CIT Bank – What They Promise, What They Deliver

by Neal Frankle, CFP ®

If you’ve looked at CD rates lately, you’re probably very disappointed and frustrated. I know many of the people I speak with feel that way. That’s why I decided to write this CIT Bank review.

You see, in an effort to earn higher rates on deposits, you might be looking online for better alternatives. And CIT is one online bank you might be considering. But can an online bank like CIT be trusted? Are they secure? Are they worth the extra interest they pay? Do they deploy any special tricks you need to be aware of? Those are the questions I’m going to address in this review.

Who is CIT Group?

CIT Group was founded in 1908 and is traded on the NYSE (CIT). When they began doing business over a hundred years ago they focused on making business loans and not much has changed since then. According to their website, they are a Fortune 500 company and they are on the Small Business Administration “SBA” Preferred Lender list. They have over one million business clients in over 30 industries. The online CIT Bank is owned by CIT Group.


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Like the other online banks I’ve written about, CIT is FDIC insured. That means that each depositor is insured up to $250,000. There are ways to increase your coverage but let’s just assume that the most you’ll keep in any bank – including an online institution is $250,000. This is going to be important later on so keep this number in mind.

As far as safety goes, their website is locked down pretty tight. The have taken great pains to make sure you are the only one who can login to your accounts. They have set up some sophisticated anti-virus programs, firewalls and encryption to keep your money safe. This is pretty standard for all banks these days so I didn’t get that excited to learn about it. And since hackers are pretty smart, there are no guarantees when it comes to online or brick and mortar banks. Just the same, it’s nice to know they take security very seriously.

Solvency

In 2009 CIT Group went through a Chapter 11 bankruptcy and emerged from that process within 40 days. Pretty quick. The bank was not part of that bankruptcy. But the FDIC had a cease-and-desist order in place from July 2009 through April 2011 keeping the bank from accepting new deposits during that time.

Of course that hurt the profitability of the bank and they did post a loss in the third quarter of 2011 but it did beat Wall Street estimates. Currently the bank has a four-star rating out of five from Bankrate’s Safe & Sound Star Ratings which is very good.

While I don’t think the bankruptcy is a deal breaker, I do think it’s very important to keep your deposit within the $250,000 FDIC guarantee limit if you decide to do business with them. But that goes for any bank these days. You just never know.

Service

Of course you can access your account information and transact 24/7 by phone or web. If you want to speak with a human being they also offer service 7 days a week. You can call until 9:00 p.m. (Eastern) during the week, 5:00 p.m. Saturday and 4:00 p.m. on Sunday. That’s convenient enough for most of us.

I called customer service and it was really refreshing. A real live person picked up the phone almost immediately and answered all my questions fully and completely. Ahhhhhhh……….

CIT Bank Fees

This is where things get really sweet. There are:

  • No monthly maintenance fees.
  • No incoming wire transfer fees.
  • No outgoing wire transfer fees if you have a daily balance of $25,000 or more.
  • No online transfer fees.

This is one time when you love to hear “no” from someone you are doing business with.

You can either let the interest compound or you can call the service center to get a check sent to you. Alternatively, you can have the interest sent to another institution (or to your home) automatically every month.

30 days before your CD matures, CIT will email you to let you know. If they don’t hear from you by email or phone 10 days prior to maturity they’ll renew your CD for the same term at the prevailing interest rate. They still provide another 10 day grace period for you to change your mind so you have plenty of access and time to shop rates elsewhere if you like.

Products

CIT offers a nice menu of savings options. In fact, this is where they really shine.

  • You can open an account with as little as $1,000 for a CD or $100 for a savings account. Interest compounds daily and they don’t charge any fees no matter how large or small your account is as I said above.
  • Some of the CDs even allow you to raise your rate and/or increase your deposit even after you establish the account. That’s flexibility and really valuable if you think interest rates are about to rise.
  • You can buy CDs with a 6 month, 1, 2 or 3 year maturity. Or, if you want to have more liquidity, use their CIT Savings account. This is always liquid and this is the only savings account I know of that still pays a decent return.

CIT Bank consistently has the some of the highest rates on FDIC insured CDs available. They compound interest daily and they credit your account monthly.

What are the penalties for early withdrawal?

Obviously there are no early withdrawal penalties if you take money out of your savings account. This is not a time deposit. But there are penalties for early withdrawals from CDs. Here is the schedule of penalties:

  • 3 months interest for the amount you withdraw from your account if it has an original maturity of one year or less.
  • 6 months interest for the amount your withdraw if your account has an original maturity of more than a year but less than three year.
  • 12 months interest for the amount you withdraw if the account has an original maturity of more than three years.

