NEW YORK (AP) — A new online bank is celebrating its grand opening by offering the highest nationally available rate on a one-year certificate of deposit. Unfortunately, that’s still a paltry amount.
CIT Group launched its menu of CDs this week, with one option offering a rate of 1.15 percent. That’s compared to the average rate of 0.86 percent for a one-year CD, according to Bankrate.com, which publishes financial data. The bank plans to expand its services throughout 2012 and may include checking, savings, online bill pay, mobile banking and other features.
The 1.15 percent rate is for CIT’s “Achiever CD,” which requires a minimum deposit of $25,000. If CIT raises its offered rates down the road, account holders are allowed to take advantage of a higher rate on one occasion during the term of the investment. Investors can also add money to the account one time at any point in the CD term.
The attractiveness of CIT’s rates varies depending on the term of the CD and amount invested. For a 1-year CD with a minimum deposit of $1,000, for example, the rate is 1.13 percent. To see the full list of the bank’s offerings, go to www.bankonCIT.com .
CIT’s offerings come at a time when consumers are hard-pressed to find generous returns on their savings. That’s because the federal government has been taking measures to keep interest rates low, which in turn is intended to encourage more borrowing. Mortgage rates, for example, hit record lows this month and remain near 4 percent.
CIT, which is known for providing financing to small and mid-size businesses, launched its consumer bank this week as part of its plan to diversify its business.
The company emerged from a short bankruptcy in late 2009 after facing heavy loan losses during the financial crisis.