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The direct banking market in the US, relatively underdeveloped compared with countries such as the UK, Ireland and Australia (see cover story, BMI 182), has been given a huge boost following the launch of Citibank Direct by the country's largest financial services group, Citigroup. Citibank Direct is an online bank offering US consumers access to all of Citibank's large range of banking, insurance and brokerage products and services, from savings and mortgages, to credit cards and pensions.
The new account will carry an introductory savings rate of 4.5 percent, one of the highest savings rates in the US. It will be available to consumers nationwide and will require no minimum balance and carry no fees - though customers who sign up for the high-rate savings account will be required to open a linked current account.
Some 40 percent of the customers who open accounts on Citibank.com, Citibank's primary online banking platform, live outside of the bank's branch network areas, and through Citibank Direct, the group says it hopes to reach many more customers.
The launch is a formidable development in US retail financial services, a market underserved by direct operations despite ING Direct being there...