HSBC Cutting monthly Saver Rate ?

gettingthere28

Well after months of will I won’t I, I finally decided to open a HSBC Monthly saver account for the 6% rate. My main reason I admit was the BOE interest rate being dropped.

I applied online and set it up for £250 a month. By Friday nothing had appeared in online Banking so I phoned them and was told it can take 3 – 5 working days to open, not sure why but apparently it does.

I asked if the rate would be staying at 6% due to the recent reduction in the base rate and I was told that HSBC are reviewing all the savings rates in view of the interest rate cut, and it is likely the monthly saver rate would be cut. When I asked to what he said he could not comment but probably to 4% or 5%.

Now if this is true it ridiculous, I mean I could understand if the rate fell from say 6% to 5.75% but why to 5% or 4%, even 5% would be a drop of 1% which is not fair, and I my mind only the bank is profiting from this.

At this rate there is no point in having savings !.

gt94sss2

If you have applied for a HSBC Regular Saver they will honor the rate at which it was opened at.

Who can say if HSBC, First Direct and M&S will cut rates for new customers or not ? They haven't announced anything yet on the a Regular Saver but have given notice about rate reductions on some of their other savings accounts.. So they may or may not.

If they do - regardless of if its too 4, 5 or 5.75% - to be fair to them you have to remember they haven't cut interest rates on the regular saver for the last 4 years - while virtually everyone else have been slashing their regular saver rates in that period.. Only a few months ago, TSB cut their rate from 5% to 2%

I applied to renew my Regular Saver with them online on Friday as well.. From memory they always take a few days before it shows online

Kim_13

Banks will be focussing more on the fact that the base rate has been cut in half, rather than it only being a cut of 0.25.

Inflation seemed to be starting to creep in before this cut, so when it worsens due to the BOE's measures, it's only a matter of time before rates will go up again.

YorkshireBoy

gettingthere28 wrote: »

...I was told that...it is likely the monthly saver rate would be cut.


...he said...probably to 4% or 5%.

I can't believe that, with them recording all calls, a telephone based CSA would volunteer, or even speculate on, such information.

You must have backed him into a corner so that all he could do was agree with you, or you're paraphrasing considerably.

bigadaj

gettingthere28 wrote: »

Well after months of will I won’t I, I finally decided to open a HSBC Monthly saver account for the 6% rate. My main reason I admit was the BOE interest rate being dropped.

I applied online and set it up for £250 a month. By Friday nothing had appeared in online Banking so I phoned them and was told it can take 3 – 5 working days to open, not sure why but apparently it does.

I asked if the rate would be staying at 6% due to the recent reduction in the base rate and I was told that HSBC are reviewing all the savings rates in view of the interest rate cut, and it is likely the monthly saver rate would be cut. When I asked to what he said he could not comment but probably to 4% or 5%.

Now if this is true it ridiculous, I mean I could understand if the rate fell from say 6% to 5.75% but why to 5% or 4%, even 5% would be a drop of 1% which is not fair, and I my mind only the bank is profiting from this.

At this rate there is no point in having savings !.

I'm not sure you understand the reasons for these accounts, or indeed the wider economic situation currently.

It is, of course, up to you whether you have savings or not, and if so what you are prepared to do to maximise interest on them.

Do you want to explain how the bank is profiting in this account when money market rates and indeed government financing is available at 1% or less currently?

gt94sss2

Kim_13 wrote: »

Banks will be focussing more on the fact that the base rate has been cut in half, rather than it only being a cut of 0.25.

I suspect what will make a bigger impact to the banks is the extra QE and the extra £100bn in extra funding for businesses rather than the base rate change itself..

Snakey

With CPI inflation running at about half a percent I think 4% is worth having especially now that a large chunk of interest is tax-free. The bulk of my cash savings are in Santander at 3%, regular savers are only soaking up a few hundred quid a month.

Most people hold cash because they're going to need it soon or because they are risk-averse, not because they believe the return is better than any other form of investment.

Ballard

Kim_13 wrote: »

Banks will be focussing more on the fact that the base rate has been cut in half, rather than it only being a cut of 0.25.

What on earth make you think that?

msallen

gettingthere28 wrote: »

Now if this is true it ridiculous, I mean I could understand if the rate fell from say 6% to 5.75% but why to 5% or 4%, even 5% would be a drop of 1% which is not fair, and I my mind only the bank is profiting from this.

Something is ridiculous but its not this possible interest rate cut. How is the bank profiting from paying you 4% or 5% for money when they can get it elsewhere for less than 1%?

PeacefulWaters

Kim_13 wrote: »

Banks will be focussing more on the fact that the base rate has been cut in half, rather than it only being a cut of 0.25.

Nonsense.

They'll be focusing on how they sustain a net interest margin when their savings rates are already perilously close to zero.

Inflation seemed to be starting to creep in before this cut, so when it worsens due to the BOE's measures, it's only a matter of time before rates will go up again.

Although CPI Is still a long way off 2% so it might be a matter of time, but more likely beyond 12 months even with exchange rate impact on imported hood prices.