HSBC interest rate ramped up with savers to receive £400 boost
HSBC customers in line for potential cash injection
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HSBC is set to raise the interest customers can enjoy on their Online Bonus Saver account from 3.5 per cent to 4 per cent on balances up to £10,000 from Thursday onwards.
Though the monthly rate does drop when the customer withdraws from the account, an untouched instant-access savings rate tops the best buy savings table.
Should a HSBC customer dip into their Bonus Saver account, the rate drops down to 1.3 per cent.
However, HSBC customers currently earn no interest on cash in current accounts, and those using HSBC’s standard easy-access rates earn 1.3 per cent anyway as a Flexible Saver.
HSBC will close 114 branches in total in 2023PAOn balances that exceed the £10,000 cap, the Bonus Saver offers 2.3 per cent.
Those who bank with Barclays should also consider the bank’s offer of an exclusive 5.12 per cent easy-access rate on balances up to £5,000.
Placing £5,000 in this Barclays Rainy Day Saver would yield £250 in interest after one year, while £10,000 in HSBC’s Bonus Saver would earn £400 of interest over 12 months.
However, the Rainy Day Saver dries up should customers exceed the £5,000 limit, after which point customers can expect just 0.7 per cent.
Rainy Day Saver account worth considering for Barclays customers
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A further evaporation of funds comes through the need to pay £5 a month to become a Blue Rewards member.
This does come with other advantages, such as a £5 monthly cashback when two direct debits are paid out of the bank account.
Again, this deal eclipses the 0.7 per cent offered by the Barclays Everyday Saver.
Santander have also weighed in, offering those customers who hold a Santander Edge current account four per cent interest on balances up to £4,000.
Santander have a variety of cashback schemes
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In this scenario, no interest is paid on balances that exceed £4,000 and the figure factors in a 0.5 per cent bonus put on for the first 12 months only.
The Santander account comes with a £3 monthly charge but cashback offers chip away at this monthly spend.
Santander offers 1 per cent cashback on debit card spending related to grocery shopping and transport, as well as 1 per cent on household bills, both capped at £10 a month.
Their Everyday Saver pays out 0.85 per cent, while the eSaver stands at 2 per cent, making the returns a no-brainer for Santander customers.
Another option for customers are tax free ISAs, where every tax year, individuals can place up to £20,000 of savings into an ISA set up.
A customer can choose between a Cash ISA, stocks and shares ISA, innovative finance ISA, and a Lifetime ISA.
The big draw of a Lifetime ISA is that it offers a 25 per cent Government bonus when you use your LISA to buy a first home or to supplement retirement income.
Customers are capped at placing £4,000 a year into Lifetime ISAs, which offer interest rates up to 3.5 per cent.
The Government will top up payments to a LISA by 25 per cent per year up to £1,000, so if you saved £4,000, the Government would add £1,000 before you have even seen returns from interest.
To keep the 25 per cent Government bonus, you need to use your LISA to buy your first home or avoid withdrawals until your 60th birthday.
A LISA can be opened by UK residents aged between 18 and 39, and holders can make deposits until their 50th birthday.