Posted by Chuck on February 9, 2020
Bank Account Bonuses

Published on February 9th, 2020 | by Chuck

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Citibank to Launch High Interest Online Savings Account for American Airlines Cardholders; 50,000 Miles Bonus, 25% Spend Bonus (Pilot Program Now Live)

Update: Looks like this is in a pilot program now. Reader @jonathonleguen was offered the following:

It looks like if you deposit $10,000 or more then you’ll get an additional 25% more miles on your card for the first $50,000 spent per year. In addition you get the followign:

  • Deposit $10,000-$49,999.99 and get 1.01% APY and 20,000 bonus miles
  • Deposit $50,000-$199,999.99 and get 1.25% APY and 40,000 bonus miles
  • Deposit $200,000+ and get 1.5% APY and 50,000 bonus miles

Original post: Citibank plans to launch a high-interest online savings account called Citi Miles Ahead for their American Airlines credit cardholders. (CNBC)

  • Exact interest rate unknown, but it’s being presented as a high interest account.
  • Earn up to 50,000 American miles for signing up (presumably this will be tiered with high deposits earning 50k and lower deposits earning lower amounts).
  • 25% boost on miles earned through the credit card (capped at the first $50,000 spent).
  • Account will only be available in areas outside of Citi’s physical footprint.
  • Account is only for Citi American Airlines credit cardholders.

We’ve known that Citi wants to launch a national digital bank, and they’ve already launched their Citi Accelerate savings account which offers competitive interest rates. The Citi Miles Ahead savings account sounds like it’ll be similar, but with special perks targeting American Airlines users.



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qmc
qmc

Footprint will likely be quite similar/identical to Citi Accelerate.

Jeff B
Jeff B

I’m sure this will be well run…🙄

Jc
Jc

The problem is it will only be available outside Citi’s footprint. This would be fine for many who live outside Citi’s footprint but Citi for the accelerate Savings defines outside their footprint as only states where they have no branches which is dumb because their footprint focuses only on major cities so Florida with only branches in The Miami area is off limits even if you live in Tampa. Same with New Jersey where they have only 3 branches or even NY state where the branches are clustered in the NYC metro area so people in Upstate NY are excluded.

This Guy Gets It
This Guy Gets It

Just want to echo this. Sucks if in NY, FL, anywhere with Citibanks already. Why do they do this?!

Matt
Matt

psh yeah that ruins it for most people. honestly that should be in bold here.

CTW
CTW

Okay but hear me out, instead of interest you earn AA miles…

bob
bob

i wonder how they value those miles when it comes time to issue the 1099-INT

HiltyShilty
HiltyShilty

Yeah, and then AA can devalue it’s points… it’s like inflation, but with funbucks!

Jennifer
Jennifer

Note: Since this bonus is “Cashback/ rewards” from purchases, there ‘should’ be no tax implications.

Mikey
Mikey

Don’t bet on it. CITI will 1099 you on the paper clip that holds your bills together if it can.

Ed k
Ed k

And the envelope that holds the 1099. Avoiding like the coronavirus.

FearSells
FearSells

Well done on the 2019nCoV reference!

Jennifer
Jennifer

First I need to clarify that I was referring to the 25% bonus as that’s what’s spend related. It sounds like the additional points would post on your credit card statement.

I do fully expect Citi to send a 1099 for AA miles earned as part of any checking sign up bonus. (Probably at some assumed high value as well.)

Ricardo Costa
Ricardo Costa

Is it happening anytime soon?

Matt
Matt

Jeez so now not only do i have to sign up for the citi business bonus, i have to debate whether i also go for citi personal or wait for this prospective personal aa offer…

Jesus
Jesus

Received a similar offer but earning thank you points instead. Open a checking account deposit 15k and pay two bills in two months and receive 40k thank you points and 25% thank you point booster. Should I accept this offer?

M
M

Yes

Dan
Dan

Can you imagine dealing with Shiti IT? No thanks.

CeeTee Bank
CeeTee Bank

Niiice.

Albert
Albert

How much would they value their miles at? If they are going to send you 1099 saying it worth 4 cents per point. Then you are getting negative profit.

Frank

Well that got sued last time they valued them at 2.5 cpp so probably 1 cpp like everyone else

DP
DP

If properly setup/ran, it’s a cool concept. The marketing team should get a ‘gold star’ for the clever name. Agree with CTW’s comment on this thread that it would be cool if the interest earned was paid in miles as long as it was done at a favorable valuation. All in all, that would be a very interesting new product.

DP
DP

As of 2-5-20, “Citi offers” has targeted savings account promotions. Deposit 10k to 200k+. Earn 20k to 50k AA miles. Plus 1.01% to 1.50% interest. Along with the +25% earnings boost on the AA credit card linked to the offer (not other AA cards you might have). Have to deposit the money within 30D…then maintain for 60D. No monthly fees. Seems worthwhile for anyone with an extra 10k+ laying around.

