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Any experience with Citi High Yield Savings?

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  • Any experience with Citi High Yield Savings?

    I saw that Citi high yield savings is 2.05%. I’m currently using purepoint with 1.8. Any thoughts on Citi?

    also, what do you do when your balance is above the FDIC insured value? Open another account?

    thanks!

  • #2
    I am by far not the most experienced person with this but in the short time that I've been paying attention to these things I have noticed that different banks and institutions take a lead on interest for a few months and then somebody else replaces them. every three months or so you could transfer to a different institution that just does not seem worth it in my mind. unless for some reason you were holding a tremendous amount of cash the difference in interest would be quite minimal anyway.

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    • #3
      I'm in the same boat as Lordosis . It seems like there has been a new bank every week over the last few years that has the highest rate. I just pick one I'm comfortable with and pretty much just go with it.

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      • #4
        True. Good point. I guess I’m asking because we have a tremendous (>400k) amount of cash since we are saving for a home and keep a 12 month e-fund. Yes, I understand that we probably shouldn’t hold that much but not what what else to do since we will be gettin home in the next 12-18 months.
        2.05 vs 1.8 is significant

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        • #5
          All that cash drag is costing you far, far more than a 0.25% difference in interest rates. If you calculated how much that cash could have made in 2019, you'd probably want to throw up (too late now though). I'd suggest your energy is better spent figuring out how much of a downpayment you really need and how to invest the rest. And if you have all that saved up, why are you waiting 12-18 months to buy?

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          • #6
            I have my holdings in VUSFX. Held to maturity so interest rate risk is low. Mix of high grade corporate and government very short term bonds.

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            • #7
              Originally posted by WorkforFIRE View Post
              True. Good point. I guess I’m asking because we have a tremendous (>400k) amount of cash since we are saving for a home and keep a 12 month e-fund. Yes, I understand that we probably shouldn’t hold that much but not what what else to do since we will be gettin home in the next 12-18 months.
              2.05 vs 1.8 is significant
              That's $1000 pre-tax over the course of a year. If you're here than I assume $1k will be inconsequential over the course of your financial life but I also understand wanting to maximize opportunities. Citi is a large financial institution so the money will be as safe there as anywhere. I guess my question is at what point do you stop chasing interest rates? Citi may lower their rate down to 1.8% next month. Are you going to search for another account at that point?

              Also, I hope that $400k represents a large portion of the house price and not a standard down payment.

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              • #8
                E*TRADE probably has a deposit bonus that would result in better overall yield. Transfer funds there and buy Vanguard money market
                my radiology group is hiring, pm if you can do msk and are interested

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                • #9
                  I have AMEX high yield for my emergency fund and it seems to bump up when another bank comes out with the latest and greatest deal so I've been happy just sitting tight. You could always do one for you and one for spouse. When I was saving for a house downpayment and got close to the FDIC max I start adding to VTSAX with the understanding that the anticipated higher return was also at a higher risk of loss. Having more than $250,000 in a savings account made me more anxious than the thought of the market tanking around the same time I was ready to buy the house.

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                  • #10
                    I use Citi for one of my High Yield Savings accounts. I have had no problems at all with them. And I do have a couple of different High Yield Savings accounts with different companies. For two reasons. 1.) To not go over the FDIC insured limit,. 2.) For convenience in separating the funds. For example, I use Citi for my "Taxes" Savings account. I am self-employed and must pay quarterly taxes and also save up in case I owe tax at the end of the year. I might as well have it making a little interest. I have another at Ally for our Emergency fund.

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