bank rates

CIT And OneWest Merge … Now What?

More than a year after it was first announced, CIT Bank has finally completed its controversial $3.4 billion acquisition of OneWest Bank.

So far, at least, the combined bank hasn’t ditched CIT’s above-average returns on certificates of deposit and savings accounts for OneWest’s less-lucrative rate sheet.

In fact, the first week of this banking union seems to be a case of the more things change, the more they stay the same.

According to online FAQs, the combined banks will continue to function separately. There will be two sides to the newly created CIT Bank, N.A. – a CIT side (all online) and a OneWest side (online and branches).

CIT’s current suite of deposit products (savings, CD and IRA accounts) will be offered, and related online banking services will be available, on the CIT website.

OneWest’s deposit products and services will be housed in a OneWest Division of CIT Bank, N.A., headquartered in Pasadena, California. The division will operate through OneWest’s Southern California branch network and website.

CIT accounts may not be opened, nor may they be accessed, at OneWest branches or on the OneWest website. Similarly, OneWest accounts may not be opened, and may not be accessed, on the CIT website.

But, in one crucial area – FDIC insurance – CIT and OneWest will be one bank, with their deposit accounts combined, subject to the FDIC’s special “transitional” rules, for purposes of the insurance limitation of $250,000 per depositor per ownership category.

(Information on how FDIC rules affect depositors like me, who have accounts at both CIT and OneWest, can be found on the two websites.)

There is product overlap in savings and certificates of deposit. But that doesn’t mean rate competition has broken out.

Rates offered by the CIT side have it all over those offered by the OneWest side.

Savings Rates: CIT vs. OneWest

Type of Account CIT APY OneWest APY
Online Savings 1.00% 0.40%
1-Year Online CD 1.25% 0.75%
2-Year Online CD 1.30% 1.00%
5-Year Online CD 2.20% 1.80%
The CIT savings rate is for balances up to $25,000. (It’s 1.05% for balances over $25,000.) OneWest savings rates are for its Green Savings account with balances up to $50,000. The minimum deposit for all CDs is $1,000.

The OneWest division does offer checking and money market accounts that CIT does not.

The dual operating structure and product offerings strike me as works in progress. I suspect eventually we’ll see more integration between CIT and OneWest.

But, for now, as one who supported this merger during the regulatory approval process, I’m satisfied.

That’s because, at least on the CIT side of the merged bank, the rate leadership and saver-friendly policies of the premerger CIT seem to have been preserved.

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