HSBC Introduces High-Yield Savings
Stung by high-yield accounts offered at smaller (at least in Canada) financial institutions such as ING Direct, President's Choice and others, HSBC has revealed its new high-yield savings account at an initial rate of 3%. This compares favourably with President's Choice, is slightly less than ING, and is better than most of the other major banks (Royal, CIBC, TD). Scotiabank and BMO are the only ones of the "big five" to even come close, Scotiabank with its "Money Master" account yielding 2.8% on the full balance, and BMO with a savings account that now yields 2.6%.
There is no minimum balance requirement and electronic transfers to another HSBC account are free.
This is an interesting development on the Canadian banking scene. Several years ago, when interest rates declined from their heights in the '80s and early '90s, the major banks began offering pitifully low rates on savings accounts - and they got away with it. It was not (and is not!) uncommon to see a "savings" account with an annual interest rate of 0.05% - that's not five percent, that's one-half of one-tenth of one percent!
For example, the standard savings account at TD Canada Trust yields 0.05% on balances less than $2,500.00. The Royal Bank offers either 0.05% or 0.10% on low-balance savings accounts. CIBC is 0.10%. What that means is that if you have a savings account with $1,000.00 on January 1, and make no deposits or withdrawals, then at a rate of 0.10%, on December 31 you will have a whopping $1,001.00! At a rate of 0.50%, you will have $1,000.50. And that doesn't even take into account any fees that you have to pay for actually having the temerity to make a withdrawal from your account.
Obviously, these rates are pathetic and it's about time that the big banks became competitive with the smaller financial institutions and offered a reasonable return on savings accounts.
Until recently I had never even heard of ICICI Bank. However, with my recent review of interest rates at the major banks on savings accounts, theirs caught my eye. ICICI pays 3.50% annually on both Canadian dollar and U.S. dollar savings accounts. Although this may ... Read
Earlier this week, I reported that HSBC was introducing a new high-yield savings account to compete against the likes of ING Direct and President's Choice. Now, they've gone one step further and increased the rate on their savings account. HSBC now pays 3.10%, which is ... Read
