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HSBC change on its 4% saver account means £700 more interest
HSBC has increased five-fold the amount savers can deposit into its ‘easy access’ account to get the higher bonus interest rate, meaning holders can earn nearly £700 extra a year.
The HSBC Online Bonus Saver now allows holders to earn 4% AER on up to £50,000, a big increase in the earlier limit of £10,000 to earn this higher interest rate.
As of today, it means savers essentially see the interest rate increase from 2.30% AER to 4% AER on balances above £10,000 to the new £50,000 tier, meaning they could earn an extra £680 a year.
However, for savers with cash deposits above £50,000, you’ll earn 2.30% AER on the excess.
Now, the thing to watch with the popular HSBC Online Bonus Saver is that the headline rate is 4% AER, but this is split between a standard rate (1.75% AER) and the interest rate which includes a bonus taking it to 4% AER.
Therefore, the rate you actually earn depends on the amount you hold and whether you access your cash. This is why it’s not a typical ‘easy access account’ as while you can get to your cash, you are penalised with an interest rate drop for doing so.
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Where a withdrawal has been made or the account is closed, the interest rate will tumble to the standard rate of 1.75% AER for that month. The bonus is paid in any month where you don’t make a withdrawal or don’t close your account.
The table below explains the interest rates:
To get the HSBC account, you need to hold its current account or another savings product. It can only be opened online, with a minimum £1 to get you started. However, it can be managed online, via app, telephone banking or in branch.
While there’s no maximum that can be saved, be mindful of the £85,000 Financial Services Compensation Scheme which protects your cash up to this limit if things were to go wrong.
HSBC has also confirmed that its £200 current account switch bonus launched in April, will come to an end on Monday 3 July. The HSBC Regular Saver remains at 5% AER.
How good is the HSBS Online Bonus Saver?
An easy access account paying 4% is competitive, but it’s not the best available on the market which is moving at pace following 13 consecutive Bank of England base rate hikes.
According to Savings Champion data, the current top deal is offered from Newcastle Building Society on its Base Rate Tracker product, currently paying 4.3% AER on a minimum £1.
It guarantees an interest rate which will not fall below the Bank of England base rate less 0.70% until 31 December 2025. It can be opened online or in branch and there’s no limit to the number of deposits or withdrawals.
Elsewhere, fintech firm Chip comes in second place in the best buy tables with its 4.21% AER (4.13% gross) offered on the Chip Instant Access Account. You just need to get the app and start saving with £1.