Tag: Checking accounts

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Earning Interest

The Best High Yield Checking Accounts in 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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The money you keep in your checking account has a lot of valuable potential that can help you reach your financial goals. Sadly, this potential isn’t often realized because most checking accounts offer little to no interest, especially compared to savings and CD accounts. These high yield checking accounts are bucking that trend with sky-high rates that can put even the best savings accounts to shame. But, before you sling all of your cash into one of these accounts, there’s a few things you need to know.

Typically, these accounts come with a lot more strings attached than a regular checking account (you didn’t think they’d be offering all of this for free, did you?). In this article, we’ll help you make an informed decision about whether one of these high yield checking accounts are right for you and your financial goals.

How we picked the best high yield checking accounts

We followed a strict approach when selecting these accounts. We used the online rate finder for FDIC- or NCUA-insured rewards checking accounts on DepositAccounts.com, another LendingTree.com-owned site, to list the top 10 checking accounts with the highest rates. These rates were pulled on 1/10/18. We assumed a deposit amount of $100.

Credit unions were only included if they allow membership to anyone (such as by making a donation to their chosen charity). Finally, we filtered out any checking accounts that are not available nationwide, or that carry a health rating of below a B.

The best high yield checking accounts in 2018

America’s Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following four things each month:
        1. Have $15,000 in loans or deposits with ACU
        2. Have a $500 direct deposit
        3. Be signed up for eStatements
        4. Complete 10 debit transactions in person in store
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: Your first 10 non-America’s Credit Union ATM withdrawals are free. After that, you’ll pay $1.00 per withdrawal at a non-America’s Credit Union ATM.
  • ATM refunds: None

First Financial Credit Union (Illinois)

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following two things each month:
        1. Be enrolled in eStatements
        2. Complete 15 signature-based debit card purchases
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: Your first eight out-of-network withdrawals per month are free. Balance inquiries and cash withdrawals after your eighth withdrawal of the month are $1.00 each.
  • ATM refunds: $10 per month.

La Capitol Federal Credit Union

  • Minimum amount to open: $50
  • Requirements to earn the high APY: Make at least 25 debit purchases per month.
  • Monthly service fee and how to waive it: $2; waived if you enroll in eStatements.
  • ATM fees: None
  • ATM refunds: Up to $25 in out-of-network surcharges (the money the ATM’s owner charges you) per month if you are signed up for eStatements and make 25 debit purchases per month.

Blue Federal Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must have completed the following three things each month:
        1. Make at least 10 debit transactions
        2. Be enrolled in eStatements
        3. Have at least one direct deposit, ACH deposit or withdrawal, or bill payment per month from your account
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: $1.50 for out-of-network ATMs.
  • ATM refunds: $3 per transaction, up to $21 per month as long as you’ve met the requirements to earn the high APY. Otherwise, no ATM fee refunds will be given.

One American Bank

  • Minimum amount to open: $50
  • Requirements to earn the high APY: You’ll need to do the following three things for each qualification cycle (be aware: their qualification cycles are not the same thing as a calendar month):
        1. Complete at least 12 debit purchases of $5.00 or more
        2. Be enrolled in eStatements
        3. Log into your Online Banking account
  • Monthly service fee and how to waive it: No monthly service charges.
  • ATM fees: None
  • ATM refunds: Up to $25 per qualification cycle if you meet the requirements to earn the high APY.

Partner Colorado Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You’ll need to do three things each month:
        1. Use your debit card to make at least 20 signature-based purchases of $5 or more
        2. Be signed up for eStatements
        3. Log into your Online or Mobile Banking account
  • Monthly service fee and how to waive it: $5; waived if you meet the requirements to earn the high APY.
  • ATM fees: None.
  • ATM refunds: All ATM surcharge fees are refunded.

Signature Federal Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following things each month:
        1. Have at least one direct deposit into your account of $1,000 or more
        2. Be enrolled in e-statements
        3. Use your debit card to make at least 10 purchases per month
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: None.
  • ATM refunds: Signature Federal Credit Union allows you to choose from either a higher interest rate, $10 in waived ATM fees, or debit card rewards points. If you choose the higher interest rate, they will not waive ATM fees.

