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  • Writer's pictureNathan Zarcaro

[2023] Is CIT Bank's High-Yield Savings a Good Option For You?

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In an era of high inflation and interest rates, Americans have grown sick and tired of earning next to no interest in their traditional checking and savings accounts. The problem is that most people are unaware that they have other options out there.


One such option is a high-yield savings account.


Today, I'm going to review CIT Bank's High-Yield Savings Account and help you decide whether it is a good option for you.



What are high-yield savings accounts?


High-yield savings accounts are a type of account offered by some traditional banks and other financial institutions. Most of the time, they are offered by online banks, in part because they can afford to pay higher rates without the financial overhead of a brick-and-mortar bank model.


Rates offered vary by bank, and in some cases, may be variable by nature. Times of high inflation and federal funds rates likely mean higher rates, while times with low inflation and federal funds rates oftentimes lead to lower rates.


The rates offered may also depend on the amount of money you have to deposit into your account.


CIT Bank Savings Connect


CIT Bank's high-yield savings account, known as Savings Connect, offers qualifying account holders the chance to earn up to 4.50% APY.

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What is CIT Bank?


Online banks have boomed in popularity over the past five years, as many savers and investors have grown wary of high fees and cumbersome customer service. Many of these banks, like Ally, Discover, and Axos, are really well-known, while others are still working on building their names and assets.


CIT Bank is an online only bank that has roots tracing all the way back to 1908. Founded in St. Louis, Missouri and a subsidiary of First Citizens BancShares, CIT is known for offering mortgage loans and cash management, in addition to financial advisory and other services directly to individual clients.


Today, they are best known for their high-yield savings product, known as Savings Connect.



What is Savings Connect?


CIT Bank's Savings Connect is a program that allows eligible individuals the chance to earn higher interest rates on their savings by linking a high-yield savings account to an already existing checking account.


From here, you'll begin to earn much higher rates of return that, over time, can help you to reach your financial goals more quickly.


I typically recommend CIT's high-yield savings product for those preparing for expensive financial goals such as homeownership. Since your money won't be invested in risky assets like stocks, Savings Connect is even suitable for those with shorter or more medium-term financial goals.



Pros of CIT Bank's high-yield savings account


CIT Bank's Savings Connect program has a number of pros and cons that potential customers should consider.



1. High interest rates


As of April 2023, the average United States checking account offers 0.24% APY, according to Bankrate. While this is up from an all-time low of 0.03% back in the summer of 2021, it remains a far cry from yields offered by CIT Bank's high-yield product.


At the time this post was written, CIT's Savings Connect was offering an incredible 4.50% APY, over 18x higher than the average checking account!



2. No monthly fees


One of my favorite parts about CIT Bank's high-yield savings account is that they don't assess any monthly fees that will eat away at the interest that you earn. Many other banks assess ongoing monthly maintenance fees that, with a low enough rate and balance, could effectively cost you more money than you earn in interest.



3. Low minimum balance


CIT's Savings Connect program is available to those with as little as $100 in their account. This is great news, since in many instances, high yield accounts require higher minimum balances in order to qualify for the high rates.


Plus, to qualify for the highest rates offered under the program, you'll only need to deposit $200 per month into your account.


In the context of all the other high yield accounts out there, these balance and deposit requirements are very manageable.



4. Completely digital experience


Customers interact with CIT Bank virtually, given their position as a direct bank that can do business without branches. And customers seem to really enjoy not having to visit a physical location in order to find solutions to their problems. In fact, their customer service reviews are far superior than the majority of banks out there.


In fact, they score a very respectable 3.8/5 stars on WalletHub, which is pretty good for a bank.



Cons to CIT Bank high-yield savings


There are a couple of potential negatives to the Savings Connect program that you should be aware of.



1. Transaction limits


Many high yield saving accounts, CITs included, have a limit on the number of transactions that you can make per month or statement cycle. Savings Connect allows you to make 6 transactions or withdrawals per cycle, meaning that it likely is not a feasible option to replace a traditional checking account.



2. Variable interest rates


Just because you open a Savings Connect account now at 4.50% APY does not mean that it will stay that way. In the future, these rates could either increase or decrease, depending on future monetary policy decisions made by the United States Federal Reserve Board.



Frequently asked questions


I know that you've still got questions. Here are some answers to the questions on your mind.



1. Is CIT's high-yield savings accounts safe?


CIT Bank's high-yield savings accounts are FDIC insured up to $250,000 in value, just as the majority of regular bank accounts are. So by this measurement, CIT's Savings Connect product is safe. This would protect you in the event that CIT Bank ever defaulted or went out of business.


CIT also has a proven track record and has been in business for 1908, which could make potential customers comfortable.



2. How does Savings Connect work?


The Savings Connect high-yielding program works very similarly to the majority of bank accounts out there. The program works by linking an existing eChecking account. After you meet the qualifying requirements, you'll gain eligibility to earn the much higher rates of interest.


To qualify, you'll may need to make a certain number of qualifying transactions in a month.


You'll also need to have a minimum of $100 to retain eligibility.



3. Can you use a joint account for Savings Connect?


At this time, CIT Bank's Savings Connect program is available to those with individual checking accounts, though in the future, could be opened up to those with joint accounts.



Is CIT Bank's high-yield savings a good option?


With all of this in mind, I believe that CIT's high-yield savings program to be an excellent opportunity for Americans of all backgrounds to seriously bolster their savings much faster than that may have been able to do with a traditional bank account.


I think it is the perfect solution for the following groups of people:


  • Those looking to save money for short to medium term goals

  • Those looking for a safe place to save their emergency funds and grow them at the same time

  • Those that want a solid account without any fees


All of these positives said, I don't believe CIT is the perfect solution for everyone.


More specifically, I recommend that the following people steer clear of CIT's high-yield savings options:


  • Those that like to deal with local/regional banks with a physical presence

  • Those that need an account linked to a debit card

  • Other account bells and whistles



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About Nathan Zarcaro

Nathan Zarcaro is the founder of The Student Debt Destroyer and is passionate about personal finance related causes.  A 2018 graduate of Providence College's Liberal Arts Honors Program, Nathan studied Finance, and worked for one of the world's largest asset management firms before starting his own business.  In his free time, Nathan enjoys playing golf and traveling with his wife Brigid.

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