Citicorp to Count Debt Toward Balance Required for Avoiding Fees

Citicorp this week unveiled an umbrella account that industry watchers said could raise the bar on so-called relationship banking.

Set for a nationwide launch in February, the Citibank Account will let customers avoid monthly service charges by applying their outstanding loan balances from mortgages and credit cards toward a $6,000 monthly minimum balance.

Many banks, including BankBoston Corp., Fleet Financial Group, and First Union Corp., offer similar accounts that let customers pool their assets to avoid monthly service fees.

But most banks limit their accounts to savings, certificates of deposit, money markets, or assets held in bank-managed investments or brokerage accounts.

Citicorp might be the first bank to let customers link their total outstanding mortgage balances to avoid service fees, consultants said. "This looks like the next evolution for basic banking relationships," said Les Dinkin, of NBW Consulting Group, Westport, Conn.

BankBoston's predecessor organization, BayBanks Inc., was a pioneer in the umbrella account structure, offering its BayPlus account in 1993. Now called the BostonPlus account, it lets customers apply some of their mortgage balances-$10,000 for the first five years they have the account - and all their credit card balances toward meeting a $25,000 monthly minimum.

Such packaged accounts-known in industry jargon as relationship accounts-have become increasingly popular means to win more business from customers, said consultants and bankers.

This year Boston-based Fleet introduced the Fleet One account, which lets links to savings accounts and deposit and brokerage products count toward customers' $10,000 monthly minimums.

First Union, based in Charlotte, N.C., offers customers its CAP account, which applies balances held in savings and deposit and brokerage products toward a monthly $25,000 minimum.

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