Citi's Prince hails Web savings success

Citi's Prince hails Web savings success

Citigroup says its new Internet savings account has attracted $3 billion in deposits since its launch in March, with two thirds of that "new money" to the institution, the equivalent of opening 23 new branches.

The Citibank Direct offers customers a 4.75% interest rate, making it one of the highest paying online banking accounts available.

The move was seen as an attempt by Citi to compete with high-yielding online accounts offered in the US by rivals such as ING which currently pays 4.25% interest.

Citigroup CEO Charles Prince told delegates at an industry conference in New York that in the first ten days after the launch of the high-yielding Web account the bank had ten times the volume predicted, and only a few weeks after the launch the deposits hit $3 billion.

Prince told the conference that, although the group was investing in new branches, Web banking will become the dominant way of doing banking.

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