HSBC launches 10% savings account
HSBC has launched a new regular savings account offering a whopping 10% interest, but the catch is it's only available to customers with an HSBC paid-for account.
The rate on the new HSBC Regular Saver is fixed for 12 months and savers must deposit between £25 and £250 a month.
If you're thinking of switching your account read: How to switch current accounts
To qualify savers must deposit between £25 and £250 in the first month. The maximum balance then increases by £250 each month, so if you only deposit £100 in month two you can invest £400 in the next month to a maximum balance of £3,000.
If you deposit the maximum of £3,000, you will earn approximately £163 in gross interest after the year is up, provided you deposit money in your account as soon as you open it.
However, the account comes with a slew of conditions. No withdrawals can be made in the 12-month period – if you close your account, interest will be charged at HSBC's flexible saver rate for the entirety of the period.
In addition, you must hold a qualifying HSBC account to apply, as the monthly payments must come out of an HSBC account.
The 10% rate is only available to HSBC Advance, HSBC Graduate (Advance) and HSBC Passport customers - all of which are fee-paying accounts.
10% is also payable to customers holding the HSBC Premier account, which requires customers to have a mortgage of at least £300,000 with the bank and income of £100,000 or £50,000 of savings or investments. A lower 5% rate is available to HSBC customers with simpler accounts.
Check out the current best savings rates on the market here
The account can be opened online, but once opened, it can only be managed in branch or on the telephone. If you would prefer online banking, consider looking elsewhere for a good home for your savings.
If you do open an account, remember to move your money after the 12-month anniversary. After this initial year, savings will be swept into a Flexible Saver (paying 0.5%), Preferential Flexible Saver (paying 0.1%) or a Premier Savings account (paying 0.1%).
Savings accounts only available to existing customers have becoming more common recently. Another such account that rewards existing customers is from First Direct, which pays 5% interest on its regular saver.
Louise Holmes, spokesperson for financial website Moneyfacts, says: "There has been a slight increase in the number of providers which require you to hold existing products with them such as a current account or a mortgage. Providers want to get as many customers in as possible by offering preferential rates."
An account opened with a clearing bank (few building societies offer current accounts) that provides the ability to draw cash (usually via a debit card) or cheques from the account. Some pay fairly minimal rates of interest if the account is in credit. Most current accounts insist your monthly income (salary or pension) is paid directly in each month and they offer a number of optional services – such as overdrafts and charge cards – which are negotiable but will incur fees.