Citi Wealth First Account Review: Is This High Interest Savings Account Worth it?

The fallout from COVID-19 has been brutal for savers; as banks in Singapore have slashed the interest rates on their savings accounts.

Amidst this low-interest-rate environment, Citibank Singapore is offering a new product aimed at helping customers grow their wealth.

The new Citi Wealth First account is the latest savings account from Citibank that lets you earn bonus interest when you spend, invest, insure borrow and save.

But, is this account worth it for you?

Here is everything you need to know!

Like most high-interest savings accounts, the Citi Wealth First account starts with a sad base interest rate of 0.01% per annum (p.a.). on the average daily balance (ADB) in your account at the end of each month.

But at least you get to enjoy the base interest rate on the full balance in your account with no cap.

Citi Wealth First Account Bonus Interest Rate Categories

The fun starts when you perform any of the qualifying transactions in the following categories with Citibank.

Do note that the bonus interest rates are an additional rate on top of the base interest rate.

Spend Category:

To qualify for the bonus 0.2% p.a. interest on the ADB in your account for the Spend category, you will need to do the following.

Spend at least $250 per month on any of the Citibank Debit Cards held by the Primary Account Holder of a Citi Wealth First Account.

Invest Category:

To qualify for the bonus 0.8% p.a. interest for 12 months on the ADB in your account for the Investment category, you will need to do the following.

To qualify for this category, you will need to purchase either a Unit Trust, Structured Notes, and/or Bonds of at least S$50,000, or multiple lump-sum investments aggregating to at least S$50,000 in a month.

To qualify for the bonus 0.8% p.a. interest for 12 months on the ADB in your account for the Insurance category, you will need to do the following.

Purchase a new insurance policy with a single premium of at least S$50,000 or multiple insurance policies with aggregated single premiums to at least S$50,000 in a month.

Do note that in order to enjoy the bonus interest for the insurance category, you cannot cancel your insurance policy during the free-look period.

Also, policies purchased using Central Provident Fund (CPF) Savings or Supplementary Retirement Schemes (SRS) are excluded.

Borrow Category:

To qualify for the bonus 0.8% p.a. interest for 12 months on the ADB in your account for the Home Loan category, you will need to do the following.

Take up a new home loan (excluding interest offset home loans) of at least S$500,000.

Do note that this excludes mortgage loans with interest offset features and overdraft facilities.

Save Category:

Last but not least we have the Save category where you get to enjoy 0.2% p.a. interest on the incremental ADB.

To enjoy this interest there needs to be an increase in your account’s ADB from the previous month’s ADB of at least S$3,000.

Do note that interest will only be paid on the incremental ADB. This is the difference between the ADB for the current month and ADB for the month before when the Save criteria is met. 

To calculate the average daily balance, the bank takes the total amount of daily balances in your account and divides that amount by the total number of days in the month.

To illustrate this let’s use this example.

John has an ADB of S$57,000 account in August 2020. He will need to put in S$3,000 in his account to bring up the ADB to S$60,000. If he does take out any money, he will have to replenish the amount he takes out.

Account Average Daily Balance (ADB) Cap

In addition, there is a cap on the amount that earns interest in your account based on your banking relationship with Citi:

For Citibanking and Citi Priority members, you will only enjoy interest on the first S$50,000 of your account’s ADB and incremental balance.

For Citigold and Citigold Private Client members, you will need to maintain a Total Relationship Balance (TRB) of:

• S$250,000 for Citigold
• S$1.5 million for Citigold Private Client

to earn in interest on the first S$100,000 and first S$150,000 respectively.

FYI: TRB refers to the sum of:

(i) the average daily balance of your checking, savings and deposit accounts,
(ii) the average daily value of your investments, and
(iii) all outstanding amount(s) payable on your secured loan accounts as of the date of your last statement.

How is The Interest is Credited?

For the Spend category, interest the bonus interest will be credited one month after the posting date.

For the Protect, Invest, and Borrow categories, the bonus interest will be credited one month after Settlement Date for 12 months.

For the Save, category bonus interest will be credited one month after the saving date. Also, the bonus interest is not applicable for the first month of account opening.

To calculate how much bonus interest you can earn, you can head on over to the Citi Wealth First website.

Terms and Conditions

This savings account is covered under the deposit insurance scheme where:

For more information, do refer to the terms and conditions for this account.

Is the Citi Wealth First Account Worth it?

Now that you know more about the account, let’s evaluate to see if this account is worth it.

But to illustrate how much interest you can earn, I will use ‘John’ as an example to show what you need to minimally do to enjoy the full 2.8% p.a. interest.

John has S$50,000 in his account. To enjoy the full 2.8% p.a. interest rate he will have to:

• Spend $250 monthly on his Citibank Debit Card.
• Invest S$50,000 on either a unit trust, structured notes, and/or bonds.
• Take up an insurance policy or policies with premiums of S$50,000.
• Take up a home loan and borrow at least S$500,000.
• Increase the ADB of his account by S$3,000.

Through this example, it is clear that to enjoy the maximum bonus interest of 2.8% p.a.; there are a lot of hoops to jump through.

More realistically, I would think that the average working adult with find it hard to meet all of these categories

We looked at a typical working adult in Singapore and assumed that he or she:

• Has a starting minimum $10,000 savings account balance
• Has at least $2,000 in salary credited into the savings account after CPF contribution
• Spends a minimum of $500 a month via credit card on daily expenses (transport and food)

Based on these criteria that we set out, the amount of bonus interest that a typical working adult in Singapore will get to enjoy is 0.2% p.a. due to the high thresholds for the categories.

Also, there are some drawbacks to the categories you need to know about.

Although the Spend category is easy enough to hit; you will need to be using a Citibank debit card. This means you will be missing out on the sweet sweet cashback/miles from spending on credit cards.

Frankly, I find that the Investment category is hard to hit and the investment choices rather limiting. I am not sure why Citibank is limiting your investments to just Unit Trusts, Structured Notes, and/or Bonds.

Not to mention the S$50,000 you will have to sink in as well as the bonus interest lasting only 12 months.

Similarly, for the Insurance category, you are limited to the insurance that Standard Charted offers.

Not to mention the S$50,000 you will have to sink in as well as the bonus interest lasting only 12 months.

Similarly, for the Home Loan category, you are limited to the home loans that Standard Charted offers.

Not to mention that this home loan is likely to be a one-off transaction of at least S$500,000 with the bonus interest lasting only 12 months.

I would think that the Savings category is more difficult than it should be. With most of the banks offering up a salary crediting system where you just have to credit your salary and not worry about withdrawals affecting your enjoyment of the bonus of this category.

Not to mention that you will only enjoy the bonus interest on the incremental ADB amount and not the total ADB amount in your account.

Closing Thoughts

Based on the factors listed above, I would not personally recommend this account for most Singaporeans.

But, unless you have a lot of disposable funds lying around and are a big fan of Citibank’s products, you are better off looking for something else.

Seedly Savings Account Calculator

As all your needs are different, it is difficult for me to give you a specific recommendation.

But fret not.

We have a handy dandy Seedly savings account calculator that will help you find the best savings accounts that will give you the highest interest per annum based on your input.

Do check it out!