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Citibank Drops e-Savings Account Rate to 4.75% - Other Citibank and Online Banking News

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Citibank
Citibank lowered the rate on its e-Savings account from 5.00% to 4.75% APY. The 5% yield had lasted since June of 2006. Last year it seemed Citibank was serious in keeping the rate on e-Savings competitive. I guess they have changed their minds.

It's interesting to note Citibank lowered the rate on the same day its parent Citigroup announced plans to buy Prudential's Egg bank. Egg bank is a British bank which is the world's largest stand-alone online bank.

The rate drop won't help Citibank compete in the online savings accounts. HSBC received more publicity on its 6% savings account promo in this CNN article. Here's an interesting quote about how HSBC Direct is doing in attracting customers:
HSBC Direct has attracted about 300,000 customers with $7 billion in deposits since it launched in 2005. By comparison, ING Direct, the largest direct bank in the U.S., has more than 4 million customers and more than $60 billion in assets.

I would have thought HSBC Direct would have caught up to ING Direct by now, but they're still way behind.

The article also quoted an official at Citibank Direct saying "it closely monitors market conditions and the competitive landscape when setting rates." As the article states, savers tend to be loyal and if a bank can stay close to the top, they'll be able to keep most customers. Perhaps Citibank feels 4.75% is close enough.

Thanks goes to Max who mentioned this rate update in the finding deals post.

  Tags: Citibank, savings account

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Comments
7 Comments.
Comment #1 by Anonymous posted on
Anonymous
Good thing i just registered for HSBC online savings account and can't wait to move all my savings out of citibank

1
Comment #2 by Anonymous posted on
Anonymous
Banking Guy, you are really on top of things. This morning at 9:45 CST I rolled over a mature 6% Citibank CD into their e-savings account and was told the rate was still 5%. Guess the word hadn't trickled down yet. Lucky me.

1
Comment #3 by Anonymous posted on
Anonymous
I dont know who Citibank hires for the market consultant but that person should be fired. None of the online banks nor B&M banks with hi-yield online savings accounts have been lowing rates below 5%. Most have stayed flat our gone up for a couple week them been lowered back to 5% + range.

Citibank main business is not there retail bank and more than likely they wont care if funds leave the bank I still dont think people should reward Citibank by leaving large sums in there E-savings either.

Citibank has by far the worst CD rates of any of big banks as even BOA, Wells Fargo, Chase and Wamu offer 5.25% 6 month CD. BOA via AAA affinity and Wamu offer 5% + MMA.

If Citi did not have the Thank You points I would close my checking account down with them as well.

1
Comment #4 by Anonymous posted on
Anonymous
I have been a citibank customer for more than 20 years I will now close my accts. and use emigrant direct for savings(5.05%) and Bank of Internet for checking (3.65%) Citibank just keeps playing games first with dividend select mastercard now with e-Savings as we say in new york THANKS FOR NOTHING

1
Comment #5 by rate freak (anonymous) posted on
rate freak
Well, another way of seeing things are, since I get Thankyou reward points, it somehow makes up for it.

1
Comment #6 by Anonymous posted on
Anonymous
APY dropped to 4.50%

1
Comment #7 by Anonymous posted on
Anonymous
HSBC is now at 3.55% and dropping steadily every time the the Federal Reserve lowers it's rate.

1