Mystique
Mystique

William Charles Chuck Called the Citi banking number listed in the application to see if I could get the cash equivalent value of the bonus miles for tax purposes and was given a somewhat dodgy answer.

I was told that Citi would, at their discretion, issue a 1099 only when the miles were redeemed depending on the cash equivalent of what the miles were redeemed for, and only for values over $600. Not sure how they would know what the miles were redeemed for once they got into my AA account, so it sounds like they’re just covering themselves with the IRS.

I’m thinking of giving it a try, anyone else have any thoughts on this?

As a side note, I was told Thank You Points get valued at $0.01 for tax reporting purposes.

tb
tb

Any idea as to how long the monies need to stay on deposit to get the bonus miles?

Mystique
Mystique

You have 30 days to deposit the funds, and then need to hold for another 60 to qualify for the bonus miles.

Frank Farber
Frank Farber

Citi is incompetent. Still waiting months later and a dozen conversations to get my 40k checking bonus. First they said I didn’t deposit enough. Obviously they couldn’t read a deposit ticket. Then they told me it wasn’t in the account long enough. They couldn’t count. I tried to explain that 87 was more than 60 but they just scratched their heads. Even dumber in branch.

Andy
Andy

IMO, you got a clueless rep who has no idea what they’re talking about. If you redeem miles for a business class flight and already had miles in your account, are you using the miles from this bonus, or the miles you had already? Would they prorate? Value of ticket on the day you booked, or when they issue the 1099? There’s no way Citi is going to do this, and there’s no way their IT could handle it even if they wanted to.

I never call in for questions like this because even if you get the correct answer, there’s no way of knowing if it’s right because too many reps just make up BS answers on the fly.

As for me, I’m avoiding this offer like the plague. Citi is the worst.

sevillada
sevillada

how would they explain when our miles don’t post to our locked accounts?

MoreSun
MoreSun

Wild guess but I’m going with the ever helpful “You will need to contact American Airlines”

Karl
Karl

The miles will post to your locked account, you just won’t be able to use them.

Selling unredemable miles to banks is a nice little money spinner so AA hopes locked people will collect as many as possible before they notice this.

Frank

When will they convert it to high interest? All I’m seeing is 1.5%….

qmc
qmc

For citi, that IS high interest. While accelerate is currently at 1.85, ally/amex/marcus are around 1.6-1.8, this one is 1.5 with a 25% benefit to the earning rates on your credit card (regardless of how much you have deposited)

YoniPDX

I wonder how they define “New to Citi” if it is cash or a Citi DDA.

So if one maxed out the bonus with $200k in a Citi DDA @1.5% and $50K on AA card
at 1.25x (25% bonus upto $50k)

=$3K in intrest
=112,500 AA miles
(62,500 AA mile on spend and 50K AA bonus = 112,500)

So kicker would be how they treat the AA miles (I would be concerned as it is attached to a DDA intrest earning account
-they could treat 62,500 as intrest if the did it at more than 1cpp it would kill most value).

Jake Mueller
Jake Mueller

Many people will get the miles but will never be able to redeem them.

MoreSun
MoreSun

If you’ve gotten a couple citi AA credit card bonuses better avoid this offer like the plague

Mystique
Mystique

Can you elaborate? Interferes with ability to earn sign-up bonus again?

MoreSun
MoreSun

People who are shutdown by AA for having too many cc bonuses lose all miles. Including miles earned on bank accounts.

Mystique
Mystique

After some searching, it doesn’t look like people are getting shut down for simply “having too many cc bonuses,” but because they were using fake names to open multiple AA accounts for the mailer bonus. I have not seen a single confirmed report of anyone getting shutdown for opening accounts according to the terms under their own AA numbers.

Mystique
Mystique

If you simply respond to the targeted offer under your own AA and don’t try to open multiple AA accounts to qualify, it seems that you should be fine.

MoreSun
MoreSun

Search better next time. Get to know Reddit. Get to know FT. Get to know Twitter. (A lot of data went private but there is still enough out there.)

Hundreds of people are being shutdown. 4 bonuses in 2 years and you’re on the chopping block even if you don’t know it. Once you’re on the block any member of your household is also and the threshold to shut them down drops to 3.Names and AA numbers were changeable on about half of Citi mailers, mailers which didn’t include 24/48 month language. Some people just did public and targeted offers. Many shutdowns never did fake AA accounts, just used mailers from friends and family- what I’m saying is it wasn’t against the rules Genius.

Creditian
Creditian

Would AA shut you down due to bonuses from Citi for both checking and savings?

Hari
Hari

I would not be ignoring such possibility if you have few bonuses posted few months around this.

dizzy

Are these offers coming thru snail or e-mail? Not sure where to be on the lookout

RR
RR

Mine came via email.

DJ
DJ

got mine via snail mail

Miles
Miles

This Citi savings account will be competing with the savings accounts offered by Bask Bank and BankDirect.

VDESH
VDESH
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