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 1.49%.
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 earn £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’s 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.
[bc_video account_id=”5067014667001″ application_id=”” aspect_ratio=”16:9″ autoplay=”” caption=”Bank of Scotland to Close 22 Branches: A Digital Transformation” embed=”in-page” experience_id=”” height=”100%” language_detection=”” max_height=”360px” max_width=”640px” min_width=”0px” mute=”” padding_top=”56%” picture_in_picture=”” player_id=”default” playlist_id=”” playsinline=”” sizing=”responsive” video_id=”6368648461112″ video_ids=”” width=”640px”]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 products, as well as on loans and mortgages.
[authenticated-scripts src=”%3Cscript%20class%3D%22palin-poll%22%20src%3D%22https%3A%2F%2Fwww.thesun.co.uk%2Fpollingwidgets%2Fv3%2Fwidget.js%3Fquestion_id%3D107699%26game%3Dpolling%22%3E%3C%2Fscript%3E” type=”embedded” width=”100″ /]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%.