When Heartland Boy was researching for his Article titled “How To Get The Highest Interest Rates On Your Bank Savings Accounts”, the Citi MaxiGain Savings Account kept popping up. It seems to be a savings instrument that is highly recommended online. It was even mentioned by his peers during one of his poker sessions. In addition, current customers only to seem to have rave reviews about it. These certainly got his interest piqued. After spending time to research and understand the product better, Heartland Boy decided to open a Citi MaxiGain Savings Account recently. He thinks this is analogous to planting a seed today so that he can rest under a tree’s shade in the future.
How The Citi MaxiGain Savings Account Works
The interest rate for The Citi MaxiGain Savings Account is a sum of 2 types of interests- Base and Bonus.
1) The Base interest is pegged at 80% of the 1-month Singapore Dollar Interbank Offer Rate (1-month SIBOR). It is applied to the first $150,000 in the Citi MaxiGain Savings Account. For balances in excess of $150,000, a very miserable 0.05% Base interest rate is rewarded instead.
2) The Bonus interest starts from 0.0% p.a. (Counter 0) and increases by 0.1% per month if certain conditions are met. For the Bonus interest to progress to the next Counter, the account holder must ensure that the lowest daily balance in the current month is equal to or higher than the lowest balance in the preceding month. In more layman language, as long as no withdrawals are made, you will be safe to know that the requirement is definitely met. Unfortunately, the Bonus interest is capped at 1.2% though. Therefore, if all conditions have been met, Bonus interest stops increasing after the 13th month has passed. Unlike the Base interest, there is no maximum balance that can be paid the Bonus interest.
*Pegged to a constant 1-Month SIBOR of 1.375%
** Assume the conditions are met
Base interest for the month will be paid on the last day of the month itself. It will be applied to the Daily Balance for the month. On the other hand, Bonus interest for the current month will be paid on the last day of the following month. Bonus interest is applied to the Lowest Balance of the month. Readers should refer to Citibank’s official website and try out its online interest rate calculator and also understand the full terms and conditions.
What Makes The Citi MaxiGain Account So Popular
1. Citi MaxiGain A High Yield Savings Account
Given that 1-Month Sibor is 1.37% as at 15 April 2018, the base interest rate for Citi MaxiGain Savings Account would be at 1.1%. Coupled with a 1.2% bonus interest rate (counter 12), the total interest rate that some account holders are enjoying now would be a very attractive 2.3% per annum. In comparison, this is significantly higher than its competing products such as the CIMB FastSaver and the UOB Stash. This makes Citi MaxiGain one of the best savings accounts with limited requirements in Singapore.
In addition, the fact that it is pegged to 80% of 1-Month SIBOR means that the Citi MaxiGain Savings Account essentially becomes a good hedge against rising interest rates. If you have a floating interest home mortgage pegged to SIBOR, knowing that you are partially hedged in a rising interest-rate environment can offer some form of comfort.
2. The Maximum Cap Is One Of The Highest
Up to $150,000 deposited in the Citi MaxiGain Savings Account enjoys both the base and bonus interest rates. When compared to the competition, that is a very high ceiling accorded. While Heartland Boy does not have this amount of spare cash lying around presently, he does not rule the possibility of this happening in the near future. Or like what his father likes to think, he is only 1 4D draw away from changing his life.
3. Easy To Earn The High Interest Rate Of Citi MaxiGain
Citi MaxiGain Account makes it easy to earn the high interest rate that it advertises. To prevent incurring a fall-below fee with regards to the Total Relationship Balance, the minimum amount is $15,000. Subsequently, the account holder can leave the Citi MaxiGain savings account idle and return to find that the bonus interest would have reached counter 12 at the end of the 13th month. Other requirements such as salary crediting, credit card spend, bill payments etc are all not required. In other words, the conditions are minimal.
4. Citi MaxiGain Can Function As A Joint Savings Account
This is a very suitable product for young couples who would like to open a joint savings account together. With the high interest rate and high savings ceiling of $150,000, it is appropriate to prepare couples for future big-ticket items such as a wedding reception, home renovation or preparing for their first born. Having a partner to work towards a common financial plan can be one of the most powerful motivations out there. Do note that the calculation of the Total Relationship Balance for joint account is separate for the account holders.
Tips To Maximise The Interest Rate On Citi MaxiGain
1. Deposit Your Savings Near The End Of The Month
Given that there is no bonus interest offered during the 1st month, you may like to open the Citi MaxiGain Savings Account towards the end of the month. This is to minimise the opportunity cost of your money. Along the same vein, if you like to make periodic top-ups to your Citi MaxiGain Savings Account in the future, you may like to do so near the end of the month. This is because Bonus interest for the current month is only applied to the Lowest Balance of the preceding month.
2. Get Ready $15,000 During Account Opening
While the minimum balance required for the Citi MaxiGain Savings Account is only $10,000, the minimum threshold for the Total Relationship Balance is set at $15,000. Therefore, for those clients who do not have existing banking relationships with Citibank, it is recommended to deposit S$15,000 on Day 1 to circumvent the fall below fee. Heartland Boy emphasises Day 1 because he has read on some forums with regards to the difficulty faced by some online users when it comes to account opening. Therefore, if you are bringing a cheque, make sure it can be banked in on the same day. If not, bring cash.
3. The Optimal Withdrawal Rate
While stepping up and progressing towards the next counter could be analogous to climbing stairs, failing to meet the requirements for Bonus Interest is equivalent to taking a tumble. That is because if any of the daily balance for the month falls below the lowest daily balance of the previous month, the Counter decreases as shown below.
From the way the Bonus interest rate is structured, it incentivises account holders not to withdraw the deposits. Therefore, the Citi MaxiGain product is perfect for someone looking to stash away some emergency cash. However, should an unexpected rainy day arrive, do note that there is a form of safety net for the Bonus interest. As shown in Table 2, if the account holder has reached a minimum of Counter 6 (where the applicable bonus interest rate is 0.6%), the Bonus interest will not reset to zero (Counter 0) anymore even if the required conditions are not met. Instead, it will remain at 0.6%, thereby serving as a form of safety net.
How To Apply For The Citi MaxiGain Savings Account
To apply for the Citi MaxiGain Savings Account, one would have to head down to a Citibank branch. If you are depositing $70,000 to become a Citibank Priority client, you can quote a family member or a friend of yours as your referee. The referee gets $100 cash as referral fee under the Citi Customer Referral Programme. This is one of the ongoing promotions available in 2018.
Heartland Boy thinks the Citi MaxiGain Savings Account is well worth the hassle of going down to Citibank’s branch because you are planting a seed for a tree in the future.