Citibank MaxiGain Savings Account has often been touted on forums as a high-yielding bank account in Singapore that does not require account holders to do anything to achieve a very high interest rate. However, there is a famous saying that all good things must come to an end. That is exactly what’s going to happen to the best savings account in Singapore come 2 January 2019. Let’s not waste time and get straight into the critical changes to the Citibank MaxiGain Savings Account that you must know.
1. Base Interest Rate Is Now Pegged At 70% of 1M-SIBOR
When Heartland Boy first reviewed the Citi MaxiGain Savings Account, Base Interest Rate was pegged at 80% of 1-Month SIBOR. In April 2018 when the article was first published, SIBOR was 1.375% then. Today, the 1-Month SIBOR has increased to 1.64%*. In an environment of rising interest rates, decreasing the peg is indeed disappointing news to all account holders. Rumour has it that the Citibank MaxiGain Savings Account is getting so popular that it has become the bane of the Citibank’s Relationship/Wealth Managers. That is because its high yield meant that they have a very hard time peddling other wealth products!
2. Daily Ending Balance of $70,000 Required To Earn Base Interest Rate
To earn the Base Interest Rate mentioned in Point 1, a minimum daily ending balance of $70,000 is required! This is a significant increase from the previous $15,000. This is a huge cash call of $55,000. Unless you have cash lying everywhere in your house, it is going to be tough to meet this shortfall in such short notice.
3. Bonus Interest Rate Limited To First $150,000
Previously, there was no cap on the amount of deposits that can earn the Bonus Interest Rate. With this round of changes, only the first $150,000 in your Citibank MaxiGain Account will be eligible to earn the Bonus Interest Rate. (Recall that Bonus Interest Rate ranges from 0% to 1.2% as it is dependent on the counter you are at and is applied to the preceding month’s lowest balance) This change should not be too much of a dampener as Heartland Boy does not encourage anyone to deposit more than $150,000 in the Citibank MaxiGain Account in the absence of Base Interest Rate. Now that the Bonus Interest Rate has also been removed, Heartland Boy thinks the case is even more clear-cut; there are simply better alternatives out there in the market for your deposits in excess of $150,000.
To get familiarised with the concept of lowest balance and daily account balance, readers can refer to the revised terms and conditions.
Thoughts On The Changes
It is patently clear by now that ALL the changes announced by Citibank are negative to account holders. It has made the Citibank MaxiGain Savings Account a significantly less competitive product. In fact, they don’t even bother putting out any sweetener to sugar-coat the changes. This definitely highlights a few things:
- Demand for the Citibank MaxiGain Savings Account is probably so overwhelming that the bank has already reached its KPI
- Perhaps the rumour is true, Citibank needs to protect the ricebowls of its wealth managers
Speculation aside, the more pertinent question should be “What’s next for me?” Heartland Boy has tabulated a summary of interest rates offered by various popular bank savings accounts so that readers can compare and decide accordingly.
Where To Park Your Money Now?
Given the litany of changes made to various bank savings accounts in 2018, here is an updated table to illustrate the likely interest rates that you can achieve.
A quick public service announcement: OCBC is running a limited-time promotion by temporarily increasing the interest rate for salary crediting from 1.5% to 2.0% for deposits ranging from $35K to $70K. Based on the online calculator, this improves the overall blended interest rate to 2.5% from 1 Dec 2018 to 31 March 2019.
With UOB One Account and OCBC 360 Account both calling for more cash for account holders to attain higher interest rates, just like any heartlander, Heartland Boy is clearly feeling cash-strapped at this moment. In a rising interest rate environment, it is clear that every bank is hungry for your money. Unfortunately, Heartland Boy is clearly facing the issue of Money Not Enough.
After analysing his latest bank statement, Heartland Boy realises that he will be on Counter 8 (8 Step-Up) entering January 2019. With this piece of information, here is his savings plan entering 2019.
By May 2019, he will most definitely have moved $55,000 from his UOB One Account into the Citibank MaxiGain Savings Account to meet the requirement to earn Base Interest Rate. Judging by current SIBOR rates, his savings in Citibank Savings Account will earn a cool 2.34% in interest rate. This transfer may even take place earlier if 1-M SIBOR increases such that the interest rate offered by Citibank MaxiGain Savings Account becomes superior to UOB One Account. He still believes in patiently building up the counter for his Citibank MaxiGain Savings Account and will not abandon his efforts halfway.