How to open a CIT account

The account opening process is very simple. All you need is your Social Security number, driver’s license and a check or bank account number to electronically transfer money into your new CIT Bank account.

It will take you about 10 minutes to open account. Here are the steps:

  1. Select what kind of account you’d like to open. They make this very easy to do because the show the rates and the minimum requirement on the menu. Couldn’t be easier. (See below.)
  2. Complete your application.
  3. Review and accept the terms and conditions. (Does anybody read these things….really?)
  4. Set up a few security questions.
  5. Fund the new account.

How to fund your account.

You can transfer money into CIT through an ACH transfer. Their account opening process walks you through this so you don’t have to be an Einstein to figure this out. They make it very easy. All you need to do this is a check from your other account.

You can also wire the money into your account or send them a check. Either way, all the information is on the site and this is a very straight-forward process. Once you open your account you’ll have 24/7 online access to review your account, view statements and see the recent activity.

Are there any restrictions on savings account transactions?

You can make up to six transactions per statement cycle. That’s a limit that is imposed by the Feds – not CIT. Sorry. But the good news is you can link up to 3 outside accounts to your savings account and you can even set up automatic deposits from your employer, pension or even Social Security. This feature will save you time and hassle.

The site says they place a hold on deposits for 5 to 10 days. This seems standard and appropriate. I don’t have a problem with this.

What bothers me about CIT Bank

While I really liked the service I got on the phone, there are a few things that disturbed me when I did my research. Some minor and some not so minor.

First, some petty stuff. The website doesn’t have a search function. That might be a small issue but it bugs me. It was a little harder to navigate the site because of that oversight and I don’t have that kind of time to waste. Again, not a deal breaker but I just needed to get that off my chest. Thanks for listening.

The bank does not take retirement or trust accounts. You can only open an account as an individual, open a joint account or a TOD (Transfer of Death) account. I have no idea why these restrictions are in place but they are. That limits your ability to really make use of this institution. And if you want cash, better ask your Uncle Ned for some green because this bank has no ATM network. Bummer.

Why most people love CIT Bank

The rates these people offer are excellent compared to the competition. Not only that, remember that they offer a CD that allows you to both add additional funds and adjust your interest rate (twice) in case rates go up. That sounds like a winner to me.

If you are looking for great rates & FDIC insurance CIT might be for you. If you compare CIT to other banks, it certainly has some impressive advantages.

Wealth Pilgrim Bottom Line

If you are looking for an easy place to park some CD money and want very attractive rates, this is a good option. If you are looking for a bank to provide more extensive services like checking and investment services, this is not a good fit for you. Likewise if you need to open a CD for a trust or retirement account – CIT is not your bank. Either way, make sure to never go above the FDIC insured levels no matter which bank you work with.

  • Application for a CIT Savings or CD Account

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{ 24 comments… read them below or add one }

Dax July 23, 2013 at 9:33 PM

I opened a savings account recently and no problems. The problem is people are too lazy to follow directions and want the money in the account immediately. If you can follow simple instructions and wait a few days I recommend it. If you can’t do that then it’s not for you.

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Neal Frankle July 25, 2013 at 6:31 AM

That has been my experience as well most of the time.

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Bert June 11, 2013 at 8:18 AM

The bank has been great – best rates AND FREE Wire transfers! Big drawback is lack of Quicken support – having to manually enter my transactions seems outdated. What’s more annoying is they continue to support MS Money-which is now an extinct program. If it weren’t for the Quicken issue, I’d give them 5 stars.

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Chris May 2, 2013 at 1:10 PM

I opened the account online this past Saturday 4/26. Source account received test deposits and I verified it Tuesday. Money was moved to new CIT accounts by yesterday (Wednesday). Submitted a request after work yesterday to allow external transfers, received a response a couple hours later that the request was received and I’d be set up in 1-2 business days. Just got another reply LESS THAN 24 HOURS LATER that I was all set. Logged on and linked up my external accounts already. Again, It’s only been since Saturday 4/26 that I even appled for the accounts online. Not sure what you’re all talking about, but seems pretty quick and efficient to me.

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Neal Frankle May 2, 2013 at 5:09 PM

Chris. Glad you had a good experience. I hear this often actually. I sense they are a very good place to do business with.

