Is CIT Bank Federally Insured, when considering where to park your hard-earned money, one of the most important factors to assess is the safety of your deposits. This brings us to a common question: Is CIT Bank federally insured? In this comprehensive blog post, we’ll explore what federal insurance means for bank deposits, delve into the specifics of CIT Bank, and provide essential information on how to ensure your money is protected.
Understanding Federal Insurance for Bank Deposits
Before diving into the specifics of CIT Bank, it’s crucial to understand what federal insurance means and why it is vital for consumers.
What is Federal Deposit Insurance?
Federal deposit insurance is a protection provided to depositors by the U.S. government through the Federal Deposit Insurance Corporation (FDIC). Established in 1933 in response to the thousands of bank failures during the Great Depression, the FDIC was created to restore public confidence in the U.S. banking system.
FDIC insurance covers all types of deposits received at an insured bank, including savings accounts, checking accounts, money market deposit accounts, and certificates of deposit (CDs). The standard insurance amount is $250,000 per depositor, per insured bank, for each account ownership category. This means that even if your bank fails, your insured deposits are protected up to the legal limit.
Why is FDIC Insurance Important?
FDIC insurance is essential because it provides peace of mind to depositors, knowing that their money is safe even in the unlikely event of a bank failure. Without this insurance, depositors would be at risk of losing their savings if the financial institution holding their funds became insolvent.
Now that we’ve established the significance of federal insurance, let’s turn our focus to CIT Bank.
What is CIT Bank?
CIT Bank, N.A. is a subsidiary of First Citizens BancShares, a large financial holding company based in Raleigh, North Carolina. CIT Bank has a long history, with its origins dating back to 1908. It operates primarily as an online bank, offering a range of financial products and services, including high-yield savings accounts, money market accounts, certificates of deposit (CDs), and home loans.
CIT Bank has gained popularity for its competitive interest rates, especially in its savings and CD products. Since it operates without the overhead costs associated with maintaining physical branch locations, CIT Bank can often provide higher rates than traditional brick-and-mortar banks.
Is CIT Bank Federally Insured?
Yes, CIT Bank is federally insured. It is an FDIC member, which means that deposits held at CIT Bank are insured up to the maximum allowed by law, which is currently $250,000 per depositor, per insured bank, for each account ownership category. This insurance coverage is the same as what you would find at any other FDIC-insured bank.
How Does FDIC Insurance Work at CIT Bank?
The FDIC insurance at CIT Bank works just like it does at any other FDIC-insured institution. If CIT Bank were to fail, the FDIC would step in to protect depositors by either arranging for another bank to assume the failed bank’s deposits or by paying depositors directly up to the insured limit.
For instance, if you have a savings account and a CD at CIT Bank, and the total balance of these accounts is $250,000 or less, your entire balance is insured. If your combined balance exceeds $250,000, only $250,000 would be insured, unless you have accounts in different ownership categories (e.g., individual, joint, trust) that would allow you to extend your coverage.
What Accounts at CIT Bank Are FDIC Insured?
The following types of deposit accounts at CIT Bank are FDIC insured:
- Savings Accounts: CIT Bank offers high-yield savings accounts that are fully covered by FDIC insurance.
- Money Market Accounts: Money market deposit accounts at CIT Bank are also insured by the FDIC.
- Certificates of Deposit (CDs): CIT Bank’s CDs, including term CDs and no-penalty CDs, are FDIC insured.
- Checking Accounts: While CIT Bank primarily focuses on savings products, any checking accounts it offers would be FDIC insured as well.
It’s important to note that investment products offered by CIT Bank, such as mutual funds, annuities, and stocks, are not covered by FDIC insurance. These types of investments carry their own risks, and it’s crucial to understand that the FDIC only insures deposit accounts.
How to Maximize FDIC Insurance Coverage at CIT Bank
For depositors with significant savings, it’s essential to know how to maximize FDIC insurance coverage. Here are some strategies to ensure your funds are fully protected:
Diversify Account Ownership Categories
One way to increase your FDIC insurance coverage is by diversifying your account ownership categories. The FDIC insures deposits separately based on ownership category, meaning you could potentially increase your coverage by spreading funds across different account types. For example:
- Individual Accounts: These are accounts owned by one person and are insured up to $250,000 per person, per bank.
- Joint Accounts: If you hold a joint account with another person, each co-owner is insured up to $250,000 for their share of the account, potentially increasing the total insured amount to $500,000.
- Retirement Accounts: Certain retirement accounts, such as IRAs, are insured separately from your other deposit accounts.
- Trust Accounts: Trust accounts can also be structured in a way that allows for additional coverage.
Open Accounts at Different Banks
Another strategy is to spread your deposits across multiple FDIC-insured banks. Since FDIC insurance is capped at $250,000 per depositor, per bank, you can open accounts at different banks to ensure that larger sums of money are fully protected. For instance, if you have $500,000 to deposit, placing $250,000 at CIT Bank and $250,000 at another FDIC-insured bank would ensure that your entire balance is covered.
Consider IntraFi Network Deposits (Formerly CDARS)
CIT Bank, like many other banks, participates in a service called IntraFi Network Deposits (formerly known as CDARS). This service allows you to spread large deposits across multiple banks while working with just one institution. Through IntraFi, CIT Bank can place your funds in CDs at other FDIC-insured banks, ensuring that your entire balance is covered by FDIC insurance.
Why You Can Trust CIT Bank
In addition to being federally insured, CIT Bank is a reputable institution with a strong track record. It is part of First Citizens BancShares, which is one of the largest family-controlled banks in the United States. The bank has a long history of financial stability and has received positive reviews for its customer service and competitive interest rates.
Moreover, as an FDIC member, CIT Bank adheres to the rigorous standards and regulations set forth by the FDIC and other federal regulators. This ensures that the bank operates in a safe and sound manner, providing added security to its customers.
How to Verify FDIC Insurance Coverage
If you’re ever unsure about the FDIC insurance status of your bank or want to verify that your deposits are covered, there are a few steps you can take:
Check the FDIC Website
The FDIC website offers a tool called the BankFind Suite, which allows you to search for any FDIC-insured bank and verify its insurance status. You can visit the FDIC’s official website and use this tool to confirm that CIT Bank is federally insured.
Contact CIT Bank Directly
If you have questions about your coverage, you can always reach out to CIT Bank’s customer service. The bank’s representatives can provide information on FDIC insurance and help you understand how your accounts are protected.
Review Your Account Statements
FDIC-insured banks are required to disclose their insured status on account statements and other customer communications. Reviewing these documents can provide assurance that your bank is indeed covered by the FDIC.
Conclusion
In summary, CIT Bank is federally insured by the FDIC, offering depositors the peace of mind that their funds are protected up to $250,000 per depositor, per insured bank, for each account ownership category. Understanding how FDIC insurance works and how to maximize your coverage is essential for safeguarding your savings.
Whether you’re considering opening a high-yield savings account, a CD, or another type of deposit account at CIT Bank, you can rest assured that your money is safe. By diversifying account types, considering multiple banks, and taking advantage of services like IntraFi Network Deposits, you can further protect your assets.
CIT Bank’s long-standing reputation, competitive rates, and FDIC insurance make it a trustworthy option for consumers looking to grow and protect their savings. Always stay informed and proactive in managing your accounts to ensure your financial security.