Lake Michigan Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You’ll need to complete these four actions each month:
        1. Have at least one direct deposit into any Lake Michigan Credit Union account
        2. Make at least 10 debit purchases
        3. Log onto online banking at least four times
        4. Be signed up for eStatements
  • Monthly service fee and how to waive it: No monthly service fees.
  • ATM fees: $1.00 for out-of-network ATMs.
  • ATM refunds: $15 per month in out-of-network ATM surcharge fees (i.e., the fees that the ATM’s owner tacks on).

Great Lakes Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following actions each month:
        1. Have at least $500 in direct deposits into the account
        2. Make at least 10 signature-based debit card purchases of $100 or more
        3. Be signed up for eStatements
        4. Use Bill Pay at least once or log into Mobile Banking at least once
  • Monthly service fee and how to waive it: $5; waived if you have at least $500 in direct deposits each month and 5 signature-based debit card purchases per month.
  • ATM fees: $2.00 for non-Great Lakes Credit Union ATMs, $0.50 per balance inquiry even for in-network ATMs.
  • ATM refunds: $5 per month if you meet the requirements to earn the high APY.

Evansville Teachers Federal Credit Union

  • Minimum amount to open: $0
  • Requirements to earn the high APY: You must complete the following four requirements each month:
            1. Complete at least 15 debit purchases
            2. Receive at least one direct deposit into the Virtual Checking account
        3. Log into your online or mobile banking account at least once
        4. Be signed up for eStatements
  • Monthly service fee and how to waive it: No monthly service fee.
  • ATM fees: No fees
  • ATM refunds: There are no ATM fees with this account.

How are these banks able to offer such a high APY?

Did you notice that most of the institutions offering high yield checking accounts tend to be smaller names that you’ve probably never heard of? It turns out there’s a good reason for that, and it all has to do with some recent legal changes.

Back when the Dodd-Frank Act was passed in 2010, a tiny legislative nugget called the Durbin Amendment was included in the text. This amendment limited the swipe fees that big banks can charge merchants for each purchase that one of their customers makes using a debit card.

Suddenly, big banks could only charge half as much per swipe as they had been doing, and swipe fees became a lot more lucrative for smaller banks and credit unions instead.

That’s why so many smaller institutions have strict rules requiring you to use your debit card each month. According to the Federal Reserve, in 2016 smaller banks earned anywhere from 18 to 65 cents for each debit card swipe, compared to a maximum of just 22 cents plus 0.05% of the purchase price for larger banks.

Say, for example, a smaller bank requires you to make 10 debit transactions per month, and earns 65 cents from each transaction. Your bank would then earn $6.50 from your spending that month.

That is where the high interest rates come from. It’s also why the high interest rates are generally capped to smaller balances, so that you don’t earn too much money and negate all the swipe fees that the bank earns.

Is it worth meeting requirements to go after the high APY?

Some of these high yield checking accounts have a lot of requirements.

If you prefer to use debit cards, chances are you’ll be able to easily meet the minimum debit swiping requirements for most of these accounts. On the other hand, if you’re a cash or credit card junkie, you may find yourself frequently worrying at the end of the month about whether or not you’ve met the minimum debit swiping requirements. In this case, a high yield checking account might not be right for you.

Another thing to consider is that many of these banks require you to make a signature-based debit transaction, rather than a PIN-based debit transaction for it to count. Unfortunately, this is slightly less secure than using the PIN-based payment method.

You’ll also need to avoid making a rush of charges at the end of the month to meet the spending requirements. That’s because banks and credit unions will usually only count a charge that has finished posting to your account towards meeting the monthly swiping requirement. It can take a few days for debit swipes to post to your account, so it’s better to get these charges in early to make sure they post to your account in time to count.

The good news is that checking accounts aren’t designed to hold significant amounts of cash. That’s what a savings account is for, and you can still earn pretty good interest rates with a high yield savings account (although still nowhere close to these checking accounts).

If you’re going to keep a smaller deposit in your checking account anyways, why not earn as much as you can from it—especially if you know you’ll have an easy time meeting the requirements?

