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When I think about banking products, I don’t typically think of them as being “cutting edge.” If a bank wants to compete for my business, they have to offer either the best rates or excellent customer service. I mean, there are only so many ways to innovate in those areas, right?
Well, that is about to change.
We’ve been fans of CIT Bank for quite a while. They’ve offered some of the best online savings accounts, money markets, and CDs for the last several years.
With that said, over the last few months, I was a bit disappointed to see rates on their Premier High Yield Savings Account not keeping up with other rate increases. Little did I know that they were working on something even better.
Last week, CIT Bank unveiled its brand new Savings Builder account…and I think it’s an absolutely awesome product. Not only does the account provide one of the highest rates of any savings account on the market, it comes with an excellent, and – dare I say – innovative way to encourage users to save. Let’s take a look.
At a Glance – CIT Bank Savings Builder
- 2.45% APY on all balances over $25,000
- 2.45% APY on ALL balances with a monthly deposit of at least $100
- 1.14%* APY on balances under $25,000
- Minimum opening deposit of $100
- No opening or monthly servicing fees
- No online transfer fees (ACH)
(Current as of January 3rd, 2019)
What is the CIT Bank Savings Builder?
As you can see above, CIT Bank’s Savings Builder account is an online savings account with a tiered rate structure. The tiers are easy to understand, and – in my opinion – easy to achieve.
At 2.45% APY, the top tier provides one of the best savings account rates on the market. While keeping a balance of $25,000 may be difficult for some, CIT makes it easy to earn the tier boost. Simply make a deposit of at least $100 each month prior to the “Evaluation Day” and you’re golden. (Editor’s note: Evaluation Day is considered the fourth business day prior to the end of the month.)
Additionally, every account starts on the higher tier. You’re first Evaluation Day doesn’t happen until your account has been open for a full month. So, if you open the account on October 15th, you’ll have until almost the end of November to make the next $100 deposit.
When I had the chance to meet with CIT Bank representatives at a business conference a few weeks back, I asked them, “What’s the catch?” That’s the thing – there is none. Save $100 a month and keep getting a great rate as long as you do. There’s nothing else to it.
What I Love About the Savings Builder Account
In general, the thing I like most about stashing your money in a savings account is that – to spend the money – you have to do it deliberately. Once you make the decision to tuck it away, it takes a conscious effort to yank it out and use it on something else. In many cases, that little bit of awareness is all it takes to help you save more and spend less.
Seriously, it’s a simple trick…but it works. By rewarding those who save $100 a month with a significantly higher interest rate, CIT Bank is actually encouraging people to build better financial habits. In fact, they are so serious about it that they’ll even send you an automated reminder if you haven’t made your deposit by the middle of the month. How could I not be on board with that?
Of course, the interest rate is fantastic as well. At 2.45% APY, the CIT Bank Savings Builder offers one of the top rates around. But, here’s what I absolutely love about it: While the rate is tiered, the barrier to entry is minimal. In fact, I think the $100 savings requirement per month is the perfect number. It’s a large enough incentive to motivate savings while still being low enough that most people can accomplish it if they try.
Additionally, I like that you continue to earn the rate even if you have to take money out of the account. For instance, if you make the required monthly deposit of $100, you can turn around and transfer the money out of the account while still earning the higher rate. It’s the deposit that counts. As long as you make the monthly deposit, you’re good to go.
While I wouldn’t recommend transferring money often, it does allow for some flexibility. Again, the account is encouraging you to be more deliberate with the way you save and spend. Every little step helps.
Where the Account Falls Short
Honestly, there isn’t much about this account that I don’t like. When I first saw the numbers, the top tier balance requirement of $25K made me bristle. However, that uneasy feeling was quickly offset the moment I saw you could hit the tier boost simply by making a $100 deposit once a month. In fact, I actually like that part even more!
If I have to pick something I don’t like, I guess it’s that you’ll be charged a $10 fee each time you make outgoing wire transfers. Of course, you can do online transfers (ACH transfers) for free, so I’m not sure why you’d want to use a wire transfer anyway.
How to Use the Savings Builder Account
Want to know the best ways to use the new CIT Bank Savings Builder? Here are some of my favorites!
Habit building – If you’ve struggled to save money in the past, the Savings Builder account is a great way to help you get into the habit of saving. Simply set it up so you make automatic deposits, and start building those good savings habits.
Emergency fund – We all know how unexpected events can crush your budget. That’s why an emergency fund is one of the most important tools you can have in your financial toolbox. Online savings accounts are a great place to stash this cash, keeping it separate from your general funds yet still highly accessible when you need it.
Travel fund – If you love to travel, or would love to travel if you had the money, prepare financially for your next trip by starting a vacation fund. Like with an eFund, an online account like the Savings Builder provides the perfect spot to keep your money separate yet accessible. Plus, the 2.45% APY means your money won’t be just sitting there, it will actually be growing.
Long-term savings goals – Maybe you’re trying to save for a new house, a new car, or another long-term savings goal. One of the best ways you can prioritize that savings is to save that money in a separate account. That way, you can see exactly how much you have saved toward your goal. Plus, since it’s fun to watch it grow, you’ll likely be motivated to save even more.
CIT Bank Savings Builder: The Verdict
If you’re going to reward people for saving more money, I’m all in.
I don’t typically get this excited over talking about savings accounts, but I really think the CIT Bank Savings Builder is something special. In fact, I think it’s the best new savings account I’ve seen in a long time.
Not only does it offer a great rate (2.45% APY) which helps your money grow faster, the tiered structure and easy barrier to entry provide an excellent incentive to actually save even more. It’s a win-win that is hard to ignore.
In my mind, the CIT Bank Savings Builder is the perfect savings vehicle for things like an emergency fund, your travel savings, and for stashing the down payment for a house. If you’ve got a long-term savings goal you’re trying to meet, the CIT Bank Savings Builder definitely deserves your consideration.
*1.14% APY assumes the account is opened on the 15th day of the month and no qualifying deposits of $100 are made following account opening. Actual APY may be greater or less depending on the date the account is opened.
**Please see CIT Bank website for details and disclosures.