Citibank is currently offering 5% APY, as of July 7, 2006, on their Citibank Direct e-Savings Account. On the spectrum of interest offered for online savings accounts, this is near the very top, and rose from 4.75% from just four days ago.
The account requires no minimum
balance, allows free online bill payment, online fraud protection, free
wireless alerts, and 24 hour access to money. (Of course, fraud
protection and 24 hour acccess should be something every online savings
account offers.) The e-Savings account also offers free Citibank EZ
Checking and the ability to view statements online.
The fine print adds that the e-Savings account has to be linked to a qualifying account and both must be set up online. You cannot set up at Citibank Financial Centers. Qualification requirements include simultaneously applying for a new regular checking account before Dec 31, 2006. The latter account may incur fees, but the online savings account will not. The interest rate is subject to change. If you do not link to it with a qualified checking account, you earn the same interest as the Citibank Day-to-Day account, which is presumably pretty low.
The maximum deposit allowed is $250,000, and as is the case for all US bank accounts, is insured by the FDIC for up to $100,000 per single-person accounts. Joint accounts are insurable up to $200,000.
For more details, check the FAQ, accessible from their Learn More web page.
Overall, the Citibank Direct e-Savings Account seems to be one of the better choices, although they do not state monthly fees for their qualifying checking account. (At least not on their Citibank Direct web pages.) You cannot, however, link to the account from other banks. Compare the Citibank terms and conditions with online savings accounts for Ing Direct, Emigrant Direct, or HSBC Direct. At the time of this writing:
- Emigrant Direct currently pays 5.00% APY and has no minimum balance requirement and no setup or monthly fees. You can link up to two accounts to their online savings account.
- Ing Direct similarly has no fees, currently pays 4.35% APY, and allows up to three other accounts to be linked to their online savings account.
- HSBC Direct offers 5.05% APY and has no fees, service charges, or minimum balance requirements. You can only link one bank account to the online savings account, with transfer preference given to an existing HSBC checking account. That is, transfers between their online savings account and accounts at other banks may take longer.
These three are amongst the most flexibile online savings account offerings, and have the least string. Note that their terms and interest rates may change by the time you read this.
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