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Reviews

Citibank Review: Savings, Checking, CD, and IRA CD and Money Market Accounts

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

Citibank Reviews
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You might think of credit cards when you hear the name “Citi,” and you wouldn’t be wrong. This bank — one of the largest banks in the entire world — is well-known for its line of credit cards. But Citibank offers a variety of financial products, including several deposit accounts where you can safely store your cash. But are they any good? And how do their rates and rules compare to other banks?

We’re going to dive into Citibank’s deposit accounts in this review so that you can decide whether it’s right for you or not.

One important note: The rates for each of these accounts vary depending on where you live. To compare consistent numbers, we decided to report rates from South Dakota, because Citibank is headquartered there, in Sioux Falls. Rates are accurate as of Jan. 03, 2018. To see rates for your area, go to Citibank’s website and enter your state.

How Citibank’s checking and savings accounts work

You can’t really get an individual checking or savings account at Citibank. Instead, you have to apply for one of five account packages. That means that when you open a checking account, you’ll also get a linked savings account, and vice versa.

Some account packages come with a monthly maintenance fee, which applies to the account package as a whole. For example, if there is a $30 monthly fee and you don’t meet the requirements to waive it using either your checking or savings account, the fee will be taken out once that month from your checking account.

To make things less confusing, we’ll go through all of the account packages first describing the checking accounts, because these accounts differ the most between account packages. Then, we’ll describe how the savings account works within each of these packages.

Citibank checking accounts

Checking account offer

Citibank is currently offering a great sign-up bonus when you open a new qualifying checking account before March 31, 2018.

To get a sign-up bonus of $300, you’ll have to do three things. First, open a new checking account within a Citibank® Account Package. Second, you’ll have to fund it with at least $15,000 within 30 days of opening the account and keep the money there for at least 60 days. Third, you’ll have to set up a direct deposit into your new account for at least two consecutive months.

When applying for a Citibank deposit account, you’ll need to provide basic information about yourself (including your Social Security number) and a valid form of ID. Both offers require you to be a “New-to-Citibank” customer.

Citigold® Package

Myriad of exclusive deals and perks for people with a lot of cash

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.03% APY
  • Monthly maintenance fee: None
  • ATM fees: None
  • ATM refunds: All ATM surcharges from non-Citibank ATMs are refunded for any statement period you are eligible for Citigold®.
  • Overdraft fees: None

The Citigold® account package is more than just a checking account. To qualify for this account package you’ll need to bring a lot of cash to the table: You’ll need at least $200,000 in all linked Citi accounts, whether they be in your deposit, retirement or investment accounts. If your balances dip below that amount, Citi will automatically convert your account to the Citi Priority account package.

But, if you can meet that high bar, you’ll be eligible for numerous perks, even if the interest rate on this savings account is admittedly quite low. You’ll get a personal team to help you navigate the intricacies of all this account package has to offer — and it offers a lot more than just free checks. You’ll get a personal financial adviser, a concierge service and numerous travel perks, as well as discounts and waived fees on various loans, lines of credit and investments. Plus, you can enroll your checking account in Citi’s ThankYou Rewards® program.

You can apply for a Citigold® account online, over the phone, or by visiting a local branch.

Citi Priority Account Package

Nice perks for people with less — but still a lot — of money

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.03% APY
  • Monthly maintenance fee: $30
  • How to waive monthly maintenance fee: Keep at least $50,000 in linked Citibank accounts, including deposit accounts, retirement accounts and investment accounts.
  • ATM fees: None
  • ATM refunds: Not available
  • Overdraft fees: None

Unlike the Citigold® account, which has no fees, you’ll pay a high monthly fee of $30 with this account unless you can keep at least $50,000 in other linked Citi accounts. If you’re able to do that, though, you can still take advantage of many of the same perks offered to the premium Citigold® members.

You’re eligible to link your checking account with the Citi ThankYou® Rewards program. This account still waives all banking fees, and offers you discounts and waived fees off of investment products, loans, and lines of credit. And while you may not have an entire team waiting at your fingertips, you still have exclusive access to financial advisors to help you make investment decisions.

You can apply for a Citi Priority account online, over the phone or by visiting a local branch.

