Citibank Direct - A First Hand Report

From the standpoint of existing customers, they are not doing much at all to promote it (at least not yet), but if you switch from the normal online banking page over to the page where products and services are promoted, you see the e-savings account listed first among the savings products with a bright red and yellow "New!" logo next to it.

Once you click on that, you are brought to a page which describes the product well and has a link for applying. I commend them for making the application process clear and simple for existing customers. It gives instructions about how to find the product once you've logged on. You do have to wade through a series of online disclosures, which seem to those that relate to all their online-only Citibank Direct accounts, but once you do, the account quickly appears as an additional savings product in your online banking menu.

I had first called the Customer Service area to confirm that this linkage would be in place, and the rep I spoke with seemed well-briefed on the new product and readily explained to me how it would work. A follow-up email was sent within about 15 minutes, making sure I knew a new account had been opened (good security procedure) and letting me know how to move funds into it from either an existing Citi account or an external funding source.

So, I'd call this a very thorough product launch -- very good rate, smooth opening process, reasonable disclosure process given the regulatory climate, CSRs up-to-speeed, banking alerts in place.

On the other hand, I can see why they wouldn't be aggressively promoting it to existing customers. In the space of a few keystrokes, I moved a significant amount of money from an account yielding 1% to a virtually identical account yielding 4.5% -- a pretty big hit to the bank's net interest margin (though the balance involved is obviously a lot more significant to me than it is to Citigroup).

Still, that money was probably headed for a tax-free money market fund at a mutual fund complex, and now it will probably stick at Citi. I'm sure the staff in branches will be glad to have this product to sell to customers tired of looking at deposit rates that have a zero to the left of the decimal place.