HSBC 10% Regular Saver - any good?

djohnsonhk

I bank with HSBC and just noticed they're offering a 10% gross/AER fixed for 12 months on a regular savings account.

Does anybody who knows about accounts 'n stuff know if this is any good?

Lavendyr

You have to have one of their Premier accounts don't you? So you have to pay £10 a month or something in order to get the 10%?

matt4504

Yeh but I think the plus account is like £6.50 for the first six months at the moment isn't it? If you save a decent amount each month I think you will prob benefit maybe? *shrugs*

gt94sss2

djohnsonhk wrote: »

I bank with HSBC and just noticed they're offering a 10% gross/AER fixed for 12 months on a regular savings account.

Does anybody who knows about accounts 'n stuff know if this is any good?

10% is a decent rate for a regular saver but to get that rate you need to have a HSBC Premier, Bank Account Plus or Passport account.

If you have another HSBC bank account you will get 8% which again is ok, though obviously not as good!

Regards
Sunil

Lavendyr

Someone better at maths than me would have to work out whether it's worth paying £6.50 a month for a 10% rate if you paid the maximum in each month (which is £250 I believe?). It may be better just going for a lower rate regular saver but not paying the fee, but I can't work that out right now. :P

Beate

I have the "regular" Regular Saver which pays 8%, and you can only put in up to £250 a month, which translates to £3,000 a year. Interest on 8% a year is roughly £120 before tax, and on 10% per year is roughly £150 a year, so for paying £39 (£6.50 for 6 months) you would actually only get £30 more, so would make a minus of £9, and that is before tax.

Beate

reehsetin wrote: »

250 per month after one year at 10% is 3,300
3,300 minus (6.50x12) = 3222
250 per month after one year at 8% is 3,240
so unless you want the other benefits of the account it wouldnt be worth it right?
(havent put tax in the equation)

Please do not make the mistake of just adding 8% or 10% on the total. The interest will not be paid on the lump sum of £3,000 but accumulated on £250 in the first month, £500 in the second month etc., which can roughly be translated as half the interest if you had paid it in as a lump sum and left £3,000 in for a year. (i.e 4% or 5%).

Your conclusion is correct though, it is not worth it.

Milarky

(posted here on a previous thread)

"It says here you'd pay £113 in the first year just for the privilege. Compare that to the 2% (gross) differential on an average regular saver balance of £1625 - £32.50 before tax - and I think you'll agree it's plain which regular saver account you should open"

reehsetin

Beate wrote: »

Please do not make the mistake of just adding 8% or 10% on the total. The interest will not be paid on the lump sum of £3,000 but accumulated on £250 in the first month, £500 in the second month etc., which can roughly be translated as half the interest if you had paid it in as a lump sum and left £3,000 in for a year. (i.e 4% or 5%).

Your conclusion is correct though, it is not worth it.

should be right i used an online interest calculator saying it would be paid monthly, must admit i didnt calculate it personally

Beate

reehsetin wrote: »

should be right i used an online interest calculator saying it would be paid monthly, must admit i didnt calculate it personally

The 10% are annual interest. So if you had £3,000 in an account for a year, you would get £300 before tax after 12 months. But here you haven't. You start with £250, then you add £250 each month, so invariably you will get less interest. Even if interest is paid out annually, it is calculated daily regarding the amount in the account. This has been discussed many times on this forum already, so please believe me when I say you won't receive £300 on a 10% Regular Saver where you drip-feed £250 in every month.

reehsetin

Beate wrote: »

The 10% are annual interest. So if you had £3,000 in an account for a year, you would get £300 before tax after 12 months. But here you haven't. You start with £250, then you add £250 each month, so invariably you will get less interest. Even if interest is paid out annually, it is calculated daily regarding the amount in the account. This has been discussed many times on this forum already, so please believe me when I say you won't receive £300 on a 10% Regular Saver where you drip-feed £250 in every month.

see what your saying, sorry should have thought about it logically, just trusted this site because it talks about monthly savings v lump so thought it was taking into account the fact it was drip feeding
have deleted my sums so not mislead someone