The Citibank® Account Package

Average account with above-average requirements

Checking account details:

  • Minimum opening deposit: $0
  • Interest rate: 0.01% APY
  • Monthly maintenance fee: $25
  • How to waive monthly maintenance fee: Keep at least $10,000 in linked Citibank deposit, retirement or investment accounts.
  • ATM fees: $2.50 for each non-Citibank ATM use, unless you have at least $10,000 in linked Citibank accounts.
  • ATM refunds: None
  • Overdraft fees: $10 per day when funds are transferred to cover an overdraft.

If you can’t meet the high minimum balance requirements of the Citigold® or Citi Priority account packages, you might consider the Citibank Account. You can enroll your account in Citi ThankYou® Rewards, and your first order of checks is free.

But, you’ll still need to keep a high account balance of $10,000 in linked Citibank accounts to avoid paying the high monthly fee. In return, you earn interest on this account, but it’s a miniscule 0.01% APY.

You can apply for a the Citibank Account in online, over the phone or at a local branch.

Basic Banking Package

A no-frills account—but watch out for high fees.

Checking account details:

  • Minimum opening deposit: $0
  • Monthly maintenance fee: $12
  • How to waive monthly maintenance fee: You can get out of the maintenance fee if you
        1. are 62 years or older
        2. make one bill payment from your account and one qualifying direct deposit into your account each month
        3. keep at least $1,500 in your checking and/or savings account
  • ATM fees: $2.50 for each withdrawal at a non-Citi ATM.
  • ATM refunds: None
  • Overdraft fees: $10 per day when funds are transferred to cover an overdraft.

This account is truly a no-frills version of Citi’s premium checking accounts. Not only does it not pay any interest or earn any Citi ThankYou® Rewards points, but you’ll have to watch out for high fees, as well. If you can’t meet the minimum deposit or age requirements, you’ll also be shelling out $12 per month for this austere account.

You can apply for the Basic Banking account online, over the phone or at a local branch.

Access Account Package

A high-fee checking account—that doesn’t let you write physical checks

Checking account details:

  • Minimum opening deposit: $0
  • Monthly maintenance fee: $10
  • How to waive monthly maintenance fee: There are three options:
        1. Keep at least $1,500 in your account
        2. Make a bill payment from your account
        3. Have at least one qualifying direct deposit into your account each month
  • ATM fees: $2.50 for each withdrawal at a non-Citi ATM.
  • ATM refunds: None
  • Overdraft fees: None

This is a bit of a bizarre account. In exchange for a slightly lower fee ($2 less), you can get basically the same thing as the Basic Banking account but without the ability to write physical checks. If all you need to do is pay bills online, this account might work for you — but as soon as you need to write a physical check, you’re out of luck with this account.

Besides, the requirements to waive the monthly fee are almost the same, though the Access Account lets you slide by with one fewer bill payment/direct deposit per month. If you meet the requirements to have the Access Account maintenance fee waived, why not at least upgrade to the Basic Account and the ability to write physical checks?

If you do decide that this account is right for you, you for a Citi Access account online, over the phone or at a branch.

How Citibank’s checking accounts compare

Citibank’s premium account packages (Citigold® and Citi Priority) offer a lot of perks by way of waived fees and free services. However, unless you have deep pockets, you’ll likely be limited to considering The Citibank Account, Basic Banking or Access Account. These accounts come with high monthly account maintenance fees unless you can qualify for one of the ways to waive these pesky fees.

All of Citi’s checking accounts — even the ones with the nice premium perks — offer very low yields, especially compared to high-interest checking accounts available elsewhere.

Citi® Savings

Generally lackluster interest rates on savings account packages

  • Minimum opening deposit: $100
  • Monthly maintenance fee: For Basic and Access savings accounts, an additional $4.50 monthly maintenance fee applies if they are not linked to checking accounts. For account packages with linked checking and savings accounts, the fee may be charged to the checking account (see above account package descriptions for details).
  • How to waive monthly maintenance fee: For Basic and Access savings accounts, maintain a $500 minimum balance in your savings account or open the savings account with a linked checking account. Requirements for getting maintenance fees waived on other account packages are listed above.

