£120 Switching Incentive from HSBC

Written by Karen Bryan

hsbcIf you’d like to earn some extra cash, take a look at the HSBC £120 switching incentive.

If you open an HSBC Advance current account by 31 August 2015 and then use the HSBC switching service to transfer an existing current account within two months of opening the HSBC Advance account, you’ll receive a £120 cash bonus.

You’ll need a good credit rating to be accepted for an HSBC Advance account. This account requires a sizeable minimum monthly pay in of £1,750. This is the largest I’ve seen.

If your earnings aren’t as high as this, you could use savings to pay in the £1,750 and then withdraw that money the next day to put back into an instant access savings account. Or, if you like me are playing the money shunt game to fund various high interest current accounts, you could set up a standing order to fund another account.

At least you don’t need to have a minimum number of direct debits set up on the current account which you switch to the HSBC Advance account.

There are two additional reasons to switch to the HSBC Advance account:

  1. If you open an HSBC Loyalty Cash ISA account into which you deposit, or transfer in, a minimum lump sum of £300, or pay in at least £25 a month for 12 months, then you’ll receive the HSBC Save Together bonus of £10 a month for 12 months. The HSBC Loyalty ISA currently pays a rate of 1.5% to holders of the HSBC Advance Current Account. The rate drops to 1.4% on 31 July 2015. This is still quite a competitive rate for a Cash ISA. If you have an instant access Cash ISA paying a similar rate to the HSBC Loyalty Cash ISA, you’ll  probably be better to transfer that money as the £10 a month bonus will significantly increase the rate of interest you’ll receive. However, as the rate paid on the HSBC Loyalty Cash ISA is variable, you’d need to keep an eye on the rate. If you already have a fixed rate Cash ISA, there will probably be a penalty for early withdrawal.
  2. You’ll have access to the HSBC Regular Saver. This 12 month account pays a fixed rate of 6% on monthly payments of between £25 – £250. You need to be sure that you’ll keep the account for the full 12 months. If you miss a payment or make a withdrawal, the account will be closed and the rate paid will drop to 0.1%.

I was sufficiently tempted to apply for an HSBC Advance current account by the combination HSBC £120 Switching Offer and the 6% paid on the HSBC Regular Saver. I have a Bank of Scotland Vantage Current Account which I can use for the switch, and I can set up yet another standing order in the shunt game.

Initially, I wasn’t sure if I’d bother transferring my Cash ISA. I’ve around £5,000 in a Nationwide Regular Saver Cash ISA which currently earns a variable rate of 2.0%. Assuming that rates stay the same on both Cash ISA accounts and that I don’t add more money, I’d earn £100 in tax-free interest on the Nationwide account over the next 12 months. If I transfer the £5,000 to the HSBC Loyalty Cash ISA, I’d earn £70 in tax-free interest, but the £120 bonus would increase that to £90. I decided that for the additional £90, I’d carry out the transfer into the HSBC Loyalty Cash ISA.

Update 22 July 2015 –  So much for my plans, I received a letter from HSBC this morning informing me that I did not meet their required internal scoring for this account and offering me their standard current account, The letter said that I’d need to go into a branch to open the account. The HSBC Bank Account requires minimum monthly funding of £500.

I had a look at the benefits of being an HSBC Bank Account customer.

  1. The HSBC  Regular Saver pays a lower fixed rate of 4%, versus the 6% paid to holders of the HSBC Advance current account.
  2. The HSBC Loyalty Cash ISA pays a lower rate of 1..4%, versus the 1.5% paid to holders of the HSBC Advance current account. Both rates drop by 0.1% on 29 July 2015. The Save Together Bonus of £10 a month for 12 months is only available to HSBC Advance current account holders.

Therefore the only advantage of opening a HSBC Bank Account would be access to the HSBC Regular Saver Account. I can earn more interest in a Nationwide Cash ISA.  As I can’t be bothered to go into a branch to open a current account, I won’t be opening an HSBC current account. If I’d been able to open the HSBC Bank Account online, I probably would have proceeded in orde to get the fixed rate of 4% on the Regular Saver.