HSBC has launched a new regular savings account offering an attractive seven percent interest rate.
The Regular Savings Account, available exclusively to existing the bank’s customers, allows savers to investavers to invest between £25 and £250 per month.
Interest is applied after the account matures in 12 months which could result in a sizable savings boost for customers.
If someone were to invest the maximum amount of £250 a month, the customers would earn a balance of £3,113.75 under the seven per cent interest rate.
By investing the maximum £250 monthly, savers could accumulate a balance of £3,113.75 after 12 months at the current rate.
This latest offering from HSBC comes amid a wave of high interest rate accounts either entering or remaining on the market.
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The bank is still providing competitive rates to customers
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Notably, Principality Building Society is providing customers an eight per cent AER with customers able to invest up to £200 per month.
On top of this, Yorkshire Building Society recently matched this interest rate, allowing £50 monthly deposits and three withdrawals over a year.
Similar to HSBC, first direct is offering a seven per cent AER for 12 monthly with deposits between £25 and £300 permitted but withdrawals not being allowed.
Concerns have been raised high street banks and building societies could be on the verge of slashing rates in reaction to actions from the Bank of England.
The central bank’s Monetary Policy Committee (MPC) recently slashed the base to five per cent with another cut priced in for later in the year.
Interest rate cuts from the Bank are likely to push financial institutions to reduce the rates of their own savings products.
Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, broke down to Express.co.uk why savers should consider HSBC’s latest offering.
She explained “The account may be enticing to those who wish to build a healthy savings habit or save towards a specific goal. Savers will be able to invest as little as £25 each month, up to a maximum of £250.”
However, Eastell cautioned that missed monthly payments are not allowed, emphasising the importance of careful financial planning.
Andy Mielczarek, the founder and CEO of Chetwood Financial, provided insight into the broader financial landscape.
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“The cost of living crisis has undeniably been tough on UK households and individuals. While the strong decline in inflation is encouraging, financial planning continues to be an uphill challenge.”
“Our research shows that people are proving that positive lessons can emerge from a harsh economy, with many taking proactive steps to protect their savings and achieve their financial goals.”
He emphasised the importance of exploring new savings options. Mielczarek added: “People are exploring novel alternatives to traditional savings options, scouring the market for the best deals.”
“With interest rates still competitive and inflation at target levels, now is the ideal time to secure the best long-term savings deals and optimise one’s financial future.”