For those who are curious, here is the website from the Association of Banks In Singapore to find the most updated SIBOR rates.
*This article is published on 8 December 2018.
For those who would like to apply for the Citibank SMRT Credit Card, Citi Prestige Card or the Citibank Cash Back Credit Card, you may consider using my affiliate links. Alternatively, if a personal loan is what you require, you may consider applying it from Citibank too. Thank you!
Thanks for sharing, it’s on their website now. Just curious, do you know what is the base interest if I only put in a minimum amt of S$10,000? I can’t find it in their FAQ
Before 2 Jan 2019, base interest is calculated at 80% of 1M SIBOR. It is applied to the first $150K, so you will earn it with min amt of $10K deposited.
After 2 Jan 2019, base interest is calculated at 70% of 1M SIBOR. A minimum 70K must be deposited to earn the Base Interest.
I strongly encourage you to put in at least $15K to prevent incurring a fall-below fee.
hi Alison, does it mean that if I put in S$15K I will not earn any interest at all?
No, you will earn Bonus Interest Rate. Bonus interest rate ranges from 0% to 1.2% depending on the counter you are at.
Hi Alison, I called Citibank to clarify and was told that there will not be any base nor bonus interest if the balance is $70K. The first step up will only start from S$70K hence it doesn’t work for us to leave minimum balance for 12 months. So sad to hear this.
I am quite sure the CSO is wrong. Pls see Q4 of FAQ from its website. (https://www.citibank.com.sg/global_docs/pdf/FAQ.pdf)
My understanding is that the max base interest we would get is 0.8% + 1.2% after 12months. In total, we can only get max of 2% from Citibank Maxigain account. May I know if I am right?
You only got part of the formula correct. The correct formula to derive the maximum interest rate (from 2 Jan 2019 onwards) is:
0.7%(1M-SIBOR) + 1.2%
You can tell that the unknown quantity is 1M-SIBOR which may/may not fluctuate.
Hope this helps!
Hihi will there be early ac closure fee? Thanks!
I think a $50 fee is applied if an account holder closes within 6 months of opening the account.
Besides the $50 early account closure fee, is there any other fee or any minimum remaining balance when an account holder want to close the account after 6 months / decided to withdraw all amount in the case of emergencies ?
After 6 months, you can withdraw all monies and close the account. no penalty
If the account remains open and your total balances with Citibank falls below 15K, there will be a $15 monthly account fee.
The clear advantage of putting money in UOB One Account and OCBC 360 is that there is no penalty for withdrawing the money, and it does seem like a better place to stash the bulk of your cash! (There’s always hope that UOB and OCBC will increase their interest rates too)
You are right. Those 2 accounts still serve me well. But i dont have enough cash to maximise those 2 + Maxigain 😀 It is unlikely UOB and OCBC will increase rates because they just changed their requirements and interest rates not too long ago.
Get C says
What happens after 12 months ?
Can you provide more detail to your question?
I thought that the max interest that you can earn is 2.2%? The variable rate of 70% of sibor is cap at max of 1%? This was what I was communicated to previously so even if sibor heads to the sky, account holders will not benefit from the additional interest?
I think you can see from this thread that forummers are getting more than 2.2% (https://forums.hardwarezone.com.sg/money-mind-210/citibank-maxigain-savings-account-5311537-9.html) I have read the t&C, there is no cap on base interest, which is a function of 70% of sibor
“The Bank shall pay you a base interest rate (“Base Interest Rate”) at 70% of the 1 month Singapore Dollar Singapore Interbank Offer Rate (“1 month SIBOR”) on your daily balance, up to the first S$150,000 in your MaxiGain account. For example, if 1 month SIBOR is 1.43% p.a., the Base Interest Rate shall be 1% p.a.
The 1 month SIBOR for 16 October 2018 was 1.5164% p.a. for your reference. If the 1 month SIBOR is 0% p.a. or lower, the Base Interest Rate shall be zero.
A Base Interest Rate of 0.05% p.a. shall apply to balances in your MaxiGain account in excess of S$150,000.
You need to maintain a daily end of day balance of at least $70,000 in your MaxiGain account to earn interest. Interest at the Base Interest Rate will accrue daily, if you maintain at least S$70,000 in your MaxiGain account, based on the daily end of day balance and will be paid on the last day of the month.