Citi Savings Account (for Citigold®, Citi Priority and The Citibank Account)

 

Annual Percentage Yield (APY) by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Promotional Interest Rate

0.10%

0.10%

1.00%

1.00%

1.00%

1.00%

1.00%

Standard Interest Rate

0.04%

0.04%

0.08%

0.08%

0.10%

0.13%

0.13%

*As of 1/3/2018

Basic Banking Package

APY by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Standard Interest Rate

0.04%

0.04%

0.06%

0.06%

0.06%

0.06%

0.06%

*As of 1/3/2018

Access Account Package

APY by Account Balance

<$10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000-
$499,999.99

$500,000-
$999,999.99

$1,000,000+

Standard Interest Rate

0.04%

0.04%

0.06%

0.06%

0.06%

0.06%

0.06%

*As of 1/3/2018

To qualify for the promotional interest rates offered with some of the packages, you’ll need to meet a few requirements. You’ll need to open a new savings account (within an account package) and fund it with at least $25,000. You’ll also need to be 18 years or older, and provide Citibank with a W-9 or W-8BEN. Unfortunately, these promotional interest rates only last for 90 days after you open your account, after which they revert to the much lower standard interest rates.

You can apply for a Citi Savings account online, over the phone or at al branch.

How Citibank’s savings accounts compare

Although Citibank offers good rates as high as 1.00% APY, it’s for a very short period of time and only if you bring a large amount of cash to the table and still meet other requirements.

Once the promotional period has passed, you’ll be left with piddly interest rates in account packages that may not meet your needs and potentially carry high fees to boot. If you’re looking for a low-fee and high-interest-rate savings account, you can do much better with other banks and credit unions like those in the roundup of the best online savings accounts.

Citibank CD Rates

Small earnings, but small early withdrawal penalties as well.

  • Minimum deposit amount: $1,000
  • How interest is calculated: Interest is calculated and paid monthly for CDs with terms longer than one year. For CDs with terms of one year or less, interest may be calculated and paid at maturity.
  • Early withdrawal penalties: For CDs with terms of one year or less, you’ll pay 90 days’ worth of interest. For CDs with terms of over one year, you’ll pay 180 days’ worth of interest. However, you can withdraw the interest at any time without paying a penalty.
  • When the CD matures: It’ll automatically renew for another CD of the same term length but with the current interest rate.
  • Grace period: After your CD matures and renews to another of the same term, you have seven calendar days to add or withdraw the funds penalty-free or change the CD to a different term length.

Citibank says that it offers different rates depending on which account package you open up a CD with. (That’s right — you can’t just go to the bank and open a CD. You need to have an existing account with them first.) But, as you’ll see below, the rates actually are the same for each type of account package.

CD Rates for Citigold® account holders

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

1.01%

1.01%

1.01%

1.01%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

0.25%

0.25%

0.25%

0.25%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of 1/3/2018

CD Rates for Citi Priority account holders

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

1.01%

1.01%

1.01%

1.01%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

0.25%

0.25%

0.25%

0.25%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of 1/3/2018

CD Rates for The Citibank Account, Basic Banking, and Access Account packages

CD Term

APY by Deposit Amount

Below $10,000

$10,000-
$24,999.99

$25,000-
$49,999.99

$50,000-
$99,999.99

$100,000+

3 month

0.05%

0.05%

0.05%

0.05%

0.05%

4 month

0.05%

0.05%

0.05%

0.05%

0.05%

5 month

0.05%

0.75%

0.75%

0.75%

0.75%

6 month

0.07%

0.07%

0.07%

0.07%

0.07%

7 month

0.07%

0.07%

0.07%

0.07%

0.07%

8 month

0.07%

0.07%

0.07%

0.07%

0.07%

9 month

0.10%

0.10%

0.10%

0.10%

0.10%

10 month

0.10%

0.10%

0.10%

0.10%

0.10%

12 month

0.15%

0.15%

0.15%

0.15%

0.15%

13 month

0.20%

0.20%

0.20%

0.20%

0.20%

18 month

0.25%

1.01%

1.01%

1.01%

1.01%

2 year

0.25%

0.25%

0.25%

0.25%

0.25%

30 month

0.25%

0.25%

0.25%

0.25%

0.25%

3 year

0.50%

0.50%

0.50%

0.50%

0.50%

4 year

0.50%

0.50%

0.50%

0.50%

0.50%

5 year

0.50%

0.50%

0.50%

0.50%

0.50%

*As of 1/3/2018

If you already have an account package with Citi and you’d like to apply for a CD, you can do so online, over the phone or at a branch. All you’ll need to provide is basic information about yourself (including your Social Security number), have a physical address in the United States, and have a valid form of ID.

