A BANK giant with 14million customers is making a big change to accounts from today.
HSBC will reduce the interest rates on its easy-access Premier Savings account today, February 24.
The rate for balances below £50,000 will drop from 1.98% to 1.74%.
And that is not all, HSBC has said the rates on this savings account will again change in April.
In two months, the interest will drop from 1.74% to 1.98%.
An easy access savings account lets you get your hands on your cash without restrictions.
There is usually no charge for withdrawing money from your account.
HSBC’s Premier Savings account is only available to those who qualify for its Premier banking services.
Typically, customers must have £50,000 already in an HSBC account or make £100,000 a year.
HSBC will also lower the rates on its more accessible Flexible Saver account from 1.49% to 1.34% on April 17.
A flexible savings account allows you to save and access your money without a fixed term.
You can deposit and withdraw money as often as you like.
At 1.34%, HSBC’s offer is at the lower end of what is on the market.
Chip Instant Access Account offers a 4.85% AER, with a minimum deposit of £1.
Meanwhile, Hargreaves Lansdown offers 4.51% AER, and the minimum deposit is also £1.
ALL CHANGE
It comes after the Monetary Policy Committee (MPC), the BoE’s rate-setters reduced the base rate from 4.75% to 4.5% earlier this month.
The base rate is used by lenders to determine the interest rates offered to customers on savings and borrowing costs.
A base rate cut can mean that mortgage rates are lowered, which is good news for homeowners.
But savers can be left with the short end of the stick as the interest rate they earn on their savings can also drop.
Markets are expecting the base rate to drop as low as 4% by the end of the year, which would see the interest rate on the Saver account reduce even further.
Of course, if the base rate increases again then the account will mirror this.
Numerous banks have been cutting their savings rates following the Bank of England’s decision.
Barclays slashed the rates on its Everyday Saver and Rainy Day saver accounts.
For the Everyday Saver, the interest rate has been lowered from 1.51% to 1.26% on balances up to £10,000.
The Rainy Day Saver, which is for Barclays Blue Rewards members and Premier Banking customers, is reducing its rate from 5.12% to 4.87%.
Where to find the best savings rates
Many savings accounts offer miserly rates meaning that money is generating little or no return.
However, there are ways to get your cash working hard. Sun Savers Editor Lana Clements explains how to make sure you money is getting the best interest rate.
Easy access savings accounts offer flexibility for customers, meaning they can dip in and out of cash when needed. However, the caveat is that rates can change at any time.
If you’re keeping your money in an easy access account, you’ll need to keep checking whether it’s the best paying account for your circumstances and move if not.
Check in at least once a month to see what is happening in the market.
Check what is offered by your bank – sometimes the best rates are for customers only.
But do search the wider market as often top savings accounts are offered by lesser known providers.
Comparison sites are a good place to check for the top rates. Try Moneyfactscompare.co.uk or Moneysupermarket.
You can search by different account type. You’ll usually get a better interest rate if you can lock your money away for a fixed amount of time, but it’s always a good idea to keep some money in an easy access account in case of emergencies.
Don’t overlook regular savings accounts often pay some of the best rates, but you’ll need to commit to monthly payments. This can be a great way to get into a savings habit while earning top rates at the same time.
