HSBC Direct Raises Savings Account to 5.05%
Jun 30, 2006 - 9:13 AM by Ken Tumin
HSBC Direct just raised the rate on its Online Savings Account from 4.80% to 5.05% APY. This now matches Amboy Direct's Premium Online Savings Account as the highest no-minimum savings account.
There had been rumors of this yesterday so I called HSBC and asked about a possible rate hike. In the past, the customer service reps have been aware of new rates a day before they become public, but the CSR yesterday didn't acknowledge any new rate. I'm glad the rumor proved to be true.
I also asked the CSR if there were any sign-up bonuses available. The only one he mentioned was the $25 Best Buy Gift Card (see post). He said that you must have had the Best Buy credit card by June 1st to qualify for this offer.
For more info on opening the HSBC Online Savings Account, refer to this post.
Perhaps the competition from Citibank's 5.00% savings account was enough to get HSBC to respond with this rate hike. Since HSBC's 4.80% promo ended in May, its savings account rate has lagged those of other banks. It's good to see HSBC is back in the race.
There had been rumors of this yesterday so I called HSBC and asked about a possible rate hike. In the past, the customer service reps have been aware of new rates a day before they become public, but the CSR yesterday didn't acknowledge any new rate. I'm glad the rumor proved to be true.
I also asked the CSR if there were any sign-up bonuses available. The only one he mentioned was the $25 Best Buy Gift Card (see post). He said that you must have had the Best Buy credit card by June 1st to qualify for this offer.
For more info on opening the HSBC Online Savings Account, refer to this post.
Perhaps the competition from Citibank's 5.00% savings account was enough to get HSBC to respond with this rate hike. Since HSBC's 4.80% promo ended in May, its savings account rate has lagged those of other banks. It's good to see HSBC is back in the race.
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Srikanth (anonymous) - #1, Friday, June 30, 2006 - 10:29 AM
ING is also up. A miserly .10 to 4.35%
Brian (anonymous) - #2, Friday, June 30, 2006 - 10:56 AM
Hope ED piggybacks on this move...
C-Diddy (anonymous) - #3, Friday, June 30, 2006 - 10:59 AM
Hey guys I've kind of noob but I have a question ... what is the point of a Money Market Fund (like Vanguard) when these online savings accounts seem to be giving higher returns??
Anonymous - #4, Friday, June 30, 2006 - 12:25 PM
Good job HSBC, but will anybody actually macth the fed fund rate of 5.25%?
Anonymous - #5, Friday, June 30, 2006 - 12:56 PM
several have and even have surpassed it this and last week
Patrick (anonymous) - #6, Friday, June 30, 2006 - 1:05 PM
Its hard to understand why ING feels so confident that they can consistently offer half a percentage point under the leaders while enticing people to bank with them. The referral bonus is great, but that doesn't make the money stay. The only reasons people keep money in ING i can think of are their user interface features (daily interest earned, key-logger countermeasure, ect). It would be nice if they ended their expensive, pretentious advertising campaign and competed to offer the best rate instead of perpetually lagging way behind.
At any rate,(!) if anybody wants a $25 referral, just email me:
trick3LL at yahoo dot com
Anonymous - #7, Friday, June 30, 2006 - 1:26 PM
One of the reasons I've heard that people stay with ING is that they like the subaccount feature. I haven't seen another online bank that makes subaccounts available. (That personally doesn't sway me; it's just as easy for me to have two primary accounts and a backup at my bricks-and-mortar bank.) If I had a lot of different savings goals, I could see the appeal.
Anonymous - #8, Friday, June 30, 2006 - 2:23 PM
VirtualBank just increased their rates in the top two tiers. 5.13% for over 100K.
Anonymous - #9, Friday, June 30, 2006 - 3:23 PM
I was using HSBC Online. While the rates are competitive, I prefer GMAC superfast money transfer. Plus they have check writing abilities (Limit 3 a month) in case you need to deposit money directly into your regular checking account. HSBC took about 3 FULL business days to transfer but they deducted the money from my account after 1 day so there's a 2 day period where there is no money earning interest.
I also use Vanguard Tax Exempt Money Market Funds. Although not FDIC insured, to the best of my knowledge, no one has ever lost money in a money market fund. They are good for people in higher tax brackets. If you live in CA, NJ, OH, PA tax exempt money marets are a no brainer.
Anonymous - #10, Friday, June 30, 2006 - 4:18 PM
I would also second Vanguard MM account. For high tax brackets it is above 6% currently.
Anonymous - #11, Friday, June 30, 2006 - 4:20 PM
Also Vanguard MM accounts have unlimited check writing as long as the check amount is above $250.
Banking Guy (anonymous) - #12, Friday, June 30, 2006 - 6:32 PM
Thanks everyone for the rate updates.
About matching the fed funds rate. Banks have been slacking this year. Last year, most had rates above the funds rate (see graph). Even ING had rates above the funds rate early in 2005.
Keep an eye on RateEdge.com. It has maintained a 25 basis point lead on the funds rate consistently since it began last fall. Unfortunately, it's a credit union with a limited FOM.
About why people may prefer money market funds, refer to this Money article.
MMF's have been gaining on savings accounts this year. We'll see if savings accounts can keep the lead.
Anonymous - #13, Monday, July 24, 2006 - 4:10 PM
First, I want to thank you for this site and the information. I found your site thanks to a link from Money magazine.
With all the great info you have, I've recently signed up for the ING and the HSBC savings accounts.
Here are a few comments on both:
The ING web site is very user friendly, and I like the way they set it up to make my life easier. Signing up for the HSBC Account has been much more time-consuming. After filling out the information, they send you an email letting you know it was approved, but you can't actually get into your account until they send you a letter with your account number. So it's not as quick and as easy. Also, the web site is not the easiest to navigate compared to ING's.
Overall, I'm happy with the rate of the HSBC account, but I wish it were more user friendly. The ING web site makes me want to do business with them. I just wish they had better rates. If they did, I'd have three accounts with them (CD, Savings, IRA/Mutual Funds) rather than spreading them out over several different companies.
Thanks for all your info! I check in on a daily basis.
Anonymous - #14, Sunday, September 10, 2006 - 7:10 AM
I still have the HSBC accounts - both the Online Savings and the free checking.
Do not really use them any more. It is a HUGE hassle efficiently to get money into and out of the Online Savings; a real PITA. You can wait for several days before they actually begin to pay you the high interest rate. There are better ways and there are better accounts. HSBC is too big to be good. They are too smart by half.
Anonymous - #15, Tuesday, October 10, 2006 - 7:32 AM
For anyone who is still looking, RateEdge.com (http://www.rateedge.com) is now offering a $50 account opening bonus for an initial $5,000 deposit (for accounts opened through 12/31/06). The account does need to be open for 90 days. Hey...the best rate and $50.
Anonymous - #16, Tuesday, December 19, 2006 - 12:48 AM
does hsbcdirect do a hard credit pull or a soft pull?
Banking Guy (anonymous) - #17, Tuesday, December 19, 2006 - 6:18 AM
I believe they do not do a hard pull. According to this FW thread HSBC uses Equifax (SOFT Pull) and Chex to verify indentity, when opening an account.
Anonymous - #18, Tuesday, January 2, 2007 - 3:15 PM
As an FYI, RateEdge.com has increased the rate to 5.35% APY. Per BestBankRates.com, this is the top rate in the market.
Anonymous - #19, Friday, January 19, 2007 - 4:51 AM
Anyone know if HSBC and Emigrant allow external push/pulls like ING does? I'd love to link them to my Apple account.
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