HSBC to increase regular saver interest rate to 5%

The interest rate on HSBC’s Regular Savings account will be increasing by 4%.

HSBC has announced that it is increasing the rate on its regular saver account by 4%. From Thursday, 1 December 2022, the new rate of 5% AER will take effect. It also plans to increase its one-year fixed rate saver to 3.5% AER and all its ISA products will see a 0.9% rise.

In addition to this, the bank is waiving fees for early closures on its fixed rate saver accounts if customers need to access their money early.

Tom Wolfenden, HSBC’s head of retail in the UK, said “while the cost of living may be increasing, emergencies will still happen, so having a small safety net that will help cover you in the event of something unexpected happening can be extremely important”.

HSBC Regular Saver account

After years of ultra low interest rates, we are starting to see rate rises from several big savings providers. Regular savings accounts tend to offer more competitive rates. Typically because they have restrictions on how much you can deposit each month.

In the case of the HSBC account, you can pay in between £25 and £250 each month. However, if your regular payments are less than £250 a month, you can carry your allowance over and pay more in later months (up to a total of £3,000).

It’s also important to note that in order to benefit from the 5% rate, you won’t be able to make partial withdrawals at any time during the first 12 months of the account. At the end of the 12 months, HSBC will transfer your balance to either its Flexible Saver or Premier Savings account.

In order to be to apply for the regular saver you must have an HSBC current account which you maintain for the 12 month duration.

Linked savings accounts

There is an increasing trend towards savings accounts with higher interest rates being offered alongside a provider’s current account.

Like the HSBC Regular Saver, NatWest’s Digital Regular Saver is also only available to savers who open a NatWest current account or use an existing one.

Also this week, Santander launched its Santander Edge saver which offers 4.00% AER on balances up to £4,000. Once again, savers can only access this account if they hold a Santander Edge current account.