HSBC increases interest rates on some savings accounts

Rises of up to 0.75 percentage points follow increases at First Direct

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.


Jess Clark

The GuardianTramp

Related Content

Article image
UK banks urged to ‘accelerate’ savings rates by financial regulator
FCA tells NatWest, Lloyds, HSBC and Barclays to act more quickly to support consumers after profiteering claims

Kalyeena Makortoff Banking correspondent

06, Jul, 2023 @5:16 PM

Article image
MPs accuse banks of ‘blatant profiteering’ as savings rates remain low
Commons Treasury committee writes to four largest banks, saying they risk falling foul of incoming City rules

Kalyeena Makortoff Banking correspondent

03, Jul, 2023 @12:27 PM

Article image
Watchdog summons UK bank bosses to discuss weak savings rates
Financial Conduct Authority to meet executives on Thursday as part of its investigation into savings market

Julia Kollewe and Kalyeena Makortoff

04, Jul, 2023 @8:32 AM

Article image
UK’s biggest banks urged to increase ‘measly’ savings rates
MPs question why some savers are receiving only 0.25% despite 12 consecutive Bank of England interest rate rises

Rupert Jones

08, Jun, 2023 @11:54 AM

Article image
Regulator warns UK banks over miserly savings rates for loyal customers
FCA says it will consider ‘onerous interventions’ if it concludes ‘loyalty penalty harms’ not being addressed

Rupert Jones

20, Apr, 2023 @1:00 PM

Article image
Banks with lowest savings rates to face ‘robust action’, warns UK financial watchdog
FCA gives banks four weeks to justify savings rates as it lays out 14-point plan to monitor treatment of customers

Kalyeena Makortoff Banking correspondent

31, Jul, 2023 @4:12 PM

Article image
Savings: Britons urged to act soon as some interest rates pass 4%
Consumers have got used to poor returns on savings accounts, but there are now better deals

Miles Brignall

12, Jan, 2023 @7:00 AM

Article image
New account pays 9% interest as UK savers offered highest rates for more than a decade
Building societies offer rates over 7% – but deals have strings attached and are limited to existing members

Rupert Jones

01, Jun, 2023 @5:41 PM

Article image
What would negative interest rates mean for mortgages and savings?
Variable-rate mortgages may fall a little, and it seems unlikely banks will charge to hold savings

Hilary Osborne

21, May, 2020 @2:40 PM

Article image
Why are UK banks taking so long to pass higher interest rates on to savers?
Delay is under intense scrutiny from City watchdog – but it may not be simple profiteering

Anna Isaac

23, Jun, 2023 @4:36 PM