My New Muse, The CIT Bank Savings Builder Account

For a long time I had my emergency fund money sitting in a savings account at a credit union.  I was getting better interest than the vast majority of savings accounts out there, but still losing money to inflation. 

As the Fed has begun hiking interest rates, the yields for savings and money market accounts have been getting better.  So I started mulling over transferring my emergency fund to a higher interest savings accounts last summer, but was stuck when comparing the available choices.  

We’re now at the point where the top savings and money market accounts are paying 2.25 APY or more.  It’s been about a decade since interest rates on these accounts have been higher than inflation. 

With two or three more Fed interest rate hikes planned this year, some predict top yielding online savings accounts could reach 3% by year’s end.  So I had to stop my analysis-paralysis which is a personal tendency of mine and just make a choice.

The Candidates

I whittled my options down to Ally Bank (2.20% APY), American Express High-Yield Savings (2.10%), and CIT Bank Savings Builder (2.45% APY).  Everyone in the FI community seems to be using Ally Bank and they get great reviews.  And I like the pedigree of a marquee name like American Express. 

But I decided on CIT Bank’s option, primarily because they had the highest interest rate, plain and simple. 

During my research I found that CIT had filed for bankruptcy protection in November 2009, but had emerged out of it 38 days later.  Considering what all banks had just been through in the 2008-2009 financial crisis, this didn’t surprise me all that much. 

Bottom line, your money with CIT bank is FDIC insured up to $250,000 like the other banks.  So I’m not too worried.

Setup

Creating and setting up my CIT account should have been all online and super easy.  Had I not made a mistake in the setup process, it would have only taken about 10 minutes max.

But because I’m sloppy, I inadvertently left the “State” field empty in the step where I was entering a beneficiary address for my new account.  So when I got to the last step of the setup, which is establishing a username and password for my new account, I received an unwelcome screen that said “We cannot process your request”. 

I tried to go back to do it again but it just gave me the same error.  Alas, I was forced to call them.  As an online-only bank I didn’t expect it to go well.  And being that I had already entered all my personal information including my social security number as well as the account information of the credit union where my initial deposit was coming from, I was sweating a bit. 

I was pleasantly surprised to get a real human being on the phone pretty quickly.  I did have to navigate through a few annoying robo-teleprompter menus, but my usual strategy of just repeatedly pressing zero worked.

The customer service rep was very helpful, she found the problem pretty quickly and finished my set up for me.  I told her, however, that she needs to talk to the web programmers because had they done their job well I should have simply received a prompt saying “Please fill out the state of beneficiary” alert. 

That’s basic web design 101, and they messed that up.  She conceded the point and made a note of it.

Overall, for an online-only bank I do find their website and interface a little spartan and antiquated. I’ve used it a few times now to do a few more transfers and it works fine, but it reeks of basic utilitarian.  Perhaps this is how they save money and increase their APY rates.

The Basics

The three CIT Savings Builder options are:

Here are the most important things to know about the CIT Savings Builder Account

• To avoid fees and get the 2.45% APY rate you must either keep a balance of $25,000 or make at least one deposit of $100 or greater every month.
• You’re limited to no more than six transactions per month.  This isn’t a CIT policy but a legal requirement that affects all savings and money market accounts.  Going over the limit will incur a $10 fee per transaction, which is low compared to competitors. 
• You can link up to 6 different financial institutions to your account for online transfers. 
• There are no ATM cards or brick and mortar branches.

The six transaction limit is the only thing I remotely care about, and being that this money is my emergency fund it’s still plenty for me.

I’m not affiliated with CIT in any way except for being a new customer.  I’m not the kind of “monetize at any cost” blogger who would write an article like this for the sole purpose of getting some affiliate clicks.  

If in the future I still find myself happy with CIT bank I will consider becoming an affiliate partner as they do have a program.

Your Turn Readers – Where do you have your emergency fund?  Are you getting enough interest to beat inflation?