HSBC increases interest rates on some savings accounts
Customers of HSBC will receive a boost to their savings after the bank announced an increase to interest rates, as Britons enjoy some of the highest rates in more than a decade.
The lender is increasing rates on some of its savings accounts, with increases of up to 0.75 percentage points.
The high street bank said on Friday that the changes would come into effect from next Thursday.
HSBC’s MySavings and Premier Savings youth accounts will rise 0.75 percentage points to 5%.
There will be a 0.5 percentage point increase to 4% on its Online Bonus Saver instant access account for balances up to £10,000. Balances over £10,000 will increase by 0.3 percentage points to 2.3%.
The boost includes a jump of up to 0.5 percentage points on the bank’s Isa range, with its Premier Loyalty Isa at 3%. Its one-year, fixed rate saver interest rate will increase by 0.4 percentage points to 4.4%, with two-year fixed rate saver rising by 0.35 percentage points to 4.45%.
HSBC’s Regular Saver account interest rate will remain at 5%.
Savings rates are beginning to rise after a prolonged series of interest rate hikes from the Bank of England as it attempts to reduce inflation. However, some banks have faced criticism that their savings rates are not as generous as they could be.
An inflation-beating interest rate of 9% was launched by Saffron building society on Thursday. However, it is only available to people who have been members of the Essex-based institution for a year or more.
The announcement came hours after Skipton building society launched an account with a rate of 7.5%.
Pella Frost, the HSBC UK head of everyday banking products, said: “Over the last few years we have had to learn to adjust to the unexpected and build our resilience. Change can have a significant impact on our lives, sometimes financially.
“We know that having a savings habit helps build financial resilience and means that you’re better placed to handle any disruption.
“Our new savings rates will hopefully help encourage people to revisit their savings habits. We know that eight in 10 people are taking action to tighten their belts and reduce their outgoings in the face of cost of living challenges, which is a great starting point to help build financial resilience.”
On Thursday, First Direct announced savings rate increases that will also take effect from 8 June. Among the increases, a cash Isa rate will rise from 2.3% to 2.5%.
It follows the launch this week of First Direct’s one-year, fixed-rate saver account, at a rate of 4.6%.
As well as increasing rates on some accounts, First Direct is still offering 7% on its regular saver account.
Inflation, as measured by the consumer prices index, stood at 8.7% in April, while the Bank of England base rate is currently 4.5%.
Savings rates have been rising, yet the returns offered by some widely held high street bank accounts are still less than 1%.
MPs criticised bank bosses over their low savings rates earlier this year, particularly on instant access accounts, saying that they seemed to be “taking advantage” of loyal customers.