bank rates

CIT: Jumbo IRA CD Pays Up To 2.3%

roll of cash emerging from broken golden eggCIT Bank has launched a promotion for IRA Jumbo CDs that has really caught my eye.

The offer is being made only to current CIT customers and, according to an emailed advertising flyer, is available only through Nov. 22, 2013.

The minimum investment is $100,000, and the promotional APYs are as follows:

  • 2-Year CD: 1.40%
  • 3-Year CD: 1.55%
  • 4-Year CD: 1.95%
  • 5-Year CD: 2.30%

The 2-, 3- and 5-year yields all beat the top rates for those maturities currently shown on our CD Rates Leaderboard.

Because opening an IRA CD with funds from another IRA (or other type of tax-deferred plan) can involve complicated and time-consuming steps, I spoke with a CIT IRA specialist about issues involved in applying for, and funding, these promotional CDs.

First, she told me that applications are being taken by phone only. Online and mail applications are not available.

Second, she said that, once opened over the phone, the customer would be given up to 60 days to fund the new account.

Although the 60-day funding period appears nowhere in writing, CIT’s existing policy is to “work with” the customer for that length of time to allow for the necessary paperwork to be completed and the funds to arrive.

In my case, I have a traditional IRA CD with a balance of more than $100,000 maturing at Discover Bank on Jan. 1.

Based on what the CSR told me, if I were to open a 5-year IRA Jumbo CD over the phone on, say, Nov. 21, I could then arrange funding by instructing Discover, in advance, to make a direct trustee-to-trustee transfer of my funds to CIT on Jan. 1.

So long as my funds arrived at CIT by Jan. 20, I’d be guaranteed the 2.30% on my new CD.

(Rollover funding, where the IRA owner withdraws and receives funds from an existing IRA, then sends them on to fund the new IRA, all within 60 days, also is possible, though it has its hazards.)

Those who aren’t current CIT customers and therefore aren’t included in the promotion needn’t despair, for CIT’s regularly posted IRA Jumbo CD rates are still pretty decent (www.bankoncit.com).

For example, the bank just increased its 5-year Jumbo APY to 2.05%, which ties our Leaderboard leader.

Anyway, CIT’s offer came as a welcome surprise.

I’m hoping, in the spirit of goodwill, that other institutions also surprise me with great promotional CD deals this holiday season.

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