Over the last couple weeks, the winners in the CD rate of the week search have been dominated by credit unions. However, most of these candidates shared a common pattern: they were small, served a unique and limited population, and generally not available outside of one given state. In terms of traditional banks, however, no candidates were really coming forward with anything above a 1 percent rate of return.
However, CIT Bank stands out among the bank crowd with a modest 1.2 percent rate of return on a 3-year CD offering currently available and a 1.6 percent rate of return on a 5-year CD option. Even the 2-year option is still slightly above the 1 percent mark paying customers with a 1.09 percent rate instead. To make the return better, customers have no fees to worry about with CIT banking products, including CDs and general saving accounts. This is a nice alternative from the usual bank approach these days of adding a fee to just about everything, especially below minimum balance levels.
CIT Bank, which shouldn’t be confused with Citigroup, has been around for at least a century, first started by a fellow named Henry Ittleson. Today’s abbreviated name was originally referred to as Commercial Investment Trust with an initial focus on commercial customers. In modern times the Bank eventually began to open up to personal banking as well. Among the many financing deals CIT has been involved with, one business loan the institution provided helped fund the personal purchasing of Studebaker cars. The move opened the door for banks to enter into auto financing.
Like all banks, CIT deposits are federally insured up to $250,000 per account. However, unlike traditional banks, CIT is entirely an online, Internet-based operation, at least for personal banking customers. This streamlined approach is how CIT is then able to offer higher paying CD rates, similar to the ING Direct model from a few years ago.