HSBC Regular Saver - Changing SO to 1st

masonic

changearound1 said:

I brought forward my SO to the first of the month for payments 2-12 a few years ago and didn't gain any extra interest . My understanding was that the extra few days were having interest applied at 0.05%, as quoted in Section 62's post at the top of this page, thereby not increasing the final total.

I don't think I tried a 13th payment because the T&Cs explicitly stated a maximum of £3000.

I don't suppose you have the date of the first payment, interest rate, and interest received figures available?

wmb194

AmityNeon said:

wmb194 said:

masonic said:

Has nobody tried it prior to this year? Appreciate the rates on offer haven't been great for a period of time.

Yes, they had. People with better searching skills than me but be able to find them but I'm sure they reported back that they didn't receive any extra interest. Things can change but, as you know, collectively this forum has always been pretty hot on this sort of thing and there's a reason why people haven't pursued this before.

You may think this forum is pretty hot on this sort of thing, but it doesn't help when others continue to ignore or dismiss those who do report anecdotal experiences of extra interest being received.

I used to repeat what I believed was common knowledge on this forum, that HSBC and First Direct operate differently, that their RS accounts were essentially 'set and forget'. Then @piker57 (recently) revealed their experience as being contrary to what I had previously understood, which incentivised me to cancel my original SOs and shift deposits to the beginning of each month. I lose nothing by having tried, and it's allowed me to gain better insight into the nuances of how the accounts operate beyond published T&Cs.

No, it's definitely been tried before and it was reported that there was no benefit. This isn't to say that something hasn't changed with HSBC and that it's a good time to try again - it's definitely been making changes to its systems.

changearound1

masonic said:

changearound1 said:

I brought forward my SO to the first of the month for payments 2-12 a few years ago and didn't gain any extra interest . My understanding was that the extra few days were having interest applied at 0.05%, as quoted in Section 62's post at the top of this page, thereby not increasing the final total.

I don't think I tried a 13th payment because the T&Cs explicitly stated a maximum of £3000.

I don't suppose you have the date of the first payment, interest rate, and interest received figures available?

I don't have records for the precise dates involved but I seem to remember that the SO was moved forward by a couple of weeks or so - enough to make a noticeable difference if full interest was applied.

In actual fact the final interest total was within pennies of the previous year's where I hadn't tried to be clever. The interest earned will have varied depending on how many weekends / bank holidays delayed the SO payments and of course the 0.05% will have earned a couple of extra pence.

Section62

AmityNeon said:

Section62 said:

I wouldn't consider that evidence. Considering the context, the statement, "Any additional time that funds spend in the Regular Saver will accrue interest, but not at the preferential rate", is easily interpreted as, "After 12 months, funds will accrue interest at the default rate."

This is common practice for any Regular Savings Account that transitions into a standard easy-access account, or where (in certain cases with First Direct) the process of maturity can take several days, and during the additional days where funds cannot be accessed, interest continues to accrue, but not at the preferential rate.

The context of the letter was I opened the account on the 28th and then tried to get the SO changed to the 1st for the third month onwards to maximise the interest - as one might with RS accounts that work on a calendar-month basis.  The CSA refused to change the SO date.  I complained, the paragraph I quoted was part of the reply which explained they could change the SO, but I wouldn't benefit by very much.

I could post the whole letter but don't really want to increase the risk doxxing myself with the specifics.  However, I've seen the whole letter and know what the context is, whereas your assertion is necessarily based on an assumption.  Anyone can of course ignore any evidence, as per their preference.

AmityNeon said:

Section62 said:

Their T&Cs state interest is "calculated daily" and their FAQ (as of today) elaborates on this:

It would be, truly, exceptionally precise, to pointedly program a method of interest calculation that specifically ignored additional deposits (made between monthly anniversary dates) that increased the account balance above the permitted monthly contribution limit. I also highly doubt they would apply different rates of interest to separate parts of the account balance because it's a savings account, not a credit facility where transactions are categorised and delineated with specific rates.

A flaw in your reasoning is that various other accounts that pay credit interest do so on the basis of different rates for different parts of the balance.  BOS Vantage is a good long-term example, but if you want to dismiss that one because it is a current account then how about the Barclays Rainy Day Saver?

The only difference between these and the approach HSBC took to the Pref RS account is that the threshold where a different rate is earned is fixed, whereas the threshold with the HSBC RS was effectively incremented upwards by £250 on the anniversary date. I don't see this being a particularly difficult programming task, at least not in comparison to some other interest calculation difficulties.

A key point here is that the calculation wasn't on the basis it "specifically ignored additional deposits", instead it gave these additional deposits different treatment.

AmityNeon said:

In the absence of an evidential interest figure that is proven to be undercalculated when weighed against the corresponding balance history, it is far more likely that interest is calculated daily on cleared balances, i.e. a single rate for the whole account balance each day.

I guess it depends what is meant by "evidential interest figure".  Anyone could post any figure on an internet forum - is that evidence?  How can it be "proven"?

