HSBC ups Online Saver rate to 5.75%

Beate

Right, how about this scenario: MSE opens up Halifax current account which pays 6.17% for the first £2,500 and gets £100 on top for doing so. He has his salary paid into Halifax to meet their £1,000 criteria and sets up a standing order to HSBC to pay to them whatever their criteria is (£500-£1,000 a month?) He then shifts the money from the HSBC Current Account into the new 5.75% HSBC Online Saver as apparently this is allowed as system will know it comes from external source originally. Result joy allround or too complicated? Halifax says it will take up to 4 weeks to switch DD's etc. over, I am just worried that something will go wrong and my rent will not go out in time or from account with no money in it anymore or whatever. And I would have to be careful how much is in each bank to satisfy all DD's correctly.
Any comments? I am just brain storming right now.

Kazza242

Beate wrote:

Any comments? I am just brain storming right now.

It sounds like a good idea to me. I think it is a good idea to have another current account as it isn't good to have all your eggs in one basket so to speak.

I can't see how HSBC could prevent you from funding the 5.75% monthly saver in this way. HSBC have tried to restrict existing customers from moving money already in their standard online saver (or HSBC account) into the higher rate online saver. However, there is nothing to prevent you moving monies to an external account and then opening the 5.75% account before transferring it back in. I think a difference of 0.50% is worth the effort. Ensure though that your money is not 'in transit' over the weekend.

ManAtHome

But what if HSBC regard "new money" as the difference between your overall balance "now" and the balance with them from (say) end-January...?

Better move may be to put your cash somewhere where the "brains" don't spend their time trying to pee off existing customers.

Kazza242

ManAtHome wrote:

Better move may be to put your cash somewhere where the "brains" don't spend their time trying to pee off existing customers.

Perhaps then Icesave's 5.70% might be a better account to go for, as you don't lose any interest if you make withdrawal. Also A&L offer an account like the HSBC online saver, called Direct Saver paying 5.80% AER. A&L's Premier Direct current account pays 6.10% (fixed until 30/4/08) on balances up to £2500.

intalex

Considering the withdrawal penalty, 5.75% seems like a fair rate to all customers (new & old) as a bare minimum.

This whole idea of getting "new money" is probably gonna lead to more money going out than coming in, since people will move elsewhere to make their money "external" to HSBC, but when they realise that they can earn a decent rate elsewhere and not have to pay any penalties for withdrawals, then they may not even bother re-opening an HSBC online saver considering the penalty for withdrawals.

teddyco

I just called HSBC and asked the fella on the other end of the phone about the term 'new money'. I told him that I was moving a sum from another current account into my existing HSBC current account that would then be moved into the new Online Saver account.
I told him that I was concerned that HSBC would classify that as 'within HSBC' transfer and give me the lower rate.
He said NO, HSBC will be able to tell that the money was coming from outside the bank and would in turn give me the 5.75% rate.

He said 'there has been a lot of confusion from people as to who qualifies for the 5.75% rate', so I guess they are having some feedback about their terms.

I'll wait and see what happens when the money reaches my account and play the game as usual..........

MiserlyMartin

This account sounds to me like a short term gimmick which will not keep pace with the market. A&L keep launching products like this too. I would stick with Icesave its a good rate and service and you don't have to keep switching around.

KTF

If you havent got one of these already then why would you want this instead of the A&L one? The Terms are similar (no interest on the month you take the money out) yet the A&L one pays slightly more. No current account needed either.

teddyco

KTF,
Good point, I'll look into that.
Thanks!

dippy

I'm confused whether money from a first direct account will be considered new money. They haven't specified whether they were referring to new money to hsbc bank or hsbc group.