Citibank is part of Citigroup, an American multinational investment bank and financial services corporation headquartered in New York City. The bank was originally formed as City Bank of New York (later Citibank) in 1812 so it’s been around over 200 years. It is now the 4th largest bank in the US with assets of $1.7trillion. It has approximately 20 million customers in the US and 167,000 employees.

Citibank is very much at the core of the established legacy banking industry. Why do 20m people choose to bank with them? 

To answer that question you need to know what people want from their bank — of course, this varies considerably. Accenture published a report on consumer banking needs and identified 3 main groups of people defined by their needs and expectations of their bank. These 3 groups are:

Nomads: This digitally active group is ready for new delivery models. They are willing to share their data in exchange for personalized services. Nomads are comfortable with computer-generated support and with receiving services from non-traditional providers. They make up 39% of banking respondents. 

Hunters:  These consumers search for the best price. They want to buy financial services from traditional providers and, while they operate well in a digital environment, they also place value on one-to-one engagement. They make up 17% of banking respondents.

Quality Seekers: These loyal customers value brand integrity and service excellence, and will work with providers who put customers’ interests first. Price is less important than elements such as data protection and responsive service. They make up 44% of banking respondents.

For the purposes of this post, we are going to focus on Nomads, because Hunters and Quality Seekers make up the bulk of those consumers who are not open to change or alternative banking services. For those latter two groups, there is little or nothing you can do to change their minds despite the evidence. They are the people that this bank CEO was talking about when he said: “You have to torture people pretty hard before they leave a bank” (Nonfiction Research).

APY

But why would anyone in the Nomad category possibly bank with Citi or any legacy bank?

We did a comparison of Citi Priority — one of their premium bank accounts — and Unifimoney, a premium digital bank for high earning professionals.

Citi is well known for paying some of the worst rates on deposits in the market. Their Priority checking account pays 0.03% and savings between 0.04 and 0.15%; you need to have over $500K in your account to achieve the 0.15% rate.

So, no one is banking with Citi due to the returns. It must be something else.

Trading

The Priority account does provide access to share trading — although their rate of $4.95 per trade is especially egregious given the wide adoption of commission-free trading. The very recently introduced digital Robo advisory service Citi Wealth Builder charges 0.55% of assets under management — also relatively expensive compared to Wealthfront, M1 and Betterment at 0.25% and Unifimoney at 0.15%. However, for Priority clients it’s “free”. The investment platform does not include alternative assets such as cryptocurrency or precious metals.

So, you can see what they are doing there — instead of paying consumers a decent return on their deposits, they provide Robo investing. You need to have a minimum combined assets and deposits of $50K for the Priority account to be free. Otherwise, you are charged $30 a month.  

There’s a certain sheen to having a “Priority” account at a bank like Citi, but it’s clear once you look under the hood that the features and functionality of the Citi Priority account are uncompetitive and somewhat limited.

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Now, we realize we are hardly a subjective source on this and we encourage you to research all the options. We believe Unifimoney offers better value for money, and more features and functionality that enable you to manage your money better with less effort. 

Unifimoney seeks to solve for the majority of the manual labor involved in managing your money.  More often than not, the manual labor of personal finance means we leave too much money sitting in deposit accounts earning little or no interest, we don’t redeem 100% of our credit card rewards and benefits, and we don’t dollar-cost average into a low cost diversified fund. 

Our goal is a simple one: create more value for our users’ money. That’s why we wanted to lay out our case as rationally and objectively as possible. 

If you want to learn more about Unifimoney you can visit our website at www.unifimoney.com.

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Unifimoney, Inc. is not a bank. Bank deposit products provided by UMB Bank n.a., Member FDIC. FDIC insurance up to $250,000 (including principal & interest) per depositor per program bank. To participate in the program, you must open an account at UMB Bank, through which your funds will be placed in accounts at participating program banks.

The Unifimoney Visa Debit Card is issued by UMB Bank pursuant to a license from Visa Inc. and may be used everywhere Visa debit cards are accepted.

Investment advisory services provided by Unifimoney RIA, Inc., an SEC-registered investment advisor. For important information and disclosures relating to the investment account visit www.unifimoney.com

Brokerage services are provided by DriveWealth, LLC. DriveWealth is a registered broker dealer, member of FINRA and SIPC.Your cash and investments are protected by SIPC up to $500,000, with a limit of $250,000 for cash.  

Investment accounts are not FDIC Insured - No Bank Guarantee - May Lose Value

The Annual Percentage Yield (APY) as of 12/11/20 is 0.20% APY (0.20% interest rate). The calculation for APY is rounded to the nearest basis point. Both the interest rate and APY are variable and subject to change at our discretion at any time without notice.