This attention grabbing account from HSBC promises to pay a staggering 8% gross annual interest on your savings. The rate is fixed for the one year duration of the account, but there are unsurprisingly catches.
Firstly, you'll need to have a HSBC Premier or Advance account to enjoy the 8% rate; other HSBC current account customers get a less benevolent 4%. And if you're not willing to open a HSBC bank account you can't apply for the regular saver account.
Secondly, you can only save up to £250 per month (the minimum is £25), meaning a maximum balance of £3,000 over the year. Save the maximum amount at 8% and you'll earn total interest of about £129 before tax, equal to £103 for basic rate and £77 for higher rate taxpayers.
Thirdly, you're not allowed to make withdrawals and if you close the account before the end of the one year term you'll only receive interest at the rate paid on the HSBC Flexible Saver account, currently just 0.05%!
If you already have a HSBC Premier or Advance account then this account is worth taking advantage of, provided you can save £250 (or close to that) a month for a year. You won't make a fortune, but could pocket up to £103 in total, after tax, for the sake of filling in an application form. Although I would strongly suggest you consider whether having a Premier or Advance account is actually worthwhile.
If you have one of the other HSBC bank accounts that qualifies for the 4% regular saver rate then it's worth considering, but with some shopping around you can currently earn around 3% on your savings in a tax-free cash individual savings account (ISA) - probably a better long term option for many.
But for the majority of us who don't currently have a HSBC bank account, is it worth opening a Premier or Advance account to access the 8% regular saver account?
To open a HSBC Premier account you need to be earning at least £100,000 a year or have at least £50,000 of savings and investments with HSBC, plus pay your salary into the account. In return for this the main ‘benefit' seems to be access to HSBC investment advice, i.e. HSBC will simply try to make more money out of you by selling investment products. The included travel insurance is probably a little more worthwhile, but you can buy similar policies for around £70 a year.
The HSBC Advance account will cost you £12.95 per month (£6 for 1st three months) in return for "£500 of benefits and services a year" (e.g. travel insurance & breakdown cover). My quick estimate puts the true value of the benefits (assuming you shop around) at about £125 a year - poor value for money given you'll be charged £155 a year.
So in both cases the answer is no, don't bother.
This account is a marketing gimmick that will only genuinely benefit a few. If you don't already bank with HSBC this account gives little reason to start now.
Read the full review at http://www.candidmoney.com/candidreviews/review29.aspx
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