Anyway, at a full 5% and the actual deposit dates I would have expected approximately £90.15 interest.  Deposits made by SO nominally on the 28th would have earned approximately £80.15. The actual interest paid was £81.82.  This is more than should have been paid using the 0.05% rate, however I think that can be put down* to all deposits being cleared in the account on the 28th (so earning 5%), whereas normally some SO's nominally paid on the 28th would have been delayed by a day or two for weekends or bank holidays and thus generate slightly less interest than the theoretical maximum.

(*Edit: also possible interest paid between maturity date and account closure/funds transfer)

AmityNeon said:

Section62 said:

There are several forumites who would be more than happy to provide their interest figures when their Regular Savers with HSBC and First Direct mature this year, to draw a definitive line under the matter.

Tangible evidence, instead of generic statements in a letter sent to a single customer in 2017.

I was replying to where you said "I haven't personally seen any evidence of where this 'no' answer originated."

I posted what HSBC said in a historic context - i.e. responding to the question where the "no" answer originated.

What HSBC are doing currently is something else, and the figures forumites may post now isn't evidence of what HSBC did in the past.  I'm not going to comment on what HSBC are currently doing in respect of early monthly deposits because that particular boundary isn't one I wanted to push this time round.

Wheres_My_Cashback

And the net gain in fiddling with the SO is going to be minimal and probably not worth the hassle in most cases.

However, In the past I  have changed dates with both FD and HSBC over the phone just to keep all my SO on the same date.

AmityNeon

Section62 said:

However, I've seen the whole letter and know what the context is, whereas your assertion is necessarily based on an assumption. Anyone can of course ignore any evidence, as per their preference.

It's a letter to a single customer, of which the quoted paragraph is ambiguous. It's not that I don't trust you personally, but I can only make judgements based on what has been presented. I have little faith in generic statements from bank representatives who simply regurgitate stock information and are often unaware of the nuanced possibilities in practice. 

Section62 said:

A flaw in your reasoning is that various other accounts that pay credit interest do so on the basis of different rates for different parts of the balance. BOS Vantage is a good long-term example, but if you want to dismiss that one because it is a current account then how about the Barclays Rainy Day Saver?

This is a valid point. I wasn't thinking about traditional tiered rates on part balances, although such tiers are fixed, specific and published in T&Cs.

Section62 said:

The only difference between these and the approach HSBC took to the Pref RS account is that the threshold where a different rate is earned is fixed, whereas the threshold with the HSBC RS was effectively incremented upwards by £250 on the anniversary date. I don't see this being a particularly difficult programming task, at least not in comparison to some other interest calculation difficulties.

I never said it was difficult, just exceptionally precise considering savings accounts don't operate in this manner. A rate threshold that increments by the maximum monthly deposit amount on the monthly anniversary of the account is an interpretation that cannot possibly be gleaned from the account's (current) marketing materials or published T&Cs.

Section62 said:

I guess it depends what is meant by "evidential interest figure". Anyone could post any figure on an internet forum - is that evidence? How can it be "proven"?

Anecdotal evidence, with figures, is sufficient. "Proven" in this context means the interest paid does not mathematically correlate with the corresponding balance history at the preferential rate, and we (others) simply trust that the figures/dates provided are truthful.

Section62 said:

Anyway, at a full 5% and the actual deposit dates I would have expected approximately £90.15 interest. Deposits made by SO nominally on the 28th would have earned approximately £80.15. The actual interest paid was £81.82.

What were the deposit dates? Did you manage to adjust the deposit schedule despite the bank's response?

Section62 said:

I was replying to where you said "I haven't personally seen any evidence of where this 'no' answer originated."

I posted what HSBC said in a historic context - i.e. responding to the question where the "no" answer originated.

What HSBC are doing currently is something else, and the figures forumites may post now isn't evidence of what HSBC did in the past. I'm not going to comment on what HSBC are currently doing in respect of early monthly deposits because that particular boundary isn't one I wanted to push this time round.

My point wasn't to disprove any existence of the 'no' answer, merely that I hadn't personally seen it, and that regardless, it shouldn't discourage others now from adjusting their monthly deposit schedule if they felt so inclined; the worst that could happen is HSBC not paying additional interest, yet there have been more recent reports of additional interest being received.

masonic

AmityNeon said:

My point wasn't to disprove any existence of the 'no' answer, merely that I hadn't personally seen it, and that regardless, it shouldn't discourage others now from adjusting their monthly deposit schedule if they felt so inclined; the worst that could happen is HSBC not paying additional interest, yet there have been more recent reports of additional interest being received.

Is that really the worst that could happen, though? Is there not a risk that at any time they could start enforcing the following term? I realise this is a discussion 'beyond the T&C', but I think we have to appreciate there is a risk associated with not complying with the T&C if there is already precedent for the banks changing their behaviour regarding this.

AmityNeon

masonic said:

AmityNeon said:

My point wasn't to disprove any existence of the 'no' answer, merely that I hadn't personally seen it, and that regardless, it shouldn't discourage others now from adjusting their monthly deposit schedule if they felt so inclined; the worst that could happen is HSBC not paying additional interest, yet there have been more recent reports of additional interest being received.

