Citibank offers a range of certificate of deposit terms from three months to five years. This allows you to save toward a variety of expenses, whether short term or long term. However, you really won’t see much in terms of growth with a Citibank CD. The bank’s rates are pretty low across the board. Even the longest term of five years, which will typically have the highest CD rate, earns at a rate below 1%.
Interestingly, your minimum deposit will depend on the state you live in. Most accounts will require a $500 minimum deposit. However, accounts opening in California and Nevada must be opened with at least $1,000. If you open an account in Florida, Maryland, Virginia or the District of Columbia, you’ll need at least $2,500.
If you want to deposit more than $10,000, you’ll need to visit a Citibank branch to do so.
|Certificates of Deposit||Minimum Deposit||APY|
Overview of Citibank CDs
With such a variety of terms available, Citibank CDs are perfect for creating a CD ladder. CD ladders allow you to save towards any short- and long-term goals while also creating a semi-steady income stream. To build a CD ladder, you open multiple CD accounts at the same time, each with a different maturity date. That way, an account will mature and you receive a payout every few months or so depending on how you build your ladder.
The end of a CD term is when the account reaches maturity. Once your account matures, you don’t have to take any action to allow it to automatically renew for the same term. If you want to make any changes, you have a seven-day grace period to make any withdrawals or additional deposits or change the term length.
As is the case with any standard CD, this grace period is the only time you can make a withdrawal of principal from the account. Making an early withdrawal from a Citibank CD with a term length of one year or less will trigger a penalty of 90 days’ worth of simple interest. Accounts longer than one year assess an early withdrawal penalty of 180 days’ simple interest.
How Much You Earn With Citibank Certificate of Deposits Over Time
If you’re expecting high earnings across the board, you won’t find that with a Citibank CD. Your best bet is to open a long-term CD, like a 5-year CD, and make a pretty big deposit. That way, you’ll have the highest CD rate the bank offers and you’ll be giving the account more money to grow with that rate. Otherwise, you’ll see a few cents or dollars over the course of the CD term.
Citibank compounds interest daily, which is the most efficient way to earn interest. This means that your deposit starts earning interest the day you make the deposit. Then that larger amount earns more interest the next day, that new amount earns interest the following day and so on.
The figures below represent what your final balance would look like at maturity according to different terms and initial deposits.
|Initial Deposit||7-Month CD||12-Month CD||3-Year CD||5-Year CD|
Compare Citibank to Other Competitive Offers
How Citibank CDs Rates Compare to Other Banks
Citibank is one of those big banks that doesn’t offer the best rates on its bank accounts. Very few of its accounts earn higher than 1%. This is due to the cost of maintaining its brick-and-mortar branches throughout the country. While this offers some banking convenience, it doesn’t offer big savings. Chase is another example of a big bank with small interest rates. Its standard rates, shown below, fall even lower than Citibank’s.
You don’t have to be stuck with these rates, though, if you’re willing to open an account with an online bank. Two banks with some of the best CD rates out there are Marcus by Goldman Sachs and Ally Bank. Marcus also requires a $500 minimum deposit but grows that deposit at much better rates than Citibank.
Ally Bank doesn’t require a minimum deposit, opening up its high CD rates to a wider customer base. You can, however, potentially secure a higher rate with higher balances since Ally earns according to balance tiers. Ally also offers three different CD account types with varying perks and benefits, but all with competitive interest rates.
Another option is to check out the credit unions you might be able to join. As smaller institutions, credit unions typically offer much more favorable interest rates for bigger savings.
|CD Account||Citibank||Chase||Ally||Marcus by Goldman Sachs|
Should You Get a Citibank CD Account?
Due to the lackluster rates, Citibank CD accounts only really make sense for existing Citibank customers. The rates themselves aren’t high-earning enough to seek out. Plus, it will be easier to open a CD account when you’re already a customer with the bank as opposed to being an entirely new customer.
If you planning to open a CD account, you have a number of other options available out there with better rates and lower minimum deposits.