Can my bank take my savings to pay my current account debt?

time22

Hi

I have a fairly simple question:

I have an HSBC current account with a lot of debt and missed repayments.

Any money that I put into that account, will be eaten up by the debt, which I am in the process of dealing with.

However, for the moment , I need to put some money into a differnt account - primarily my HSBC ISA savings account.

Can anyone confirm that if i do this, HSBC will not simply take that money to pay for the current account debt?

I need to sort this today, if anyone can help!


Many Thanks

T.

xrjtg

time22 wrote: »

Can anyone confirm that if i do this, HSBC will not simply take that money to pay for the current account debt?

Unfortunately, no. HSBC are allowed to do exactly that: it's called the right of set off. You should move your savings to another bank if you want to avoid this happening, but do bear in mind that if you don't need the money immediately, paying off the debt with savings could be the right thing to do.

time22

Darn.

Well thanks for telling me what I didn't ant to hear!

It has at least saved me some more trouble.

T.

G_M

If you have debts why are you putting cash into an ISA account? Pay off the debt!

Lokolo_2

Yes because the loan or overdraft is probably costing you a much higher interest rate than what the ISA would accrue, so it's actually more beneficial to pay off the debt and THEN start saving!

johnmoney05

You should have asked "could I not pay any debt I owed with the bank, at the same time, I took thier money into my ISA or other saving account?"!!!

nrsql

There are good reasons for not paying off debt and adding to a savings account with aother institution.
If you pay off the debt you could end up in a situation where you have no spare funds and hsbc won't provide you with a facility - especially if you have had a dubious history they can reduce the overdraft facility in line with your debt reduction.
This could put you in a situation where, if anything happens for which you need emergency cash, you are forced to borrow at exhorbitant rates if it is available at all.
So even if the debt is costing more than the savinges you need to keep a little available in a fairly instant access account - it's up to you to decide how much as reducing the debt will be profitable.