Update 2/08/10: The standard online savings account APY is now 1.20%.
HSBC Direct has just extended its 3.50% APY rate-guarantee for its Online Savings Account to September 15, 2008 (it used to be August 15, 2008). The rate applies to its no-minimum Online Savings Account.
HSBC Direct first came out with this 3.50% promo on June 2nd. Perhaps the competition from several other online savings accounts that have recently raised their rates to 3.50% APY has caused HSBC to extend this offer. The good thing about this offer is that you'll know the rate won't go down at least until 9/15. However, since it is a promo, it seems likely the rate will eventually go down.
As you can see from my rate summary, a 3.50% yield is now near the top for non-promo savings account rates. There are just a couple that offer 3.75% APY.
As I mentioned when HSBC first launched this 3.50% promo, the main downside with HSBC Direct is their slow ACH transfer times. Bank-to-bank transfers that you initiate from within your account can take a minimum of 3 days with 2 days of no interest. On the positive side, the ACH system allows unlimited links to other bank accounts, and these links can be set up online via trial deposits. Also, unlike Citibank, they don't impose small dollar limits on the transfers.
For those concerned with online security, HSBC Direct seems to have one of the most secure online logins. In addition to the password, you have to enter a security key via a virtual keyboard. However, for those who like to quickly access their accounts, this could be a downside. One thing that has annoyed me about this login system is that if you mistype more than twice, it can lock you out. And then you have to call to get the login reset so you can try again.
Another plus for HSBC Direct is that it's part of HSBC Bank USA which is a subsidiary of the HSBC Holdings plc. According to the annual Forbes list of the world's largest firms published on April 2008, HSBC is the world's largest company and the world's largest banking group (source). HSBC is based in the United Kingdom.
I have a more complete list of HSBC Direct's Online Savings Account features at this 2007 post.
HSBC Savings Account Bonuses
There are two bonuses for HSBC's low-interest savings accounts: $50 for opening a Premium Money Market Plus Savings Account or $25 for opening a Regular Savings Account. The expiration date is 7/31/08. These have regularly been extended since I first reported on these in February.
Unfortunately, it's not a bonus for the Online Savings Account. But you can sign up online and you can use your Online Savings Account to meet the minimum balance requirements to avoid monthly fees.
The $50 bonus requires an initial deposit of $3,000 of new money. Only customers with an Interest Checking, Interest Checking Plus, EmployeePlus, Interest Free Checking or HSBC Premier checking account are eligible to open a Premium Money Market Plus account.
The $25 bonus requires an initial deposit of $500 of new money and authorize automatic transfer of $10 or more from your HSBC checking account to your HSBC savings account.
The terms and charges disclosures for these accounts are available at this HSBC page.
There was a similar deal to this in February 2007. In that 2007 post some readers reported being told by HSBC that this was only for those who received a mailer. You may want to call to confirm the bonus before signing up. Also, be sure to save the webpage for future reference.
In 2006 I signed up for the Smart Package for a $50 cash bonus. One nice perk of this Interest Checking Account is that your first box of checks is free. Regarding hard credit inquiries, I did not receive any for opening the checking or savings accounts. Please refer to my 2006 HSBC post for details of opening an HSBC checking account.
2/08/10: 1.20% APY
9/23/09: 1.35% APY
8/12/09: 1.45% APY
5/15/09: 1.55% APY
1/28/09: 2.45% APY
9/16/08: 3.25% APY (end of promo)