HSBC Direct has just increased the yield on its 6-month Online CD to 4.00% APY. HSBC Direct just recently started offering online CDs. They claim to have easy account management. I haven't tried to open one, but it appears not to be as easy as ING Direct. However, one thing similar to ING Direct is a very small minimum deposit requirement. HSBC Direct's minimum CD deposit is only $10.
Some of the CD details listed at HSBC's FAQ Overview Page include:
- 10 calendar-day grace period when you can close CD without a penalty
- Early withdrawal penalty equals 30 days of simple interest
- At maturity the interest will be posted to your account
If you are a new HSBC Direct customer, you can send an electronic bank-to-bank transfer from a non-HSBC account, or mail us a check or money order. If you are an existing HSBC Direct customer, you can fund your HSBC Direct Online CD using one of your existing HSBC Deposit Accounts or mail us a check or money order if you wish to fund your HSBC Direct Online CD from an non-HSBC account.
One thing I don't like about the account opening process is that the interest rate doesn't lock at the time of the application. According to HSBC, "your account will receive the interest rate and annual percentage yield in effect on the date it is opened. CDs cannot be opened before the application process is finalized."
It appears that managing the CD can't be done all online. According to HSBC's Managing Your CD FAQ Page, you have to call to transfer money out of the CD during the grace period. Beneficiaries can be added to a CD by sending the beneficiary's name via BankMail. Only one beneficiary can be added to an Online CD.
HSBC Direct's online no-minimum savings account continues to be competitive. The current yield is 3.25% APY. Please refer to my Online Savings Account review for more details.
HSBC Direct is part of the HSBC Holdings plc which is one of the largest banking groups in the world (see background). The US arm is HSBC Bank USA, N.A. It's FDIC insured. One interesting note is that it currently only has a 2 star safe-and-sound rating (below peer group) at Bankrate.com based on 6/30/08 data.
Thanks to the reader who mentioned this new CD special in the finding the best deals post.