CIT Bank Savings Builder vs. Traditional Savings Accounts

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FTC Disclosure: The following piece has been sponsored by CIT Bank. All opinions are our own.

It’s no secret that we love the CIT Bank Savings Builder Account. With a top tier interest rate that consistently ranks among the best available, the Savings Builder account has long held a spot among the best high-yield savings accounts on the market.

If you are new to online banks, however, moving from a traditional bank to an online savings account may feel a bit uncomfortable. So what makes us so sure you will love the CIT Bank Savings Builder Account as much as we do? Let’s take a look at what the Savings Builder Account and traditional savings accounts have to offer so you can decide for yourself.

Comparing CIT Savings Builder to Traditional Savings Accounts

What makes the CIT Bank Savings Builder Account more attractive than a traditional savings account? Let’s start with the interest rate.

At most brick and mortar banks, rates on traditional savings accounts hover between 0.01% and 0.03% APY, regardless of what is happening at the Federal Reserve. That is pretty awful, even during a pandemic. Here is a look at the current rates offered by some major banks on their standard savings accounts:

• Chase: 0.01% APY
• Bank of America: 0.01% APY
• Wells Fargo: 0.01% APY

With a top-tier rate of 1.00% APY, the CIT Bank Savings Builder Account offers a rate 50x higher than these national chains. Prior to the economic downturn caused by the coronavirus pandemic, CIT was even better. While rates at these national chains remained flat, the Savings Builder Account was offering rates above 2.00% APY. Thus, rates on the CIT Savings Builder Account have outpaced rates at these chains for quite a while.

Why does this matter? Here is an example:

Let’s compare $10,000 in a CIT Savings Builder Account with the same amount saved in a Wells Fargo Way2Save account. At Wells Fargo, $10,000 at a rate of 0.01% APY would earn just $1.00 over an entire year. In contrast, the same amount of money in a CIT Savings Builder Account plus the $100 monthly deposit to get the top APY would currently earn $53.38 in interest for the year with a final balance being $11,253.38. So, when it comes to interest rates, there is no debate as to which account is better.

Even more important is how you earn the top-tier rate. One of the things we love most about the CIT Savings Builder is that it actually encourages customers to save. Although you can earn the top-tier rate by keeping a balance of $25,000 or more, you can also earn the rate by adding just a little bit to your savings account each month. Specifically, you will earn 1.00% APY when you make a monthly deposit of just $100 – regardless of your balance. We think that is a wonderful incentive, and we highly support this mission.

Finally, let’s talk about fees. At many banks, standard savings accounts require you to carry a minimum balance or be slapped with a service charge. For example, the Wells Fargo Way2Save charges a $5 monthly service fee unless you meet certain requirements. 

On the other hand, the CIT Bank Savings Builder Account keeps things simple. There are no monthly maintenance fees or minimum balance requirements, so you don’t have to worry about jumping through hoops to avoid fees. Savings accounts at CIT Bank are also insured by the FDIC, so you don’t need to worry about that either. Again, we’ll side with the Savings Builder over a traditional savings account. 

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Disadvantages of the CIT Savings Builder

Although we think the CIT Savings Builder Account is an excellent option, it doesn’t come without issues.

The biggest problem with the account is that CIT Bank does not have physical branch locations for you to visit. Clearly, this isn’t as big of a drawback as it used to be. These days, many people bank entirely online, so this seems far more normal now than it did a decade ago. However, if you are still a traditionalist who loves banking in person, this account may not be right for you.

Because there are no physical locations available, getting access to your money may also be delayed. You can’t just walk into a branch and make a withdrawal. You have to wait for your money to be transferred to another account. This typically happens within 24 hours, but it is worth noting.

Personally, I see this as more of a benefit than a detriment. Savings accounts should not be used as spending accounts anyway. This makes a Savings Builder Account the perfect place to store money you want to use for a special purpose. You have to make a conscious decision to move it, and you’ll need to plan ahead to spend it. This barrier limits the chance that you’ll make an impulse decision or accidentally spend the money on something that it was not intended to be used for.

If you do need faster access to your CIT deposits, adding eChecking gets you a debit card. This provides access to ATMs and CashBack functionality for instant funds.

Pros and Cons of a CIT Savings Builder Account

Pros	Cons
Extremely competitive top-tier rate (1.00% APY)	No physical branches
Encourages savings with higher rates for $100 monthly deposit	Standard access to funds is via ACH transfer, wire transfer, or check
No minimum balance requirements to maintain account or avoid fees	Requires opening an eChecking account to obtain ATM debit card
No online transfer fees	Customer service has extended hours but is not 24/7
No account opening fees
U.S.-based customer service
FDIC-insured

Best Ways to Use a Savings Builder Account

Like other savings accounts, we do not recommend using the CIT Bank Savings Builder to meet your retirement goals or long-term savings needs. In general, savings accounts simply don’t earn enough interest for that. 

With that said, using a savings account certainly has its place. We love using our Savings Builder account to meet short-term savings goals. These are financial goals we set in which we may need the money within a year. Here are some examples:

Emergency Fund – A Savings Builder Account is the perfect place to store your emergency fund. With this account, you can keep your emergency fund separate from your regular spending account while earning higher interest. This protects your emergency fund from accidentally being spent, plus you won’t be tempted to use it on non-emergencies. Even better, if you do need the money, you can get access to your funds within a few hours by making a transfer or by ATM via your eChecking debit card (separate account).

Travel Fund – Keeping your travel savings in a Savings Builder Account is also an excellent choice. Again, your money will earn a high yield interest rate while being kept separate from your regular spending account. Consider using the “sinking fund” method to save what you need, and enjoy watching your stash grow over time.

Other Short-Term Savings Goals – Want to save for a new car? Maybe you want to replace the floors in your kitchen or have been eyeing a new home theater system? A Savings Builder Account can help you avoid debt by saving what you need before you buy!

Final Thoughts

When comparing the CIT Savings Builder to traditional savings accounts at brick and mortar banks, there really is no contest: The Savings Builder wins, hands down.

With a top-tier rate of 1.00% APY, the Savings Builder blows most banks out of the water. Add no monthly maintenance fees, free online transfers, and an easily achievable incentive to save and it’s not hard to see why we love this account. We think you will love it, too!

Thanks for reading!

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Have you used the CIT Savings Builder Account? What did you think of it? Let us know in the comments below!