How many days interest will I lose?

w00519773

I have an online bonus saver with HSBC.  I am told that I will lose a months worth of interest if I make a withdrawal.  I want to make a withdrawal so the account balance becomes zero and then next month (when a 1 year fixed rate saver matures) I want to put the money back.  Here are the steps:

1) Monthly interest applied as normal on 01/05/24.
2) I withdraw £5000 on 02/05/24 and balance becomes zero.
3) No interest is applied on 01/06/24 for the £5000 in the account from 01/05/24-02/05/24.because a withdrawal was made.
4) £5000 deposit made on 02/05/24 and interest calculated daily from 0/05/24 and applied on 01/06/24.

Have I understood this correctly? Effectively I am losing one days interest (for the £5000 in the account from 01/05/24-02/05/24).

friolento

Afraid, you have not understood it correctly. If you make a withdrawal, you’ll receive the standard rate of interest (currently 2.00% AER / 1.98% gross) for that month.

https://www.hsbc.co.uk/savings/products/online-bonus-saver/

mebu60

My understanding is that the lower, standard rate of interest, is applied in any month where there is a withdrawal meaning you will have the lower rate of interest applied throughout May in your scenario above. You will lose a month of bonus interest.

allegro120

You'll get a variable rate of 2% in any calendar month you do make a withdrawal or close your account.  

The best day to withdraw is the 1st of the month so you don't loose any interest, providing you transfer this money to the account that pays a decent interest.  After that there is no point depositing until the 1st of the next month unless you are happy with 2%.

HSBC OBN is not a great account, there are plenty of straight forward easy access accounts that pay far better interest.

w00519773

allegro120 said:

You'll get a variable rate of 2% in any calendar month you do make a withdrawal or close your account.  

The best day to withdraw is the 1st of the month so you don't loose any interest, providing you transfer this money to the account that pays a decent interest.  After that there is point depositing until the 1st of the next month unless you are happy with 2.3%.

HSBC OBN is not a great account, there are plenty of straight forward easy access accounts that pay far better interest.

Thanks.  I think that clears it up - if I withdraw the full amount on the 1st (when the interest is applied) and then deposit the same amount on the 1st the next month then I lose no interest on a positive cash balance.  Have I understood that correctly? I am going to look into other accounts.

allegro120

w00519773 said:

allegro120 said:

You'll get a variable rate of 2% in any calendar month you do make a withdrawal or close your account.  

The best day to withdraw is the 1st of the month so you don't loose any interest, providing you transfer this money to the account that pays a decent interest.  After that there is point depositing until the 1st of the next month unless you are happy with 2.3%.

HSBC OBN is not a great account, there are plenty of straight forward easy access accounts that pay far better interest.

Thanks.  I think that clears it up - if I withdraw the full amount on the 1st (when the interest is applied) and then deposit the same amount on the 1st the next month then I lose no interest on a positive cash balance.  Have I understood that correctly? I am going to look into other accounts.

Yes. And when you open a better paying account you might not want to come back to OBS.  
I have this account, it paid a leading rate for a couple of months in late 2022, but since then my balance stays £0.  The rate is too low and this penalty for withdrawal is very inconvenient.

Julezy101

allegro120 said:

You'll get a variable rate of 2% in any calendar month you do make a withdrawal or close your account.  

The best day to withdraw is the 1st of the month so you don't loose any interest, providing you transfer this money to the account that pays a decent interest.  After that there is no point depositing until the 1st of the next month unless you are happy with 2%.

HSBC OBN is not a great account, there are plenty of straight forward easy access accounts that pay far better interest.

Hello,
I've just made a transfer out of my HSBC OBS account - does this mean I will only get the 2% interest this month or will I get the full 4% as I've made the transfer on the 1st of the month?

Thanks
 

allegro120

Julezy101 said:

allegro120 said:

You'll get a variable rate of 2% in any calendar month you do make a withdrawal or close your account.  

The best day to withdraw is the 1st of the month so you don't loose any interest, providing you transfer this money to the account that pays a decent interest.  After that there is no point depositing until the 1st of the next month unless you are happy with 2%.

HSBC OBN is not a great account, there are plenty of straight forward easy access accounts that pay far better interest.

Hello,
I've just made a transfer out of my HSBC OBS account - does this mean I will only get the 2% interest this month or will I get the full 4% as I've made the transfer on the 1st of the month?

Thanks
 

The balance you have in this account between today and 30th June will earn you 2%. The balance you had there before today should have earned 4%.

Julezy101

Yes I thought so. So even withdrawing on the 1st of the month still means you lose the extra interest and there is no way round it. Like someone else commented, it is not a great savings account. I use it as I use their current account as my main one.