Citibank rolled out a new relationship account this week called simply the ‘Citibank Account’ which permits customers to link all Citibank accounts, including credit card balances, to avoid monthly bank service fees. Under the new program, the minimum balance requirement of $6,000 will be based on the customer’s average holdings with the bank. The new ‘Citibank Account’ will now permit liabilities to be included as well as assets. Customers meeting the requirements will pay no monthly service charges, no per-check fees and no Citibank fees for non-Citibank ATM usage, regardless of the number and types of personal accounts they maintain with the bank. Additionally, ‘Citibank Account customers can qualify for higher rates on savings accounts and lower rates on many loans. Citibank customers will also now receive one monthly statement providing a detailed report on all linked accounts. Citibank says 90% of its NYC customers will qualify for lower bank rates under the new program.
Citibank today announced a new relationship account called the Citibank Account, which significantly broadens the types of accounts that its consumer customers can have linked together to achieve cost savings and other benefits under their Citibank relationship. For the first time, the new Citibank Account structure recognizes outstanding balances on most personal loans, including mortgages and credit cards, as part of the balance level required to avoid monthly service fees. Customers can also obtain higher rates on some savings accounts and lower rates on many loans, as they expand their relationships under the Citibank Account.
Citibank estimates that 90% of its customers in the New York metropolitan area will realize benefits from the new Citibank Account, through its simplified pricing, better rates and improved system for account management.
“The Citibank Account is the latest evolution of the relationship banking strategy we introduced to the New York market as early as 1980,” explained Stephen O. Huff, Citibank Vice President. “Since then, the strategy has been focused on making the Citibank relationship a more rewarding and convenient one for the customer. Over the years, we’ve provided easier and faster ways for our customers to manage their banking and personal finances, through our Citicard Banking Centers and Direct Access online banking service; more recently, we’ve eliminated electronic banking fees and many nuisance fees. And now, we believe the benefits of this new account structure reflect the high value we place on maintaining — and extending — the overall customer relationship.”
The ability to link a variety of accounts will also provide Citibank with a better overview of a customer’s financial situation and level of activity with the bank. This will make it possible for the bank to better anticipate customers’ financial needs, and respond with appropriate products and services at rates that reflect the extent of the customer’s relationship with the bank.
Simplified Pricing, Fewer Fees
Under the new Citibank Account, the minimum balance requirement will be based on a customer’s average holdings with the bank; this will now include liabilities as well as assets. Customers will be able to link balances on mortgages, credit cards and other personal credit lines and loans, with balances in Checking, Savings and Money Market accounts, brokerage accounts through Citicorp Investment Services*, and retirement accounts — all under one Citibank Account. This is designed to make it easier for banking account customers to meet Citibank’s minimum balance requirement and avoid monthly service fees. It will also better enable the bank to recognize a customer’s full relationship.
With the new Citibank Account, the minimum combined balance to avoid monthly service charges on a Checking or Money Market account will continue to be $6,000; but will also replace many of the bank’s other previously existing minimum balance requirements. In addition, the Basic Banking account will continue to be available to customers with limited transactional needs.
Under the Citibank Account’s simplified fee structure, those customers whose total holdings meet the minimum balance requirement will continue to pay no monthly service charges, no per-check fees and no Citibank fees for non- Citibank ATM usage, regardless of the number and types of personal accounts they maintain with the bank.
Those customers who do not meet the minimum balance requirement will now pay only one monthly service charge, regardless of the number of other accounts they maintain with the bank. That service charge will be $9.50 for Regular Checking customers and $12.00 for Interest Checking customers. Terms and fees for the Basic Banking account also remain unchanged.
Better Rates on Deposits and Loans
In addition to eliminating or minimizing many fees, the Citibank Account will also enable customers to obtain better rates on some deposits and lower rates on new loans and lines of credit. Interest rates on these types of accounts will now be based on combined balance ranges, automatically qualifying some customers for higher rates on Citibank’s Savings accounts and lower rates on many types of loans.
“We have always placed great value on those customers who maintain a variety of accounts with Citibank, ranging from checking to credit cards to mortgages,” continued Mr. Huff. “Now, with the Citibank Account, we can recognize and reward these extended relationships with better pricing and rates, which we think will lead to even deeper relationships going forward.”
Easier Account Management
The fact that many different types of accounts are now linked under a single Citibank Account makes it possible to provide customers with a simplified account management system. Under the new Citibank Account, customers will receive one monthly statement, providing a detailed report on all linked accounts. The new monthly statement provides a quick snapshot of general account holdings — checking, savings, investments, loans and credit cards — as well as information on all account holdings and transactional activity over the last thirty days.
Additionally, once a Citibank Account has been established, the process for expanding the relationship has been simplified. The customer information required to open the original account is kept on file and functions as the source of customer information on all new and existing linked accounts. To open a new account, only information specific to that new account needs to be provided. For example, to open an Insured Money Market Account, the customer need only indicate the amount to be invested. Citibank Account customers can open additional accounts 24 hours a day, seven days a week, either at a Citibank branch or through CitiPhone banking.
The new Citibank Account structure will go into effect in February 1998, and will be reflected in the new integrated customer account statements mailed during that month. Those customers who see changes in their monthly fees will be contacted by Citibank personal bankers in the following months.
Citibank is a subsidiary of Citicorp (NYSE: CCI), a global financial services organization serving consumers, businesses, governments and financial institutions through 3,200 locations in 98 countries and territories. In the metropolitan New York area, Citibank serves customers and small businesses through a network of 217 branches.
* Securities transactions are through Citicorp Investment Services, member NASD/SIPC, and a subsidiary of Citibank. Investment products are not obligations of or guaranteed by Citibank or Citicorp Investment Services, are not bank deposits or FDIC Insured and are subject to investment risks, including possible loss of the principal amount invested.
The new Citibank Account will include all of the following accounts when calculating a customer’s average monthly balance:
– Regular Checking
– Interest Checking Savings Accounts
– Money Market Accounts
– Passbook Savings
– Day-to-Day Savings
– Citibank CDs Credit Cards
– Citibank Visa*
– Citibank MasterCard* Loans
– Personal Loans
– Equity Source Accounts*
– Preferred Lines/Loans
– Checking Plus*
– Mortgage Loans
– Ready Credit*
Citicorp Investment Services Brokerage Accounts**
– Mutual Funds
– Treasury Bills
– Other Securities
– Keogh Plans
** Securities transactions are through Citicorp Investment Services, member NASD/SIPC and an affiliate of Citibank.