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Citi offering 2.36% APR Savings Account

https://banking.citi.com/cbol/savings/high-yield-savings-account/default.htm?channel=atl-display&image=TO&calc=TO&promo_ID=4CEWQH4ZENATDS&cmp=BAC~02~190226~BRANDING~Savings~HYSA~BounceX&BT_TX=1&ProspectID=18CBEC1778124738A4CB2B110BA551B4

Not available in all states. Please check if interested

$500 balance requirement to simply have Savings Account, with no Checking account, and then you don't have to do anything like have a direct deposit or make a bill payment for avoiding fees.

Comments

  • That is a good rate, comparable to a few others. I think my Schwab MM is 2.32% and I believe Fidelity may be a little higher. Best one I see on Bankrate.com is 2.4%. Seems MM and savings accounts are pretty close to 1 year CDs now. CDs have actually reduced their offerings over the past 3 or 4 months.
  • From the rate sheet:

    "The 'National Rate Region' is applicable to accounts opened by customers with a residential address in one of the following states: AL, AK, AZ, AR, CO, DE, GA, HI, ID, IN, IA, KS, KY, LA, OK, ME, MA, MI, MN, MO, MS, MT, NE, NH, NM, NC, ND, OH, OR, PA, RI, SC, SD, TN, UT, VT, WA, WV, WI and WY and the following territories, possessions and military addresses of AA, AE, AP, AS, GU, MP, PR and VI. "
  • edited March 12
    @MikeM- Do you happen to know the symbol for that fund? For the life of me I can't seem to find a fund symbol or much other info on the so-called mmkt fund associated with our brokerage account.

    Thanks-
    OJ

    Mike- I'm referring to the Schwab1 "sweep account", which is paying almost nothing. Their other MMKT options are so-called "purchased MMKT Funds", of which there are a fair number of different types. However, these are not automatic "sweep accounts", but must be bought and sold like any other mutual fund.
  • @MikeM Yes if you can share the fund symbol on that money market fund that would be great. I’m looking to park some cash in a fund at Schwab with a good rate.
  • Schwab Advantage MMF symbol is SWVXX .
  • @Old_Joe, @MikeW, carew388 shows the MM fund I was referring to, SWVXX. I don't know the symbol for the cash sweep, but I keep very little in the sweep, usually < $100. You have to move money between MM and sweep when you want to buy or sell something, which is a bit of an inconvenience.
  • Then it is not a sweep account.
  • Here's Schwab's page for purchased (i.e. position) MMFs. The rate on SWVXX appears to have dropped a basis point. It's now 2.31%.
    https://www.schwab.com/public/schwab/investing/accounts_products/investment/money_markets_funds/purchased_money_funds

    There isn't a symbol for the cash sweep account because it's not a MMF but a bank account (at Schwab Bank and/or Schwab Premier Bank) that you can access only through your brokerage account.
    https://www.schwab.com/public/schwab/nn/agreements/cash_features_disclosure_statement.html
  • edited March 13
    @msf / @ MikeM: Yes, your info is what I was seeing also. Not really a MMF "sweep"- you must manually redirect (purchase) Schwab MMkt funds. Thanks much for your help.

    Regards- OJ

    Add: @MikeM: Rather than use SWVXX I'm looking at using non-taxable (Fed & CA state) SWKXX. I notice that there is also SWYXX, non-taxable both Fed and New York state, which might be of interest (accidental pun!) to you. Here's the Schwab boilerplate on SWYXX:

    "Schwab New York Municipal Money Fund™: The taxable-equivalent yield assumes a federal regular income tax rate of 40.80%, which includes a Medicare surcharge rate of 3.8%, and New York state personal income rate of 8.82%. The combined rate of 49.62% takes into account that state income tax may not be deductible for Federal income tax purposes as a result of the 2018 tax law changes. Your tax rate may be different."
  • The tax equivalent yield of SWKXX is for Californians with ordinary taxable income (i.e. not cap gains, qualified divs, or other odd categories) above $1M (single) or $1,145,960 (married).

    For what one might consider upper middle income (esp. in Calif.), $56,085-$286,492 (single) or $112,170-$572,984, the Calif. tax is "just" 9.3% as opposed to the 13.3% used in the calculation.

    Individuals in the indicated range would fall somewhere in the 24%, 32%, or 35% bracket for federal taxes. Let's call it 32%. Married couples would span similar brackets. Add in the 3.8% Medicare surtax, and we've got 35.8% federal.

    Using a combined fed/state of 35.8% + 9.3% = 44.1%, SWKXX 's 1.31% yield would be equivalent to a pre-tax yield of 2.34%, or about the same as SWVXX. If one is in the 24% bracket or lower, it looks like SWVXX comes out better. (But using a muni fund, even if it has about the same after tax yield can be better because it reduces MAGI for SS and Medicare purposes.)

    Curious that SWYXX doesn't include the effect of NYC's income tax, which tops out at 3.876%.
  • @msf: Wow, you answered every damned question that I had wondered about, without my even asking! I realized that the "equivalency" numbers Schwab was showing were inflated with respect to our income bracket, and was thinking about digging into last year's tax returns to try and get a closer number, but you took care of the whole thing.

    I had a suspicion that SWKXX/SWVXX would probably be ballpark equivalent, just as you said. The MAGI factor tips the choice towards SWKXX, at least for us.

    Thanks much for the info- you sure saved me a lot of time.

    Regards- OJ
  • @msf Wow this is awesome! thanks so much for doing this analysis... Like Old Joe said you covered every base....
  • @msf : hello if you were a CPA or stock/MF advisor running company we would highly hire you/invest in your firms
    thx...hagd
  • @Old_Joe , @MikeW , @johnN - thanks guys, but I'm just doing a little arithmetic. I always did like playing with numbers.

    And it did seem to make sense to work out the effective rate for people in more realistic tax brackets. If you're taking in over $1M/year, you can have your own accountant do this:-)
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