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Nick April 23, 2013 at 7:15 PM

I called today with similar issues and told the representative I wanted to speak with a supervisor or manager. She put me on hold for a moment and then said they would return my call. This was at 11AM, and nobody called the rest of the day.

I have a full 250K to deposit. They will be lucky to get 10,000 now, if that. No time for this kind of foolishness and jumping through hoops for a puny 1%.

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Luis March 1, 2013 at 9:33 AM

I do not understand all the above comments on having problems establishing and funding the account.
I opened the account on a Saturday and Tuesday I checked the mini verification deposit and withdrawal at my source bank and it was there. I then went to CIT and followed directions and the next day the money was transferred into my account.
I do admit their web site is not too intuitive and hard to find what you are looking for.

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Michelle February 17, 2013 at 10:58 AM

I wish I had read all of these comments before opening an account with CIT Bank. Prior to opening a CIT savings account I had HSBC. Their online system was so much easier to use. I was astonished any online savings account would not automatically allow you to make incoming and outgoing transfers between banks. How on earth do they expect anyone to fund their account? I called and ran into the same issue where they told me I have to “request” to have that capability added. I was told it would only take a couple of days. It’s been a week now and still nothing. I don’t think the hassle is worth using this bank. I fully intend on closing this account and moving on to one that actually makes the customer’s life easier. Who has time to deal with this nonsense?

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Tom February 7, 2013 at 5:41 AM

Follow up to above:

It’s NOT going easier from here. The first deposit did go through. It took 9 days from when I submitted the application to actually having the money in the CIT account (with multiple steps including waiting intervals and 2 phone calls).

Now I am trying to initiate a second deposit, withdrawing from the same account as the initial withdrawal to set up the account. Unfortunately, they require the same convoluted test depositing system for your second deposit as they did for your first even if it is from the same account. So after another phone call and another waiting period and another input of deposit amounts, I am again stuck. I cannot make the next deposit, I get the warning that some amount has been exceeded; really, a $5000 deposit exceeds some limit? So again, round number 3, I will have to hit the phone and ask what is going on?

Just a warning: DO NOT expect to have a working savings account with transfer in and out privileges within 2 weeks after setting up the account even if you are on top of the process spread out over 10+ days and do the multitudinous steps at the first opportunity.

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Tom January 31, 2013 at 7:40 PM

I am in day 6 of trying to establish my account. The weird test deposits did arrive after 3 business days, and I then I went on the website and verified that. Received the congratulations email that the account is up.

The hitch came next. When I went in to establish the online account, I got locked out and it’s after 9PM EST so I will have to call back tomorrow to get it reset. My mistake was that the initial password I chose had a symbol, and this was OK. When you log in to set up the online account, the password has to be immediately changed, and the next one that you set up next CANNOT have symbols. Put symbols in and you get locked out on the first try to establish the account– no warning, kaput, you can’t proceed.

I hope it goes easier from here– the online system is the lifeline to the account.

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Walter January 14, 2013 at 7:34 PM

I tried to open a savings account and found the processes are very awkward.
It is unnecessarily complicated. The same is also true for Ally bank. Both banks take a few days (up to a couple of weeks) to open an account. I bet most people end up have to call to get clarifications. At the end things are all worked out fine, but the processes are frustrating. Perhaps they can learn a few things from, Bank of Internet, TD Ameritrade Bank, Charles Schwab Bank …..

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Heat Miser December 16, 2012 at 6:13 PM

I have had some of the “learning curve” issues setting up a savings account with CIT as some of the other posters. Since the Costco benefits of my account with Capital One were being discontinued, I was looking for someplace to park some funds at better than average rates and CIT was hard to beat.

You first set-up your log-in/password information for your application and then need to re-do the entire process once you account has been approved. Secure, I guess. A hassle, certainly.

If you ask me, their entire website interface seems kind of antiquated for this day and age.

A few days after the savings account was funded, I received an email stating I could now set-up external transfers. I checked the site and was not able to find any menus or drop downs where I could execute. Well, now a few weeks later I logged in and the transfer menu was visible. I have set-up a few other accounts for transfer purposes and we’ll see how it goes.

CIT seems like it will be an OK institution to park some money you will infrequently need access to, but certainly not an everyday retail bank (granted, that is not what they are).

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Bob December 16, 2012 at 10:00 AM

Update from Bob:
It took two phone calls with a vice-presdient at CitBank to get my account working (I asked to speak to higher authorites when the customer serivce managers couldn’t help me).