Is that really the worst that could happen, though? Is there not a risk that at any time they could start enforcing the following term? I realise this is a discussion 'beyond the T&C', but I think we have to appreciate there is a risk associated with not complying with the T&C if there is already precedent for the banks changing their behaviour regarding this.

What precedent? If they ever did start enforcing those particular terms with punitive measures, then the facts would change, but for now, no one has ever reported negative consequences arising from changing SO dates, an act which customer service agents themselves have been happy to carry out upon customer request, bypassing "you can't change the date".

From my understanding of First Direct's RS, those terms are descriptive, not prescriptive. They are also generic and fail to account for all possibilities causing internal contradictions. When the account is opened, a SO is created by First Direct and scheduled automatically for "the same day you opened your Regular Saver or the next working day". As mentioned previously, a SO scheduled for the end of the month (30th or 31st) will skip February and cause two payments to fall in March, which contravenes both "You must pay into the account every month" as well as "You can only make one payment to your Regular Saver each month".

masonic

AmityNeon said:

masonic said:

AmityNeon said:

My point wasn't to disprove any existence of the 'no' answer, merely that I hadn't personally seen it, and that regardless, it shouldn't discourage others now from adjusting their monthly deposit schedule if they felt so inclined; the worst that could happen is HSBC not paying additional interest, yet there have been more recent reports of additional interest being received.

Is that really the worst that could happen, though? Is there not a risk that at any time they could start enforcing the following term? I realise this is a discussion 'beyond the T&C', but I think we have to appreciate there is a risk associated with not complying with the T&C if there is already precedent for the banks changing their behaviour regarding this.

What precedent? If they ever did start enforcing those particular terms with punitive measures, then the facts would change, but for now, no one has ever reported negative consequences arising from changing SO dates, an act which customer service agents themselves have been happy to carry out upon customer request, bypassing "you can't change the date".

From my understanding of First Direct's RS, those terms are descriptive, not prescriptive. They are also generic and fail to account for all possibilities causing internal contradictions. When the account is opened, a SO is created by First Direct and scheduled automatically for "the same day you opened your Regular Saver or the next working day". As mentioned previously, a SO scheduled for the end of the month (30th or 31st) will skip February and cause two payments to fall in March, which contravenes both "You must pay into the account every month" as well as "You can only make one payment to your Regular Saver each month".

The precedent for them changing their behaviour is Section62 and others' experience of not receiving any extra interest vs more recent posts to the contrary. This demonstrates their approach may change over time and there can be no certainty that they will not enforce the T&Cs more strictly in the future. Had the treatment been consistent, then the argument would have been somewhat more compelling. The clippings above came from the T&C documents of the two banks. They use the terms "must" and "need to", which cannot reasonably be interpreted as optional. In my view, difficulties around the month of February does not render these terms unenforceable.

You may be confident in your opinion of the worse case scenario, but you cannot be certain or make any guarantees.

AmityNeon

masonic said:

AmityNeon said:

masonic said:

AmityNeon said:

My point wasn't to disprove any existence of the 'no' answer, merely that I hadn't personally seen it, and that regardless, it shouldn't discourage others now from adjusting their monthly deposit schedule if they felt so inclined; the worst that could happen is HSBC not paying additional interest, yet there have been more recent reports of additional interest being received.

Is that really the worst that could happen, though? Is there not a risk that at any time they could start enforcing the following term? I realise this is a discussion 'beyond the T&C', but I think we have to appreciate there is a risk associated with not complying with the T&C if there is already precedent for the banks changing their behaviour regarding this.

What precedent? If they ever did start enforcing those particular terms with punitive measures, then the facts would change, but for now, no one has ever reported negative consequences arising from changing SO dates, an act which customer service agents themselves have been happy to carry out upon customer request, bypassing "you can't change the date".

From my understanding of First Direct's RS, those terms are descriptive, not prescriptive. They are also generic and fail to account for all possibilities causing internal contradictions. When the account is opened, a SO is created by First Direct and scheduled automatically for "the same day you opened your Regular Saver or the next working day". As mentioned previously, a SO scheduled for the end of the month (30th or 31st) will skip February and cause two payments to fall in March, which contravenes both "You must pay into the account every month" as well as "You can only make one payment to your Regular Saver each month".

The precedent for them changing their behaviour is Section62 and others' experience of not receiving any extra interest vs more recent posts to the contrary. This demonstrates their approach may change over time and there can be no certainty that they will not enforce the T&Cs more strictly in the future. Had the treatment been consistent, then the argument would have been somewhat more compelling. The clippings above came from the T&C documents of the two banks. They use the terms "must" and "need to", which cannot reasonably be interpreted as optional. In my view, difficulties around the month of February does not render these terms unenforceable.

You may be confident in your opinion of the worse case scenario, but you cannot be certain or make any guarantees.

I never said they can't be enforced; they simply are not. If the facts change, then they change. I am certainly not making guarantees to anyone. This is a forum where there is often discussion regarding what happens in practice beyond T&Cs.