Have you been frustrated by how very little you get in return for keeping your money in the bank? You’re not alone. Even though interest rates are beginning to rise, most of us still get next to nothing on our bank savings accounts. (According to the FDIC, the national average return on typical savings account is a measly 0.1 percent!)
But you can do a lot better. CIT Bank is offering 2.40 percent (current as of publication date), nearly 25 times higher than the national average.
CIT Bank, part of CIT Group, is a leading commercial finance company that is now offering online consumer banking. The company has a long track record of helping to drive innovation in lending to small- and medium-size businesses, especially retail, energy, health care, transportation and technology companies.
“Now CIT Bank is putting this experience to work for you,” the company says.
Regular deposits and higher earnings
Here’s how it works: Open a tiered interest rate account with a $100 minimum deposit and receive upper-tier interest as an introductory offer. You can keep earning the introductory rate by either maintaining a minimum balance of $25,000 or making a monthly deposit of $100 or more. There are no account-opening or maintenance fees.
Even if you start with just $100 and save at the minimum rate, the higher interest rate is worth hundreds of dollars over course of a few years. (You can plug in different numbers on this handy compound interest calculator to see how it plays out with different balances and deposits.)
But don’t stop there. If you have some money in checking or savings that isn’t earning for you and you don’t need to have instant access to it — or if you want to move some money from the stock market to a safer investment — consider some other FDIC-insured savings options from CIT Bank.
Other safe ways to grow savings
Often described as a hybrid between a checking account and savings account, a money market account generally pays more interest than a regular savings account but limits access to your funds. CIT offers a money market account with these handy features:
- Minimum deposit of just $100.
- Six transfers or withdrawals per statement cycle.
- No account-opening or monthly service fees.
- People Pay transactions — a free service that allows you to send money from your money market account to almost anyone with an email address or mobile phone number.
If you can afford to tie up your money for at least six months in a certificate of deposit, this is another FDIC-insured way to make more interest than a typical savings account. CIT offers these features on CDs:
- Terms ranging from six months to five years.
- Minimum deposit of $1,000.
- No account-opening or maintenance fees.
Interest rates on CDs vary depending on your needs. You can also choose from no-penalty CDs that let you withdraw your money penalty-free before the term is up, high-yield savings accounts or jumbo accounts that pay higher rates on larger deposits.
Different accounts for different goals
Why, you may wonder, do you need more than one savings account?
“Setting up in individual savings accounts for short- and long-term savings goals makes smart sense because the reasons for savings vary,” CIT Bank says. “Are you saving for a house, creating an emergency fund or putting money aside for your kid’s college tuition? Keeping accounts separate makes it easier to track savings growth. When you tap your funds, you won’t derail other savings goals.”
As an online bank customer, you won’t have bank branches to visit, nor any CIT Bank ATMs, nor a CIT Bank checking account.
Instead you can manage your accounts from your computer — view and download statements and account activity, schedule and make transfers to and from other banks, schedule and make transfers between CIT Bank accounts, create banking reports, open new accounts, receive and manage account alerts and send secure messages.
CIT Bank’s mobile app lets you check account balances and transaction history, transfer money between CIT Bank accounts and, if you’re a high-yield savings customer, deposit checks.
You can also use the bank’s automated telephone banking system or call its customer service center.
The easiest way make deposits to your new CIT Bank account is to transfer funds electronically from your other bank accounts. You can also mail a check or wire the money. Similar procedures apply to withdrawals, but some accounts have rules about how often you may tap in electronically.
What’s your impression of or experience with online banks? Share with us in comments below or on our Facebook page.
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