Several months ago I opened a CIT Bank Savings Builder account. This special fund pays 2.45% annual interest as long as you deposit at least $100 a month into it.
After having this account for some time now, I wanted to share my thoughts on CIT Bank and their high-interest funds.
Below are five advantages to using this account.
1. You Get Better Interest Rates Than A Regular Bank
When I first opened a CIT Bank savings account, I deposited $500. This earned $0.57 in monthly interest.
Not a ton, but many traditional banks pay less than 1% in interest. My local bank, for instance, offers 0.15% returns. So you’re getting $0.13 a month for every $1,000. That’s terrible and doesn’t even keep pace with inflation!
CIT Bank has a comparable yield to several bond funds, or the Vanguard money market account. But unlike stocks or bonds, there’s no risk of your principle deposit losing value.
2. Easy To Access Your Money (Unlike Bonds)
Most risk-free investments (government T-bills, certain bonds) tie up your money. High-interest savings accounts do not.
A CIT savings account generates similar returns to many bonds or T-bills, except your money stays liquid. This makes it easy to withdraw funds whenever you need them.
3. Stocks Are Reaching Their All-Time Highs (Again)
My 12-month stock returns are currently sitting at 4%. Most of these gains were made by buying the December dip and January recovery.
Without this, I’d be sitting at 0% (or even negative) gains.
Why?
Because the stock market spent an entire year see-sawing between all-time highs and massive corrections.
Call me a baby, but I’d rather wait in cash until prices drop than keep buying at the top.
4. Opportunities To “Buy Low”
The experts claim we’re headed for a recession. Both Ray Dalio and Ben Bernanke say there’s a strong chance of market correction in the near future. Bad if you have all your funds tied up in stocks, but good if you have cash sitting on the sidelines.
If that’s the case, you’ll have a terrific opportunity to scoop up wonderful assets (stocks, real estate, etc) at a massive discount.
5. Gives You A Savings Goal
There’s really no advantage to sitting in cash when interest rates are so low. On fact, this is one of the big reasons stock prices are so high. With nothing else generating a return on investment, people turn to Wall Street.
CIT Bank and it’s 2.45% interest isn’t life changing, but it is a better payout than either the VOO or SPDR annual dividend. This means you’re generating more cash, with less risk.
For me at least, CIT Bank’s interest rate is enough to keep me motivated with saving. Instead of dumping everything into stocks, you can play it safe while still getting paid.
CIT Bank Review – Final Thoughts
I really enjoy my high-interest savings account.
If you’re looking for a safe, stable place (that’s FDIC insured) to park your money, CIT Bank is an excellent option. Especially with stocks and equities reaching their all-time highs (again).
This is a very low-risk way to protect yourself and sit in cash as you wait for asset prices to fall back towards a reasonable rate.