"Bravo HSBC! Top player for two products" Blog Discussion

Former_MSE_Lawrence

This is the discussion to link on the back of Martin's "Bravo HSBC! Top player for two products" blog. Please read the blog first, as the discussion follows it.

Read Martin's "Bravo HSBC! Top player for two products" Blog

ManAtHome

Well a half-bravo - you only get the new online saver rate of 5.75% for "new money", no real explanantion of how they're actually going to work this out yet (quite a few "might"s and "may"s in the T&C).

Some institutions prefer to reward long-standing customers...

shoi

just one withdrawal in a year brings the interest rate down to about 5.3%, which isnt at all great

Martin, you shouldnt be recommending this, its not " OK as long as you don't make many withdrawals" it's only good for a serious long term save for a particular purpose

Steve

MSE_Martin

Steve,

While I understand the sentiment - what I write in the article is " If you’re looking for a simple long term place to stash cash, these are the place as they’ve the highest rates; yet if you may need to regularly access the money, avoid them."

Which I believe holds true. Also your interest rate based on 1 withdrawal a year doesn't actually work. The rate depends on two factors

A. When in the month you withdraw cash
B. The amount you withdraw compared to the amount that remains.

It's not as blunt as working out this type of rate.

Martin

ManAtHome

Martin, doesn't matter how much you have invested or wwhich day you make a withdrawal - moving a quid out means you get absolutely no interest at all for the entire month.

You can mitigate your losses by clearing the account on the 1st of a month then putting it back on the 1st of the following month, but this limits you to a linked HSBC savings account paying a lot less than most others. Unless you can time your withdrawals precisely, you'd be better off with IceSave at 0.05% less.

MSE_Martin

Sorry Man at Home but that isn't correct when you come to work out the proportioned interest rate. It's important to remember that we're talking a long term place to stash cash - if you then take out a lump sum at the beginnning of the month you're not losing interest on that.

Let me give you a scenario.

You put £10,000 in the account leave it there for 23 months and then on the first day of the next month withdraw £9000.

All you've lost here is the interest on £100 for one month. The article explains how to do this - and the lost interest rate is tiny.

Martin

ManAtHome

Couldn't see any detail in the article (maybe reading the worng one..?), but the maximum difference over Icesave after 2 years for £10k is £10 providing rates remain in parity.

For this you either need to spend the cash on the 1st of a month, or hope the transfer out doesn't take too long (I reckon 5 days would lose you most of your extra tenner). Or more likely gnash your teeth for 3 weeks when Icesave respond to any BoE rise, but HSBC don't... For me, the extra 0.05% doesn't make it worth the restrictions

I do have one of the (old) HSBC online saver accounts, mainly to keep my Premier account free - still a bit concerned about the rather woolly T&Cs around the "new money" (lack of) definition, but will have a go at the close-the-old, open-the-new (on the 1st or course).