HSBC ON BNS SAVER

thebigreaper

Hi all....just a query re the above account. The interest figures stated might not be 100% accurate but you'll get the gist of my query.

So...you receive 4% interest on amounts up to £10k and 2.5% on any amount above this.
If you make a withdrawal at any time then you only receive 1.35% interest on the balance of your account for that month .

If I have £10k in the account my interest gets added the following month, but the interest will only earn 2.5% because it is over the £10k .
I can't withdraw it because then my balance will only receive 1.35% interest that following month because I will have made a withdrawal .

So HSBC have now locked any future monies up at 2.5% .

I can't have the interest paid direct into another account , it has to go back into the Saver ( I asked customer service ).

Trying to maximise interest earning potential I would ideally like to move the interest payment somewhere paying more than 2.5% . 

Any suggestions ?

wmb194

thebigreaper said:

Hi all....just a query re the above account. The interest figures stated might not be 100% accurate but you'll get the gist of my query.

So...you receive 4% interest on amounts up to £10k and 2.5% on any amount above this.
If you make a withdrawal at any time then you only receive 1.35% interest on the balance of your account for that month .

If I have £10k in the account my interest gets added the following month, but the interest will only earn 2.5% because it is over the £10k .
I can't withdraw it because then my balance will only receive 1.35% interest that following month because I will have made a withdrawal .

So HSBC have now locked any future monies up at 2.5% .

I can't have the interest paid direct into another account , it has to go back into the Saver ( I asked customer service ).

Trying to maximise interest earning potential I would ideally like to move the interest payment somewhere paying more than 2.5% . 

Any suggestions ?

Don't deposit the full £10,000 and leave it room to grow and compound at 4%.

thebigreaper

Thanks . I had thought about something along those lines but at some point I will hit that £10k ceiling . 
I think I will go down that route but it just niggles me that I will be " penalised " when I eventually withdraw or leave it in at the lower interest rate .

AmityNeon

There are instant access accounts without balance restrictions or withdrawal limits paying 4% AER or more now, Tandem and Chip. They're app-only, but simple and fast to open.

cloud_dog

As per @wmb194, deposit enough for some growth (£9k / £9500), once it hit /exceeds the £10k limit (after interest credited), move it to another account and then move it back on the last day of that month.  Obviously this is a bit of a faff, and if you have an account that is paying almost 4% it might be easier to simply put it there and leave it 

wiseonesomeofthetime

As per @AmityNeon, move it elsewhere for the same/more, with no restrictions in place.

That's what I have done. 

Just a £1 sitting in my HSBC ON SAVER.

AmityNeon

thebigreaper said:

Thanks . I had thought about something along those lines but at some point I will hit that £10k ceiling . 
I think I will go down that route but it just niggles me that I will be " penalised " when I eventually withdraw or leave it in at the lower interest rate .

If you withdraw the entire balance on the first day of the month, the penalty won't matter. The account doesn't pay top rates for very long, so even if you deposit the full £10K for periods when it is market-leading, the lower rate for compound interest above £10K will be negligible because you'll likely empty the account soon after interest is paid anyway.

Swipe

It earns £33 a month. IMO it's not even worth worrying about making extra over 2.5% on any interest.

AmityNeon

Swipe said:

It earns £33 a month. IMO it's not even worth worrying about making extra over 2.5% on any interest.

Indeed, the published AER is 4.00% instead of 4.03% (which would be the standard AER for 3.96% gross monthly). The reduced AER (by 0.03%) factors in the reduced rate for compound interest above £10K. The difference is approximately £3 after 12 months (0.03% of £10K).

allegro120

thebigreaper said:

Hi all....just a query re the above account. The interest figures stated might not be 100% accurate but you'll get the gist of my query.

So...you receive 4% interest on amounts up to £10k and 2.5% on any amount above this.
If you make a withdrawal at any time then you only receive 1.35% interest on the balance of your account for that month .

If I have £10k in the account my interest gets added the following month, but the interest will only earn 2.5% because it is over the £10k .
I can't withdraw it because then my balance will only receive 1.35% interest that following month because I will have made a withdrawal .

So HSBC have now locked any future monies up at 2.5% .

I can't have the interest paid direct into another account , it has to go back into the Saver ( I asked customer service ).

Trying to maximise interest earning potential I would ideally like to move the interest payment somewhere paying more than 2.5% . 

Any suggestions ?

I've opened it last October, deposited less than £10k (calculated 10k minus 12 months interest at current rate). It stopped being competitive in February so I withdrew the whole balance on 1st March.  I've never put any money in this account since. 

My suggestion would be - withdraw on 1st July and put your money in a better account that pays the same or better interest and doesn't come with unnecessary complications.

thebigreaper

Thanks for the replies everyone .