Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
Where’s my self-driving car? - 16th Aug 22
Real Reason why Pakistan and India Gained Independence in 1947 at 75th Anniversary - 16th Aug 22
Electronic Payments Can Benefit Your Business - Here’s How - 16th Aug 22
Qualcom Stock Market Harbinger - 12th Aug 22
Apple Exec Gets World's 1st iPhone 14 for Daughters 14th Birthday Surprise Present Unboxing! - 12th Aug 22
Steps to remember while playing live roulette online - 12th Aug 22
China Bank Run Protests - Another Potential Tiananmen Square Massacre? - 11th Aug 22
Silver Coin Premiums – Another Collapse? - 11th Aug 22
Gold-to-Silver Ratio Heading Lower – Setup Like 1989-03 - 11th Aug 22
Severe Stocks Bear Market: Will You Be Among the Prepared 1.5%? - 11th Aug 22
There's a Hole in My Bucket Dear Liza, UK Summer Heatwave Plants Watering Problem Song - 11th Aug 22
Why PEAK INFLATION is a RED HERRING! Prepare for a Decade Long Cost of Living Crisis - 9th Aug 22
FREETRADE Want to LEND My Shares to Short Sellers! - 8th Aug 22
Stock Market Unclosed Gap - 8th Aug 22
The End Game for Silver Shenanigans... - 8th Aug 22er
WARNING Corsair MP600 NVME2 M2 SSD Are Prone to Failure Can Prevent Systems From Booting - 8th Aug 22
Elliott Waves: Your "Rhyme & Reason" to Mainstream Stock Market Opinions - 6th Aug 22
COST OF LIVING CRISIS NIGHTMARE - Expect High INFLATION for whole of this DECADE! - 6th Aug 22
WHY PEAK INFLATION RED HERRING - 5th Aug 22
Recession Is Good for Gold, but a Crisis Would Be Even Better - 5th Aug 22
Stock Market Rallying On Slowly Thinning Air - 5th Aug 22
SILVER’S BAD BREAK - 5th Aug 22
Stock Market Trend Pattren 2022 Forecast Current State - 4th Aug 22
Should We Be Prepared For An Aggressive U.S. Fed In The Future? - 4th Aug 22
Will the S&P 500 Stock Market Index Go the Way of Meme Stocks? - 4th Aug 22
Stock Market Another Upswing Attempt - 4th Aug 22
What is our Real Economic and Financial Prognosis? - 4th Aug 22
The REAL Stocks Bear Market of 2022 - 3rd Aug 22
The ‘Wishful Thinking’ Fed Is Anything But ‘Neutral’ - 3rd Aug 22
Don’t Be Misled by Gold’s Recent Upswing - 3rd Aug 22
Aluminum, Copper, Zinc: The 3 Horsemen of the Upcoming "Econocalypse" - 31st July 22
Gold Stocks’ Rally Autumn 2022 - 31st July 22
US Fed Is Battling Excess Global Capital – Which Is Creating Inflation - 31st July 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK Citibank USD Current Account Continues Ramping Up Fees

Personal_Finance / UK Banking May 29, 2014 - 06:22 PM GMT

By: Nadeem_Walayat

Personal_Finance

Once upon a time the Citibank USD current account was by far one of the best such accounts on the market for depositing USD cheque's in the UK, where typically 1.75% was added to the spot GBP exchange rate and if lucky at best as little as 1.5% or at worst rarely more than about 2.2% with no other fees as long as £2,000 or equivalent was always kept on deposit.


However, things started to change a couple of years ago when Citibank introduced a £5 ($8) charge per cheque deposited the immediate effect was to make deposits of small amounts unviable. For instance this fee translated into an additional cost of 0.8% on a $1k cheque deposit the effect of which was an increase of charges experienced to a range of 2.3% to 3.05% per USD cheque. Which when compared against competitors at the time was still was deemed to be a good deal.

If Citibank had stayed put at that than Citibank would still have remained one of the best USD current accounts on the market as the great advantage is that Citibank customers get to choose online when to make the currency transfer and therefore can better time transfers rather than to be left at the mercy of banks that effectively tend to CHOOSE the WORST rate over a 2 week period.

So despite the minimum transfer fee slowly creeping up to 2% to 3% (plus £5 fee), the ability to select rates offered customers a significant advantage over customers of other banks.

However lately, following the most recent Citibank changes the spread has now apparently jumped substantially to a minimum of 3% and as high as 4% with a typical rate offered of 3.6% for a $2k transfer (4.6% for less than $2k). Therefore more than twice the rate citibank used to typically charge a couple of years ago.

For instance the following table illustrates the actual citibank rates given this week on rate tests today and yesterday.

Offered Spot % Added
1.732
1.6716
3.61%
1.731
1.6707
3.62%
1.7307
1.671
3.57%

 

Up until 2 weeks ago the typical % added was 2.34%, that now for no apparent reason has been increased by near 1.3%.

The below table better illustrates the effect of the change in charges over the past few years on typical dollar cheque deposit amounts.

2011 Fee May 2014 Fee
$500
$8.75
1.75%
$31
6.2%
$1000
$17.5
1.75%
$54
5.4%
$2000
$35
1.75%
$80
4%
$5000
$87.5
1.75%
$188
3.8%

 

So today a $5000 USD cheque deposit carries more than twice the fee charged in 2011 and a far greater % for smaller amounts.

Citi UK Reference Exchange Rate

Citibank exchange rates are hidden away on the website under the Investment & Deposits / FX Buy and Sell menu tab when logged in.

The table illustrates the huge GBP spread between buying and selling of 7.65%, more than twice what it used to be a couple of years ago.

The bottom line is that many Citibank USD cheque deposit customers will be wasting their time trying to transfer at a decent rate that is for instance 2.3% above the spot rate but the reality that they now face is that they will be lucky to obtain a rate of spot +3%, and more likely be lumbered with spot+3.6% that is in addition to the £5/$8 cheque deposit fee.

Time to start looking to a better alternative to Citibank USD banking.

Source and comments: http://www.marketoracle.co.uk/Article45824.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2014 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in