HSBC Bank has issued a notice that on Nov. 2, it will be changing statements and interest postings from monthly to quarterly. This is a very significant change because HSBC rules are that if you close an account before interest is posted, you lose all accrued interest - that is, you could lose up to three months of interest because of this change.
This could especially be an issue for those who, like me, got into the Promo Advance (or Premiere) Savings that was offered back in June, giving 1.5% APY on the liquid savings account until Jan. 19. The more money you have in that account, the more significant this is -- many, like me, put CD amounts in that savings, and for some people, that is quite a substantial amount.
Under either the monthly or quarterly interest posting, if you waited until Jan. 19 to close your account, you would lose 18 days of accrued interest (interest posts on the first of the month, not the last day of the month). For some, that might not be much, but if you have substantial money in this, that could be a substantial loss, maybe $100 or even $200 for 18 days, more than half the month, of lost interest.
So, you might have figured on drawing it down to minimum (which would be $10,000 to avoid a $20 monthly fee) and leave only that in for 12 more days until the interest posted. But now, you will have to leave that in for 2 1/2 months in order to avoid losing accrued interest -- but that would make no sense since the interest they are offering on the regular Advance savings, which your account will convert to on Jan. 19, now is only .05% APY, and you can get a LOT better at a LOT of other places.
My thinking is that the only way to deal with this issue is to close the account on Jan. 2, after the interest posts the evening of Jan. 1. Of course, even that becomes an issue as Jan. 2 will be a Saturday - and I'm not even sure they are open that day to close accounts! So maybe on Monday, Jan. 4, and lose three days of interest.
An additional issue here is that there is a $25 penalty if the Promo account is closed before Jan. 1, so you don't want to close it before that. At every turn they are hitting us with a penalty.
I took the account because I just could not accept rolling my maturing CD over to less than 1.5%, and then this was offered. I figured it gave me five months to find another CD. I still have three more months to do that -- but even if I do, I will have to leave $10,000 behind until Jan. 1 or get hit with that $25 penalty. If I don't find another CD before that, I will have the full amount there still.
Just an alert so people can figure out what they want to do about this.
The real problem is that HSBC doesn't pay out accrued interest if you close your account before it is posted. Now they have exploited that rule to rob you more by changing the posting from monthly to quarterly. If it were not for the loss of interest, this change would be inconsequential.