There are financial institutions that exist only online, known as “online banks.” There are a number of ways in which online banks excel over their brick-and-mortar counterparts: reduced costs, higher interest rates, more convenience, and easier accessibility. Millennials, who place a premium on convenience and digital services, have shown to prefer online banking.
Two of the most prominent US internet banks are CIT Bank and Ally Bank. Both banks provide customers with a variety of financial services, including savings accounts, checking accounts, money market accounts, and CDs. There are no monthly maintenance fees or minimum balance restrictions with either bank, and deposits are insured by the FDIC for up to $250,000.
On the other hand, there are certain distinctions between CIT Bank and Ally Bank to consider. In this post, we’ll examine the similarities and differences between CIT Bank and Ally Bank, two online banks. In the table below, we’ll compare and contrast the two banks and highlight the key similarities and differences.
|Aspect||CIT Bank||Ally Bank|
|Interest Rates||Higher for balances over $25,000 or with monthly deposits||Lower but consistent regardless of balance|
|Fees||No monthly fees; up to $30 ATM fee reimbursement per month||No monthly fees; up to $10 ATM fee reimbursement per statement cycle|
|Features||Multiple high-interest savings products and CDs; eChecking account with debit card; mobile app with check deposit and bill pay||Interest checking account with debit card; multiple CD options; mobile app with check deposit, bill pay, and Zelle|
|Customer Service||Phone and email support; online chat coming soon||Phone, email, and chat support; social media channels|
|Security||Two-factor authentication; encryption; identity verification; fraud alerts||Two-factor authentication; encryption; identity verification; fraud alerts|
Getting a better return on your savings is a major incentive to switch to an online bank. The interest rate is the proportion of your account balance that will accrue as interest over a certain time period. The greater the interest rate, the greater the return on investment for saving.
Although CIT Bank and Ally Bank both provide attractive interest rates on accounts, these rates vary by account type and account amount. Let’s evaluate the difference in interest rates between CIT Bank and Ally Bank for various deposit accounts, including savings, checking, money market, and certificates of deposit.
You may put money away in a savings account and receive interest on it. If you need a place to put money aside quickly, have a particular purpose in mind, or just want to build your wealth over time, a savings account is the way to go.
Platinum Savings, Savings Connect, and Savings Builder are the three distinct savings products provided by CIT Bank. The interest rate you may earn varies from account to account based on a number of factors.
- Platinum Savings: If you keep $5,000 or more in your Platinum Savings account, you’ll get a 5.05% APY (annual percentage yield). Your annual percentage yield (APY) will be 0.25% if your balance is less than $5,000. The initial deposit requirement is $100, and there is no ongoing service charge.
- Savings Connect: If you create an eChecking account at the same time as a Savings Connect account and make a monthly qualifying deposit of $200 or more into both accounts, your savings account’s annual percentage yield (APY) will increase to 4.65%. If you don’t meet them, your APY will be 0.25 percent. The initial deposit requirement is $100, and there is no ongoing service charge.
- Savings Builder: If you maintain a balance of $25,000 or more, or if you make at least one monthly qualifying deposit of $100 or more, you may earn 1.00% APY in your Savings Builder account. If you don’t meet them, your APY will be 0.25 percent. The initial deposit requirement is $100, and there is no ongoing service charge.
The Online Savings Account is Ally Bank’s only option for those looking for a savings account. No minimum balance is required to get the APY of 4.00% with this account. Both the initial deposit and the ongoing maintenance cost are waived.
Higher interest rates are available for savings accounts with balances exceeding $25,000 or with monthly deposits at CIT Bank. Cons include a reduced interest rate for accounts under $5,000 or no monthly installments if the beginning deposit is less than $100.
There is no minimum beginning deposit or monthly deposit required for the Ally Bank Savings Account, and the interest rate is fixed regardless of the account amount. When compared to CIT Bank’s savings accounts, which provide a higher interest rate on balances above $25,000 and on monthly deposits, this one has a lesser rate.
Let’s say you want to compare the interest rates offered by two different banks for savings accounts, and you have $10,000 to deposit and can afford to put away $200 each month for a year. Consider the following interest rates on several accounts:
|Account||Interest Rate||Interest Earned|
|CIT Bank Platinum Savings||5.05% APY||$522.76|
|CIT Bank Savings Connect||4.65% APY||$483.67|
|CIT Bank Savings Builder||1.00% APY||$102.50|
|Ally Bank Online Savings Account||4.00% APY||$412.22|
As can be seen, the greatest rates and highest total interest earned are associated with the Platinum Savings and Savings Connect accounts of CIT Bank. A higher interest rate and more interest earned may be available via Ally Bank’s Online Savings Account if your balance is less than $5,000 or if you do not make monthly deposits.
Money in a checking account may be withdrawn quickly and conveniently. Having a checking account is convenient for several reasons, including making purchases, moving funds, paying payments, and monitoring your financial flow.
eChecking is the only checking account option provided by CIT Bank. With a balance of $25,000 or more, you’ll earn 0.25% APY, while smaller amounts will get 0.10% APY. Both the initial deposit and the ongoing maintenance cost are waived. A debit card is included with this account, which may be used at any of the more than 60,000 fee-free ATMs around the country. If you use an ATM that is not owned by CIT Bank, the bank will pay up to $30 back to you each month.
Only an Interest Checking account is available from Ally Bank. Daily balances of $15,000 or more earn 0.25% APY in this account, while balances of less than $15,000 earn 0.10% APY. Both the initial deposit and the ongoing maintenance cost are waived. There are more than 43,000 fee-free Allpoint ATMs countrywide that accept the debit card associated with this account. If you use an ATM that is not owned by Ally Bank, the bank will repay you up to $10 every statement cycle.
The perks of having a high-balance eChecking account with CIT Bank include a better interest rate and more frequent reimbursement of ATM fees. A reduced interest rate is offered for balances under $25,000, and there is no live chat help available.
The Interest Checking account from Ally Bank features perks including a fixed interest rate independent of the account balance and live chat service. One drawback is that it reimburses less ATM fees every statement cycle and pays a lower interest rate than CIT Bank’s eChecking account for balances exceeding $25,000.
To compare the interest rates offered by different banks’ checking accounts, let’s pretend you have $5,000 to deposit and want to make 10 withdrawals from non-network ATMs each month at a cost of $3 each time. The interest you may expect to earn and the fees you could expect to incur with each account type are detailed below.
|Account||Interest Rate||Interest Earned||ATM Fees||ATM Fee Reimbursement||Net Earnings|
|CIT Bank eChecking||0.10% APY||$5.05||$360 ($3 x 10 x 12)||$360 ($30 x 12)||$5.05|
|Ally Bank Interest Checking||0.10% APY||$5.05||$360 ($3 x 10 x 12)||$120 ($10 x 12)||-$234.95|
Compared to Ally Bank’s Interest Checking account, CIT Bank’s eChecking account earns interest at the same rate and provides the same amount of reimbursement for ATM costs incurred while using non-network ATMs. The Interest Checking account from Ally Bank will only refund you up to $10 every statement cycle for ATM costs, so you will still have to spend $240 annually.
Money Market Accounts
Money market accounts are similar to both savings and checking accounts in terms of their functionality. Money market accounts provide the dual benefits of easy access to your funds and interest earnings.
The money market account offered by CIT Bank is simply called “Money Market Account.” The annual percentage yield, or APY, on this account is 1.5%. The initial deposit requirement is $100, and there is no ongoing service charge.
Money Market Account is Ally Bank’s only MMF offering. The annual percentage yield, or APY, on this account is 4.30%. Both the initial deposit and the ongoing maintenance cost are waived.