around a long time — over 100 years — but arguably, entered the online banking arena relatively late in the game, launching its own virtual entity just about a year ago. One might think its late arrival to the internet might put them behind other big names in finance, yet, since that brief time, its already upped the ante on a variety of finance products, not to mention a genuine set of top-of-the-line CD rates.
The bank’s trademark certificates of deposit are no exception. There are a total of three online-exclusive CIT CDs available on the market today:
- The Achiever
- The Jumbo
- The Term
Each is loaded with enough benefits and leading interest potential that consumers may find some difficulty finding which one best suits their individual money management needs.
Any CIT CD review would be hard pressed to find enough cons to balance out the pros in this trio of smart investment choices. This is good news for budding investors, who can count on any one of these CDs to give them the treasured combo of high returns with low risk.
CIT Bank CD #1: The Achiever
Essentially a 2-in-1 CD that could just as easily be coined the Super Achiever, it’s the most financially flexible of the CIT Bank CDs.
- Non-fixed APYs. Account holders can temporarily lock into their initial APY but then choose to take advantage of a higher percentage should it become available. With two versions of the Achiever priced competitively above the current FDIC average (as of this writing, 1.08% for the 1-year term, 1.26% for 2 years), stepping up pays off with better returns, without the need to wait for one CD to close before opening another.
- Rate bumping. Like some performance automobile that sees a gain in horsepower through some valuable turbo boosting, CIT also markets the Achiever for its “step-up” option. Now, CIT customers who choose to invest in this CD over its siblings can add on funds to their share accounts once over any time throughout the term. It’s worth it, considering the minimum deposit amount of $25,000 isn’t accessible to many newbie consumers just beginning their foray into investing money.
CIT Bank CD #2: Low Minimum Term CD
The Term CD, fortunately, is the most accessible choice of CIT’s three online certificates of deposit, carrying an affordable $1,000 opening balance to build on. Its no frills, basic nature doesn’t really set it apart from other conventional CDs of its kind; interest compounding and federal insurance are pretty much standard with this one.
However, it’s a low maintenance piece of accounting with few downsides, and the Term compensates with some other strong features.
- Rate/term choice. Consistent in being economical, the Term’s minimum deposit applies for any of its four term options: Choose between 6, 12, 24 or 36 months. The rate tables are nothing to scoff at either, and like the Achiever, annual percentage yields for three out of four CIT Term CDs rise above FDIC standards.
CIT Bank CD #3: Jumbo CD
With small-to-medium sized business owners in mind, the CIT Jumbo CD is aimed at the serious investor and carries a minimum opening fee of $100,000. Aside from the 6-digit dollar figure, there’s not too much difference between the supersized Jumbo and smaller-scale Term CD — though the larger of the two is at its best when partnered CDs of other sizes.
- Climbing the CD ladder. The Jumbo is ideal for laddering and works best as the top “rung” when money previously placed into Achiever and Term CDs matures and is ready for re-investment into a larger investment account. The Jumbo comes in 2- and 3-year options and is likewise federally insured, a definite plus when $250,000 is a very likely sum after the CD reaches maturation.
There are no residual fees for opening or maintaining one of CIT’s online CDs. But, like most other certificates of deposit through a bank or credit union, there are substantial penalties for early withdrawal of funds:
- 3 months interest for CD terms 1 year and less;
- 6 months interest for CD terms greater than 1 year.
There’s also another caveat that sticks out like a sore thumb: A 6-month CD rate of 0.45% APY for the CIT Low Minimum Term CD. Less than half of the competing FDIC average rate of 0.95%, it’s truly a poor offering from CIT compared to the banker’s typically high standards. For the short-term investor, look elsewhere for an interest rate worth your time and money.
Three’s Not a Crowd
The Achiever, Term and Jumbo CDs each have their benefits as standalone savings options. By packaging the certificates together, CIT seems to have taken into account the most common needs of their customers — the novice saver, the big-ticket investor and the customer who desires some combination of both. Interest, when rates are at their most robust, are compounded daily and credited monthly, too, so the benefits are tangible.
But the trio really does work best in tandem. It can’t be denied that the capability to ladder from term to term, rate to rate, puts CIT ahead of the CD curve. It wouldn’t be worth the time if the financier offered just two CD options.
At the same time, CIT might want to consider developing other CD packages to broaden their customer base and their own personal banking choices. As with anything, although CIT provides savings and ladder calculation tools on its website, even the most savvy of consumers who want more choices in the CDs should first consult with a financial adviser before laying down any cash.
Rates are current as of 3/6/2012 and may have changed since this review was posted. Other Terms and Conditions may apply. Please contact the financial institution for the most recent rate updates and to review CD product terms.