Citibank E-Savings Up To 5.0% APY, Feature Review

Citibank’s e-Savings Account just bumped up to a nice, round 5.00% APY.

This needs to be used alongside a Citibank Checking account. To avoid monthly fees, you need to one of the following:

  • Direct Deposit,

  • Make two monthly bill payments, or
  • Maintain a $1,500 combined average balance.

If you don’t have the minimum balance, I would just set up an $1 monthly auto-pay for your electricity and phone bills or any other two recurring bills you have and you’ll be all set, with nothing extra to remember each month. If you overpay it just carries over to the next month anyways.

Sounds like a great deal if you use Citibank already for your other banking.

With all these recent rate bumps, should you move your money? Perhaps my Rate Chaser Calculator can help.

Comments

  1. haha…i just saw that today and was going to link it on here……
    i guess you beat me too it

  2. Perhaps this has been answered before, but does it hurt your credit score to open savings accounts at all these online banks? Say, for example, does my credit rating suffer by having 4 accounts open as opposed to 1?

  3. Joel – Partial answer.

  4. Camilla says:

    Be sure to read all the fine print before opening a Citibank eSavings account. I’ve always known that you must have a Citibank Checking account to have the eSavings, but it also appears that there are some fees for transfers, and also LIMITS on the amount you can transfer each day and each month! I went to Citi to get information on the eSavings account, and linked to this page describing transfer limits and fees for transfers between Citi and external institutions.

    link

    I wonder if this is only transfers initiated from the Citibank side, or ALL transfers. For example, if I initiated the transfer from ING or Emigrant, would it count against my transfer limit? Does anyone have experience with the eSavings? It seems like it might have too many strings attached for me.

  5. One interesting thing I noticed about the eSavings account is that when you open it you can apparently fund it with a credit card. That sounds like a nice way to rack up some points on a rewards card since you could immediately pay off the credit card.

  6. This is crazy 5%??

    Good thing is that i already have a Esavings account with them and i used the calculator and it looks like that i need 48 days to break even for transferring from HSBC to Citibank!! i hope hsbc will match!! :)

  7. Camilla –

    Incoming ACH from Citibank are free.

    Outgoing ACH are charged IF you initiate them from Citibank (from the IIT menus). If you use something like HSBC for the outgoing side of the transfer, it’s free.

    Like a typical MMA account, you get 6 withdrawals per month as you noted. ACH pulls from other banks do count, as do transfers from Citibank Online. Transfers at ATMs do not count if I remember correctly.

    I have an eSavings, but I also have my checking with them, and have direct deposit. If you are using only the eSavings product, and don’t plan to pay any bills and plan to liquidate the balances to rate chase, it probably is not for you as, for the lowest level account, you need either $1,500 Average Daily Balance -OR- 2 Bill Payments (from your checking account – linked) -OR- Direct Deposit.

    At last check ACH IN initiated OUTSIDE CITIBANK (e.g. from ING’s website, transferring TO CITIBANK) counts as a Direct Deposit.

  8. For all you rate chasers – check out Countrywide Bank. They are offering 5.25% FDIC insured

    Amazing!

    http://www.countrywide.com

  9. The catch with Countrywide Bank is that it has a $50,000 minimum balance to get that rate.

    My question about the funding of the Citibank eSavings account with a credit card is whether it counts as a purchase or a cash advance. The former would be awesome. The latter would be tragic.

  10. It looks to me that the Citibank esavings is compounded daily and credited monthly versus HSBC which is compounded monthly. Anyone else see this difference. I think that 5.0% compounded daily is unbelievable, so I must be missing something.

  11. 28 day treasuries rose to a 4.859% investment rate today 6/27. If you have high state income taxes this is surely the better bet.

  12. Anon – The 5.0% is APY, and APY already takes into account compounding frequency.

  13. Anonymous says:

    It is actually an APR of 4.88% resulting in a 5.00% APY

  14. HSBC bumped rate on its savings to 5.05%

  15. HSBC 5.05%APY SINCE TODAY

  16. I just noticed with E-savings account that one can setup for FREE, that’s right free inter-institution transfers.

    I just setup for my bankdirect account & Bankamerica accounts and citi did trial deposits of 90 cents to each of the accounts and verified them within 1 day. Not bad for a little free money and this also greatly enhanced my banking experience with 3 institutions.

  17. Don’t believe it when it says 5%, or whatever. I have 100k in there, and I only get about 3.4%. Because it’s based on 12 months divided by a daily rate. It’s much lower. Citibank is good only that it’s a higher interest checking and debit account. That’s about it.

  18. Tim,
    If you’re only getting 3.4% then your money is NOT in an eSavings account.

    I have around $45,000 in eSavings and I’m earning $185 / month. That’s an APR of 5%.

    I’m not sure why you’re only getting 3.4%. You should be earning over $400 interest on 100K.

    Call your branch and straighten that out.

    DS

  19. They claim it is interest divided over 365 days for the month. So, for 100k, it is only about 3.5% each month. Here is their email justifying the lower rate than advertised.

    Thank you for your message regarding the interest earned in your e-Savings account ending in 562. The Annual Percentage Yield (APY) was 4.75% and the Interest Rate was 4.64% up to 04/02/07. Effective 04/03/07, the APY is 4.50% and the Interest Rate is 4.40%.

    The interest of $354.49 posted on 05/14/07 was for the statement period 04/16/07 to 05/14/07. While the balance in your account increased marginally, the interest rate decreased.

    The e-Savings account earns interest at a variable rate, which is subject to change daily and is based on the average daily balance. The interest is compounded daily (365 days).

  20. current rate is 4.25% APR

  21. Frustrated Saver says:

    How times have changed. I opened up an e-Savings account with Citibank back when they were offering 5 percent interest. With the worsening economy, they kept chipping away at the APR little by little each month, until I am now getting about 1 percent.

    It’s truly disgusting, but since most banks (including Citibank) aren’t offering much better for any available no-strings liquid account, I’m reluctant to switch to a higher-yield account just to have the same thing happen in a month. I also don’t like the idea of locking my money into a CD to get a slightly better rate.

    It’s sad how responsible savers are being punished for the greed and ineptitude of the Wall Street bankers and irresponsible consumers.

  22. exasperated says:

    Frustrated -
    You’re not speaking to a void.

    I signed up then, too. In fact, I stopped checking my balances online awhile ago, and it turns out my apartment # was left off of my snail mail address. So I just got a letter from them this week telling me that my accounts have been closed! When I set up my accounts, they told me that they were waiving all fees, but apparently in January, they suddenly started charging them, but since I wasn’t getting my mail (except for this latest letter, which a smart carrier put in my box), I didn’t know it.

    Did they tell you, too, when you opened the account that you wouldn’t be charged any fees, even if you didn’t meet the minimum balance, make deposits, etc.?

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