Citibank Maxigain‘s Savings account had been a little known secret (see article in Nov 2018), where you can tuck away unused cash for a relatively high interest rate (better than fixed deposit yo!), by simply… doing nothing at all! The above formula is important for you to understand the discussion below.
Come 2 Jan 2019, there will be some changes that may impact some of us, so read on!
- Base interest will be reduced from 80% to 70% of 1 month Sibor
Instead of 80% of 1 month Sibor, the base interest rate will be reduced to 70% 1 month Sibor – which isn’t that bad if Sibor continues to rise… but those with outstanding mortgage loans will suffer as we end up paying more during our monthly instalments. Citi’s 1 month sibor is still 1.52% for 1 Nov (Dec one not out yet), so this rate is still pretty decent.
2. Minimum sum required to earn base interest has gone up from $10k to $70k
This will be the part that may affect most people. Citibank has a requirement of a minimum balance of $15k to avoid a monthly $15 account service fee. Now, for you to earn the base interest, you will require a minimum end-of-day balance of $70k whereas this was $10k previously. Now, you may have to rethink if you need to pool your money together.
3. Bonus interest rate limited to $150k
The above is a screenshot taken from Citibank’s Maxigain website. As you can see, there was a cap of $150k on the base interest rate, but there was no mention of a cap on the bonus interest rate. Now, moving forward, this $150k cap will be imposed on the bonus interest rate as well.
For those who have $150k sitting around and have no need to use this sum of money in the near future, then the changes will be very minimal – prob just a 0.15% drop in terms of interest rate. However, those with less than $70k in their accounts should consider topping up their accounts to ensure that they continue to earn the base interest, and for those who have committed to this savings account, try not to remove the money inside unnecessarily, as any reduction in account balance will mean that the Step-up counter will drop – and this will be quite drastic from 12 to 6 if you are already maxed out! You can also look it another way and treat it like a fixed deposit, where you should put the money away and try not to take it out or else suffer a loss in terms of deposit.
If you are interested, do sign up through this link here and you may receive a bonus $750 if you sign up with a balance of $70k or more.