SINGAPORE - Citibank Singapore has launched a digital wealth offering that lets customers earn interest of up to 2.8 per cent a year.
The Interest Booster Account on the bank's new Citi Plus on its mobile app pays interest in five categories: spending, investing, insurance, mortgage and savings.
Customers can earn bonus interest ranging from 0.1 per cent to 0.8 per cent a year when they transact in these categories and during their birthday month on balances of up to $50,000.
This is on top of a base interest of 0.3 per cent a year on their first $50,000 until the end of next year.
For example, they can earn bonus interest of 0.8 per cent a year for 12 months when they take up a home loan of at least $500,000.
The bonus interest for savings is 0.2 per cent a year on the incremental balance from the previous month, when they grow their account balance by $1,500.
Citibank Singapore already offers a Wealth First Account that gives bonus interest of up to 2.8 per cent a year, but it has different criteria across the various transaction categories compared with Citi Plus.
For example, Wealth First customers earn bonus interest of 0.8 per cent a year for 12 months when they purchase a single lump sum investment, or a combination of such investments, of at least $50,000 in a month.
The bonus interest is 0.6 per cent a year for Citi Plus users per month when they have three or more qualifying investment transactions, including buying at least $1,000 of investment funds and $5,000 or more in stocks.
Ms Ashmita Acharya, Citibank Singapore's retail banking head, said on Friday that the bank wants to capture more younger customers who are just starting out on their investing journey.
"What we want to do with the emerging affluent, the millennial segment, is to start the holistic banking behaviour early. By the time you get to (a stage) when you're affluent and you've saved enough, (habits like investing and insurance) become a difficult thing to start," she said.
The bank has also increased the cashback that customers can earn on the Citi Cash Back+ Mastercard to up to 2 per cent on eligible spending for Citi Plus users, versus 1.6 per cent previously.
The Citi Plus launch follows moves by the United States-based bank's local peers to raise interest rates on their flagship savings accounts.
UOB raised rates on its One savings account across most balance levels this month to as high as 3.6 per cent for the top tier of balances when customers spend at least $500 a month on an eligible UOB card and have their salary credited via Giro.
OCBC 360 savings account customers can earn interest of up to 4.05 per cent on balances of up to $100,000.
DBS was the first bank to raise rates for savings accounts when it lifted the yield on its DBS Multiplier from 3 per cent to 3.5 per cent for balances from $50,000 to $100,000 last month, among other increases.
Ms Acharya said the effective interest rate offered by other lenders might be higher but Citi Plus involves fewer hurdles for customers to start earning interest.
"We expect people to use all (of the categories) because even the hurdles we've set are very low," she noted.
Other features of Citi Plus, which is the bank's first digital-only offering in Singapore, include financial wellness content such as wealth-related articles and videos, and a tool that allows customers to track their financial goals.
Customers can also invest in mutual funds with amounts starting from $100.
They can sign up at this website for Citi Plus from Saturday.