HSBC current account customer? You can now get 3% ‘easy-access’ on your savings

Sensory

phillw said:

Sensory said:
Mathematically, the problem isn't even the conditional bonus interest. 

The bonus is the largest violation of the AER code "gross interest rate (excluding any conditional bonus payable)". Within the rules, I think it should be 0.5% AER.

Yes, although even if it wasn't a conditional bonus (so no violation), "3% AER" is mathematically incorrect for balances "up to £10,000" unless they specifically earmark the interest from the first 10K and allow it to compound at 2.96% separately from deposits above 10K, which I suppose is possible.

phillw

Sensory said:
Yes, although even if it wasn't a conditional bonus (so no violation), "3% AER" is mathematically incorrect for balances "up to £10,000" unless they specifically earmark the interest from the first 10K and allow it to compound at 2.96% separately from deposits above 10K, which I suppose is possible.

The bonus is conditional on not making a withdrawal.

Certainly when they calculated the £20000 example they compounded £10000 at 2.96% and £10000 at 0.75% (I ran both through a compound interest calculator and in total it came to 20375.31)

I'm confused how they are going to calculate the interest on this account in reality.

Sensory

phillw said:

Sensory said:
Yes, although even if it wasn't a conditional bonus (so no violation), "3% AER" is mathematically incorrect for balances "up to £10,000" unless they specifically earmark the interest from the first 10K and allow it to compound at 2.96% separately from deposits above 10K, which I suppose is possible.

The bonus is conditional on not making a withdrawal.

Certainly when they calculated the £20000 example they compounded £10000 at 2.96% and £10000 at 0.75% (I ran both through a compound interest calculator and in total it came to 20375.31)

I'm confused how they are going to calculate the interest on this account in reality.

I said if the bonus wasn’t conditional, as if the bonus rates were simply standard rates. I’m obviously aware of the bonus rates, and standard rates, and what the conditions are; my point is regarding the interest calculation of monthly compounding and AER when coupled with tiered interest rates.

We won’t know for certain until the second interest payment is credited to anyone holding close to 10K or more. I doubt they compounded interest at all for their estimated calculations. Most likely they used the AER figures, hence the very clean £300 + £75 in interest.

westv

I've just had an email from HSBC confirming my new Bonus Saver account but the "summary box" shows the rates for up to £10k as 0.20% standard rate and 1.3% bonus rates. Surely that's wrong?

Swipe

westv said:

I've just had an email from HSBC confirming my new Bonus Saver account but the "summary box" shows the rates for up to £10k as 0.20% standard rate and 1.3% bonus rates. Surely that's wrong?

Yes, it should be 0.5% for anything over £10K and 0.5% if a withdrawal is made. That's what my HSBC app says currently.

RG2015

westv said:

I've just had an email from HSBC confirming my new Bonus Saver account but the "summary box" shows the rates for up to £10k as 0.20% standard rate and 1.3% bonus rates. Surely that's wrong?

I got this email last week but the correct rate of 2.99% is showing in the app. Sadly as reported earlier, I cannot set up any payees so cannot access my money. Just waiting for them to open my new current account.

phillw

Interest paid and I pulled the plug... Time will tell whether I jumped the gun or not, worst case I lost a £1 ish..

I might jump back in next month

Band7

phillw said:

Interest paid and I pulled the plug... Time will tell whether I jumped the gun or not, worst case I lost a £1 ish..

I might jump back in next month

Balance withdrawn and account will be closed overnight. I might open another OBS tomorrow if they let me, and test the interest rate.

kaMelo

Why withdrawn today? Nowhere else beats it yet and I suppose that's the gamble in assuming someone else soon will but, given the lag usually in increasing savings rates, I would be surprised if anywhere beats them before December. That's what I'm assuming anyway so have left mine alone for the time being.

RG2015

kaMelo said:

Why withdrawn today? Nowhere else beats it yet and I suppose that's the gamble in assuming someone else soon will but, given the lag usually in increasing savings rates, I would be surprised if anywhere beats them before December. That's what I'm assuming anyway so have left mine alone for the time being.

I agree. I am treating it like a 30 day access account with the added bonus of being able to withdraw at a small cost (loss of interest).