Citibank just introduced a new savings account called the Ultimate Money Account. It offers what the e-Savings Account use to offer: 5% APY. However, there's a catch. To earn 5%, it requires you to make two at least 2 electronic bill payments per month from your linked Citi checking account. If you don't meet these requirements a lower rate will be applied. According to the small print, the rate would be 4.50% APY. To apply for the Ultimate Money Account, you must have or open an EZ Checking account or another eligible checking account.
According to the webpage, if opened online with the EZ Checking account, monthly maintenance and per-check fees are waived.
I was a little confused, so I called Citibank and spoke with one of their CSRs. According to the CSR, existing customers can open this Ultimate Money Account even if they already have the EZ Checking. The CSR also said that the monthly maintenance fee waivers on the EZ Checking would also apply. However, others who have contacted Citibank have reported being told that the checking account will still be subject to the same requirements when it was originally opened. I opened the EZ Checking account for the $200 bonus and did not get any fee waivers. To avoid fees, I have to either use direct deposit or make two monthly bill payments or maintain a $1,500 combined average balance.
So if you already have the EZ Checking Account and/or the e-Savings Account, it looks like you have nothing to lose by signing up for this Ultimate Money Account. It appears that if you don't meet the bill pay requirements, you'll end up earning the same rate as the e-Savings Account.
If you're not already a Citibank customer and you're interested in these accounts, I recommend first signing up using one of their bonus promotions. There is still a $50 bonus for their Ultimate Savings Account and a $200 bonus for a checking account (see post). After this, you can then add the Ultimate Money Account to earn the highest APY.
Citibank hasn't been the best in maintaining competitive rates, and their online funds transfer service is more restrictive than many others. Outgoing external transfers are limited to a daily limit of $5,000 and a monthly limit of $10,000. However, for those who have Citibank branches nearby, you can make deposits or withdrawals at a branch and still have the relatively high yield of an online bank. This may be reason enough to make it worthwhile.