If you have “issues with your credit history” or are depositing more than $100,000 into your CD, you cannot do so online or over the phone — you’ll have to go and visit a Citibank branch in person.

How Citibank’s CDs compare

Citibank offers very low rates on its CDs, especially compared to high yield CDs you can get elsewhere without having to mess around with account packages.

One clear advantage of Citibank CDs is that the early withdrawal penalties are relatively low. For example, the early withdrawal penalty on a five-year Citibank CD is 180 days’ worth of interest. Discover Bank — which offers much better CD rates — charges a whopping 18 months’ worth of interest if you withdraw the cash early from Discover’s five-year CD. However, Citi’s CD rates are so low, you’d be better off putting money in a high-yield savings account — the best ones offer rates higher than Citi’s CDs — and not worrying about early withdrawal fees. That wouldn’t necessarily be a good strategy in a falling-rates market, but since rates hit a historic low after the financial crisis, we’ve been in a rising-rates market.

Unless you a) already have an existing account with Citibank, b) don’t want to go through the hassle of opening a CD at another institution (it’s not hard, we promise), and c) think that there’s a high likelihood that you’ll withdraw the money early and don’t want to open accounts elsewhere, we wouldn’t recommend a Citibank CD.

Citibank banking IRA

Guaranteed low returns, especially when compared to equity investments

Citibank offers banking IRAs in two flavors: as CDs (with the rates listed in the section above), or as a money market account at an interest rate of 0.20% APY*. These rates are extremely low, especially when compared to higher-yielding IRA CDs.

In general, the returns on IRA CDs and money market accounts don't even come close to the kind of gains you need to be making while growing your retirement accounts, and Citibank's banking IRAs are no exception. For example, equities (i.e., stocks and bonds) earn average returns of around 7% per year — far higher than the piddly 0.50% APY that you can get in a best-case scenario with a Citibank CD.

In fact, the rates that Citi offers for banking IRAs are far lower than typical inflation levels (around 3% per year). This means that even if you opt for the highest rates that Citi offers, your money won’t even keep pace with inflation over time and you’ll be left with less and less each year (albeit at a guaranteed rate).

Overall review of Citibank

Although Citibank offers some great credit cards (such as the Citi® Double Cash Card and Citi® Simplicity Card), they fall short in the deposits department.

Citibank does offer some nice perks, such as some accounts being eligible for Citi’s ThankYou® Rewards program. The Citigold® and Citi Priority account packages come with features that can save you money and make your life easier, if you have the deep pockets required for these account packages.

All-in-all, while there are some bright spots to Citibank’s accounts, you can earn higher rates and pay lower fees at other banks and credit unions.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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Advertiser Disclosure

Best of

Best Checking Accounts With No Overdraft Fees

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Overdraft fees can be one of the worst bank fees to deal with. According to research by the Consumer Finance Protection Bureau, overdraft fees are typically triggered from smaller transactions – the median amount is $24 for debit cards.

When you factor in that the median overdraft fee is $34, you’re paying double what you intended!

If you’re tired of worrying about overdraft fees, we have five banks that offer a solution: they don’t charge overdraft fees, and many of them decline charges that would cause you to overdraft, so you’re not at risk for incurring a fee.

Bank of Internet USA: Rewards Checking

This rewards checking account from Bank of Internet has no overdraft fee or non-sufficient funds fee. Instead, charges are declined if you don’t have overdraft protection.

Overdraft protection is free to set up and use – it just requires you to link a checking account to an online savings or money market account.

In addition to having no overdraft fees, Bank of Internet is an excellent choice for a checking account because there are no maintenance fees, no minimum monthly balance requirement, unlimited ATM reimbursements, and free bill pay.

