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The bank confirmed it will be hiking interest rates for the sixth time this year, with the rise coming after a series of increases to the Bank of England Base Rate. From December 1, 2022, HSBC’s Regular Saver will see its rate rise from one percent to five percent. On top of this, the bank outlined future changes to its ISA products and another interest rate rise for its One year Fixed Rate Saver.
Tom Wolfenden, the bank’s head of Retail in the UK, outlined why HSBC is opting to hike rates for the sixth time this year.
Mr Wolfenden explained: “Having a savings habit is something that we would encourage as it can be invaluable if there is an emergency and you need to replace your washing machine or have some unexpected expenditure on your car.
“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 expected happening can be extremely important.
“To help encourage a savings habit and to help customers make their money grow, we are increasing the interest rate on our Regular Saver, to 5.00 percent.
“The rate is fixed for the year from the time of opening, however at this time to help with the increased cost of living and to support those who currently have a Regular Saver open, we are increasing all current Regular Saver accounts to the new rate of five percent with effect from December 1. Customers do not need to do anything, it will be updated automatically.”
All live Regular Saver accounts will automatically be updated by HSBC and customers will not have to do anything.
Outside of this savings account, the bank confirmed that the One year Fixed Rate Saver will see its interest rate raised to 1.25 percent to 3.50 percent.
For this account, HSBC is waiving early closure fees to further assist customers looking to manage their finance at ease.
Savers who have an ISA account with the bank will also get an interest rate increase of 0.90 percent, which will be applied to all ISA products.
In light of the cost of living crisis, HSBC is offering a wide range of resources and support to assist those struggling the most.
Mr Wolfenden added: “During the challenging months ahead, we’re committed to being there for our customers and helping them when they need us most. At a time when customers are facing more financial pressures than usual, waiving the fees on early access to a fixed term savings account may help with unexpected expenses.
“We would also encourage customers to make the most of our wider support package. Anyone can sign up to a session with a financial wellbeing consultant, regardless of whether they are a customer or not.
“It can be really helpful to get an outside perspective on ways to manage money – a good first step is to take our financial fitness test and get your score – you’ll then be signposted to support available.”
One of the factors contributing to the Bank Rate rise in the cost of living is the UK’s soaring inflation rate, which is currently at a 41-year high of 11.1 percent.
To address this, the Bank of England’s Monetary Policy Committee (MPC) has hiked the Bank of England Base Rate to three percent.
Following the central bank’s move, various banks and building societies have raised interest rates of their products.
Among them is HSBC but it remains to be seen whether the consecutive rate hikes of the last few months will continue.