I’m a big believer that loyalty rarely pays in the banking sector, so if you can get a better deal with your current account elsewhere it’s worth looking in to. You can get switching bonuses, cashback and high interest – read my 6 ways to make your bank pay you article for more details. So how does this new account measure up?
Open the HSBC Advance Bank Account and you’re eligible to open two customer only savings accounts.
1. High interest ISA
The first is the HSBC Loyalty Cash ISA. You get 1.5% AER which is good for instant access ISAs but not great compared to some current accounts from other banks. However, as long as you pay in a lump sum of £300 or a monthly payment of £25, you’ll have the account topped up by £10 every month for the first year. That’s a free £120.
If you miss a month, you won’t get the tenner for that month. Also, the 1.5% interest on the ISA will drop to 0.5% AER after the first year.
If have you already have an ISA with a low rate, you can transfer that money in. Read my ISA basics for a little more info.
2. High interest regular saver
You’ll also be able to open a 6% AER Regular Saver (it’s normally only 4%). This accounts let you pay in £250 every month for 12 months. If you do that for the whole year you’ll get £97.89 interest before tax on a final balance of £3,000, which is the equivalent of 3.26%.
It’s not a bad rate if you are saving month by month, though if you have a lump sum you can get better elsewhere.
In total that means at the end of a year you’ll have made around £198 in interest on £3,300 of cash, which works out as the equivalent of 6% after tax! Pretty good.
3. You don’t have to switch
Some accounts only give the free cash if you’ve switched and closed your old account. Here you don’t need to, so you can just open one as an extra account.
To get the HSBC Advance account you need first to pass a credit check (though that’s the case with all new accounts).
You also need to pay in £1,750 every month. That’s roughly an annual salary of £26,500 being paid in every month.
However you don’t need to keep that money in there. You can transfer it straight out again into another account (or to pay your rent and bills!) and have a balance of zero.
So is it any good?
I think it looks like a decent way to get some free cash, and all you need to do is remember to pay in the monthly minimum. I’m certainly going to sign up for one.
At the end of the 12 months I’ll either close it down or switch it to a bank that offers a £100 switching bonus!
There are lots of other accounts you can chose from though, so if you’re only planning on opening one you might be better with one of those.
Also I wouldn’t switch to this account. Halifax have a deal right now with a £125 bonus and £5 a month in interest. That’s going to be a lot easier!