He said they’re working on fixing some of the issues I raised. For example, you DO have to create a whole new log in after you already created and completed your initial transfer with the original log in you created. (You wonder how much $ they’re paying their phone support people to deal with what must be a common problem with everyone who sets up an account.)

Yet, not surprisingly, weeks later when I got an email saying my first statement was online, “click here” to see it, I got to a page with yet a different security picture than the one I had arleady chosen. I instead went directly to their website and logged it, which had my correct picture. In spite of this, now that things are working I’m sitcking with them since their rate (at the moment) is better than the others.

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LW November 29, 2012 at 7:02 AM

I had similar experience in setting up/longin of my online account. The image I chose is not used. The first time I went through a series of security questions and then got an “could not load the page” error after submitted them. The second time to set up the login, they did took the user name and password I set the previous time, but prompted me with another set of security questions. After submitted them I got a system error. I then called the service person there and she offered to setup the account for me. I went through with her again. Meanwhile I had two email notes stating that my online account access is locked up since I attempted several times to login and failed, which was actually due to their system errors.
I already sent deposit checks there but I don’t receive any email notification nor normal mail confirmation. After I talked to the service person, she said that she is put my request for me. after a week, I received “CD certificate” that printed on a general printing paper. There is not water mark or anything that prove it from this bank.

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Wanda November 26, 2012 at 3:58 PM

After reading Bob and Don’s experiences, I think I’ll pass on depositing my hard earned savings with some online “bank” that doesn’t even post a tab for transfers. Weird and scary…

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Don November 15, 2012 at 4:24 AM

My experience so far has been the same as Bob’s. Still waiting for a transfer link. And even more annoying, they don’t support Quicken downloads! I guess they’re still waiting to see if Quicken catches on. Looks like I’ll stick with ING and hope Capitol One doesn’t screw them up too.

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Neal Frankle November 15, 2012 at 12:05 PM

Don, just curious, CIT is a savings account and CD marketplace. They don’t have a checking account. You are right that they don’t offer downloads…but why would you need that? If you are looking for checking, have you

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Bob November 13, 2012 at 7:06 AM

Just opened an account for savings. The process got me nervous — when you first sign up you provide securuity questions and answers, you choose a security “image,” ID and password. They do a test transfer from your bank account. This all seemed normal. Then you have to wait a week for a confirmation email (which only came after I called tiwce).

But then when you finally go to log in, there’s a different security “image,” and they ask for news security questions all over again. I called them, worried this was a scam (a different security image than the one I had chosen a week earlier?). They said this was normal. But once it was all set up, I logged in to my “home page,” where it says “to make a transfer, click on the transfer tab.” But there was no transfer tab. I called (now my third call) and they said that you can’t transfer money IN on line until the account is mature. Huh! The person I spoke to was going to put my request in (and she took my transfer over the phone), but their communication does not inspire much confidence. If they can’t get their website right, and don’t tell you when you sign up you’ll have to wait a few weeks to tranfer money in, what else don’t they do right? The rep I spoke to claimed this was all for security purposes, but I think it’s poor management. I’m sticking with them for now, having gotten this far, only bec. of the better interest rate, but Emigrant Direct (slightly lower rate) has been error free for me in the past.

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Neal Frankle November 14, 2012 at 1:42 AM

I will call them to discuss. This is the first time I’ve heard such a problem. Thanks for bringing it up.

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Neal November 15, 2012 at 8:59 AM

I called CIT and what I heard seemed very reasonable to me. First, on the confirmation email – they ask you to check with your old bank to make sure the transactions worked. If you don’t get back to them, they remind you after a few days. You probably didn’t get back to them or didn’t understand that. I know Paypal works the same way.

They also told me that the transfer tab is only available after you call to get it set up. That also seemed reasonable to me. Bottom line – I think these kinds of things reflect a learning curve more than poor management. But I would love to hear about your experience going forward.

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Al November 12, 2012 at 5:31 AM

Will I be able to see the interest posted to my account monthly?? I understand Ally bank posts yearly??

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Neal Frankle November 12, 2012 at 12:53 PM

Yes. The site says yes.

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psc November 4, 2012 at 4:22 PM

thank you for the info. I am looking for a safe place to put my IRA . currently have it in a cd that will mature in Jan. Do you know of any cd options with decent returns that offer a retirement cd. do not want to go into stocks or bonds. Cd info only , if you please.
Thanks for your time, looking forward to hearing from you.
PSC

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Neal Frankle November 4, 2012 at 9:53 PM

This post might be useful to you.

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