Critical Changes To The Citibank MaxiGain Savings Account You Must Know

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.

Diagram 1: Probable Interest Rates From Popular Savings Accounts Reviewed

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.

Diagram 2: Check your STEP-UP counter from your latest bank statement

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.

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