Citibank IRA Review and ROTH IRA CD Rates For 2024


Citibank CD IRAs, Roth IRA, SEP/Traditional IRA, 401k Rollover, and Money Market IRA. Citibank IRA account fees, APY/APR rates, and promotion offer.


Citi IRA Overview

Citi is one of the largest financial institutions in the U.S. and has several tools and services designed to help you optimize your retirement savings plan. If you are looking for a good place to start a new IRA (or move an existing one), Citi IRAs might be a good option for you to consider.

Keep reading to see if Citi IRAs are the right choice for you.

Citi offers two different IRA accounts: a Traditional IRA and a Roth IRA, both of which can be structured as an Insured Money Market Account IRA and a CD IRA.

Selecting the best combination comes down to a few different factors. One is how (and when) you want your savings to be taxed, and another is how much you want to earn on your investment. There are other considerations as well, such as how active you want to be in managing your portfolio, what options you have for early withdrawals, how your portfolio earnings are taxed, your expected future tax bracket, and more.


Citi IRA Review


Money Market Vs. CDs

As mentioned, Citi’s retirement accounts use Insured Money Market Funds and CDs.

If you choose the money market account option for your Traditional or Roth IRA, there is no minimum deposit requirement to open the account. There is also no early withdrawal penalty.

Choosing the CD option means you’ll need to make an initial deposit of $250 and pay an early withdrawal penalty if you need to remove your funds before the account has reached maturity (rates described in more detail below). CD-based IRAs pay higher rates than money market accounts.


Interest Rates and APY

Interest rates change all the time, but as of Q1, 2024, Citi’s rates are as follows:

Citi’s Insured Money Market IRAs have an APY of 0.20%.
The 18-Month Variable CD has a rate of 5.39%.
Fixed-rate CDs have a different rate for each available term, ranging from 3 months to 5 years.
The fixed-rate CD rates range from 2% to 5.07%.


Citi IRA CD Rates


CITI IRA Commissions and Fees

There are no monthly fees for either of Citi’s IRA accounts. However, there are some fees based on account activity that you should be aware of.

Early redemption fees for CD-based IRAs are calculated using simple interest. The interest is applied to the amount withdrawn.

Withdrawals on CDs with terms ranging from 3 months to 1 year have a fee equal to 90 days of simple interest.

Withdrawals on CDs between 13 months and 5 years have a fee of 180 days of simple interest.

Early redemption on variable-rate CDs also comes with a fee of 180 days of simple interest.


Establishing an IRA with CITI

To sign up for a new IRA account, you must already hold a bank account with Citi. It can be a saving or checking account. Whether you already have an account or are applying for a new one, there are three ways to sign up for an IRA once you have an open account.

You can download the application form (here https://online.citi.com/US/JRS/pands/detail.do?ID=IRARates) and mail it in, call the bank and speak with an account specialist, or you can go to a physical branch.

The fastest way is to send in the form, which provides the bank with all the information they need to set things up efficiently.


Investment IRAs at Citibank

If banking IRAs are not what you are looking for, Citi offers another type of retirement account focusing on active investing. You can trade stocks, options, bonds, and mutual funds with a 'Personal Wealth Management' IRA from Citi. Read Citi brokerage customer reviews.


Citi IRA Rates


IRA Rollovers at Citi

If you already have an IRA at another bank (not a brokerage, as the underlying securities may not be compatible with Citi’s bank IRAs), you can use Citi’s IRA rollover option to move your account. You can move to a Traditional IRA, a Roth IRA, and a 401(k) without losing the tax-deferred status of your savings.


Differences Between Traditional and Roth IRAs

There are some key differences between Traditional and Roth IRAs. The primary difference is how the two account types are taxed. Other differences include income requirements and early withdrawal rules.


Taxes on IRAs

Roth IRAs are funded with pre-tax money, making future withdrawals tax-free. Earnings on your investments are also not taxed in a Roth IRA. Contributions in a Roth are not tax deductible, however.

Traditional IRAs, on the other hand, are funded with pre-tax money. That means taxes are paid when you make withdrawals in the future. One benefit of Traditional IRAs is that contributions are tax deductible.

Which IRA provides better tax advantages? The question for many comes down to their expected tax bracket in retirement. If you expect to be in a lower tax bracket during retirement, paying taxes later will save you some money. Conversely, contributing to a Roth IRA with after-tax dollars can make more sense if you expect to be in a higher tax bracket.


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Income Limits

Roth IRAs come with several advantages, but there is an income cap on investors seeking to open one. As of 2024, single filers should make less than $138,000, and married filers should make less than $218,000 to contribute the full amount ($6,500 and $7,500, respectively). Contribution limits shrink as income expands past the Roth IRA salary cap.

Traditional IRAs have no cap on income.


Competitors

Citi's rates on IRAs are about average comparing to many competitors. CIT Bank, for example, pays 4.65% APY on a completely liquid account and 5.00% APY on an 18-month CD.


Recommendations

Citi offers some great retirement options. The combined benefits from the underlying securities and IRA account types can help investors find a solution that meets their needs, goals, and expectations. Whether your focus is on interest rates, security, tax benefits, or any combination of what the available products provide, you are likely to find what you need at Citi. Add the ability to open an investing IRA, and Citi checks several essential boxes.

Citi IRAs are not appropriate for some types of investors. One example would be those seeking to incorporate trading in futures, commodities, cryptocurrency, and Forex.


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