By: Revanche

Citibank CDs: is it 3.5 or 4.0% APY?

November 11, 2008

My online “high interest” savings accounts are anything but by now, and it’s past time to do something about it.

The odd thing is that I remembered seeing a 4.0% APY offer at Citi a couple days ago, and it’s still there when you use the navigational rate selector to check rates based on term length, or amount deposited. In other places, though, like the advert box or when you actually click through to apply, it’s 3.5% APY. What gives?

I should roll over some of my emergency money (it’s spread across three different accounts because I didn’t want to be stuck without any e-money if one of the banks were to encounter problems) in the Citi and ING Direct accounts to CDs since they’re short term and I don’t anticipate needing all of that money upfront. (Oh great, way to tempt fate, self!) Looks like both of them offer a 6-month 3.5% APY right now, so I don’t even have to feel torn between one or the other product.

Then again, I could create a CD ladder with ING:

The only question is, is that really feasible considering CDs are just a bit less than liquid vehicles? I’m crap at math sometimes, bear with me. If my e-fund is at 6 months’ worth of expenses, and I don’t need to touch it for another two months (approximately), I would be safe putting up to 2 months’ worth in a 6-month CD. If I were to need access to the money starting in two months, I would need four months’ of cash (12,000) before the remaining money (8,000) was available at maturation.

That puts paid to the idea of creating a ladder with this money for now. Oh well, just a thought.

2 Responses to “Citibank CDs: is it 3.5 or 4.0% APY?”

  1. mOOm says:

    Usually you can get the money in a CD any time you like but you lose the interest if you get out early. Isn’t that the case?

  2. Revanche says:

    Moom: Yes, you’re right, but the penalty is something like 3 months’ worth, I think. I’ve been looking for their specific terms because they’re very vague about the penalty but I want to be sure that it’s worth the trouble.

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