Fidelity Cash Management Account

Fidelity

The Fidelity Cash Management Account's tagline is “all the features you need from a traditional checking account, without the bank fees.” Fidelity holds true to this with no overdraft fees and no charge to use overdraft protection. Fidelity declines charges if there’s no overdraft protection in place.

To enroll in overdraft protection, you can link a savings or brokerage account to your cash management account. Funds will automatically be transferred to cover a pending transaction if you don’t have enough in your account. There’s no line of credit option.

Ally Bank – Interest Checking Account

 

Ally Bank

There is no overdraft fee when you have an Ally Interest Checking account if you have overdraft protection. You can enroll in overdraft protection by linking an Ally savings or money market account to your checking account. Funds are moved in increments of $100.

If you don’t have overdraft protection and go overdraft, you will get a once-a-day charge of $9. That means if you have more than one overdraft item in a single day, the most you’ll be charged is $9 – you won’t get charged a fee every time an overdraft occurs.

On the plus side, there aren’t any maintenance fees, there’s no minimum to open an account, and there are no fees incurred when transferring money to a non-Ally bank account.

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on Ally Bank’s secure website

Capital One 360 Checking Account

Capital One

By opening an overdraft line of credit with Capital One 360, you can borrow money against a set interest rate (currently 12.25% variable APR), and pay it back over time, rather than paying a flat overdraft fee. The maximum line of credit is $1,000.

For example, if you overdraw your account by $50, and leave it overdrawn for 5 days, you’ll only be charged $0.08, versus the average overdraft fee of $27.

You’ll know you’re in overdraft as Capital One 360 displays the negative amount you owe on your checking account balance, and they also send you an email alert. Check out the FAQ here.

In addition to this, Capital One 360 checking has no fees and no minimums.

Simple

Simple mobile bank

Similar to Bank of Internet, Simple’s checking account doesn’t charge for overdraft fees or returned item fees. There are no minimums, no monthly fees, and you get access to 55,000 fee-free ATMs.

Be aware that Simple is extremely mobile friendly. You can access most features (except its photo check deposits) from the web, but Simple recommends having a smartphone to use its mobile app.

Overall, Simple offers a different kind of banking experience, as it provides tools to help you manage your money. With its “Safe-to-Spend” program, Simple takes into account any upcoming bills or scheduled transfers you have, and does the math and tell you what you can afford to spend. You can also track your financial goals within its mobile app.

Multiple Fees in a Day

Overdraft fees aren't just a simple one-time charge at many banks. In fact, you could end up racking up more than $100 in fees (perhaps even $140) in a single day. Depending on bank policy, each overdraft charge will result in a fee with a maximum cap being three or four fees per day. If each overdraft fee comes at $35 and you don't max out until four charges, that's $140!

Best practice is of course to keep tabs on when you're dipping low in a checking account and could be going overdraft (or set up account alerts), but sometimes everything aligns against you and bills could be taken out of your account right when you're making a few purchases resulting in overdraft fees.

So, You Think You're "Protected"

Plenty of banks provide overdraft protection services to help provide support to customers who find themselves in an overdraft situation. The premise is simple: the customer links her checking account to her savings or money market account. If the checking account goes overdraft, then the bank automatically pulls money from savings to checking in order to cover the difference. Typically, the money is moved in increments of $50 or $100.

Sounds reasonable enough. Except what many banks charge for this protection isn't reasonable. This transaction costs the bank pennies on the dollar and yet some of the biggest banks charge $10 or more. You're still paying unreasonable fees, even with protection.

There are some banks and credit unions that offer a line of credit for overdraft charges, which provides a loan at a set interest rate instead of a flat fee. So, if you go overdraft you'll just be borrowing against your line of credit instead of getting smacked with a flat fee.

Ditch Overdraft Fees Forever

Overdraft fees are extremely expensive. Think about it – buying an item that costs $5, and getting hit with a $27 fee, isn’t fun at all. Incurring bank fees means your money is being thrown out the window. If you’re particularly prone to overdrawing your account, plug that leak by signing up with one of these five no overdraft fee checking accounts.

promo-checking-wide-v2

Erin Millard
Erin Millard |

Erin Millard is a writer at MagnifyMoney. You can email Erin at erinm@magnifymoney.com

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