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Citibank Drops e-Savings Account Rate to 4.50%

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Citibank
Citibank dropped the rate on its e-Savings Account today from 4.75% to 4.50% APY. The last drop in the rate was on January 30th when Citibank lowered it from 5% to 4.75% APY.

As mentioned in this CNBC article, Citibank's market share in online savings accounts went from 2% to 19% last year. The ads and the bonuses in addition to the 5% rate probably were a major reason for this rise. So perhaps Citibank doesn't think it needs to maintain very competitive rates. Perhaps it thinks it can follow ING Direct's model and be good enough with rates. One thing to note in the article is Emigrant Direct's market share fell from 22% to 12%. Although Emigrant Direct didn't make any major rate drops, it did fail to maintain the status as the rate leader like it had for much of 2005. It'll be interesting to see how Citibank's market share will be this year.

Citibank's Ultimate Savings Account rate is still at 4.65% APY. Unlike the e-Savings, this one doesn't require a checking account. I would think this is likely to also drop before long. For new customers, you can still get a $50 sign-up bonus for this Ultimate Savings Account and a $200 bonus for the Citibank checking account (see post). Since you won't be getting the top interest rate, you matter as well get some money up front.

Thanks to the reader who mentioned this news in the finding deals post.

  Tags: Citibank, savings account

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Comments
Comment #1 by Anonymous posted on
Anonymous
Couple things about the $50 bonus for Ultimate checking a/c:

The link now states the offer code as CSKP.

When you click the "apply" button, it takes you to a screen which states you are opening a "The Citibank account" with ultimate savings a/c. Note that "The Citibank account" is a checking a/c is NOT free (unless you maintain a $6000 balance). Kind of a bit sneaky I would say. Remains to see if you will still qualify for the $50 bonus without opening "the citibank account."

The Citibank Account

w/ Citibank® Ultimate Savings AccountOffer Code:

1