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Last week, the bank increased the rate of its Regular Saver account from one percent to five percent. Other increases announced included a shift from 1.25 percent to 3.5 percent on its one-year Fixed Rate Saver.
The bank confirmed it will be hiking interest rates for the sixth time this year, with the rise coming after a series of increases to the Bank of England Base Rate.
Although the rate on the Regular Saver is fixed for 12 months, the rise will apply automatically to existing accounts.
The Regular Saver allows people to save up to £3,000 over the course of a year and receive their interest in a lump sum once the 12 months is up.
Britons can start saving from just £25.
The bank suggested people set up a standing order from their HSBC account to pay between £25 and £250 into their Regular Saver each month.
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If individuals regular payments are less than £250 a month, they can carry their allowance over, paying more in later months (up to a total of £3,000).
For example, if someone had deposited £3,000 earning five percent, their total balance after 12 months would be £3,081.25
The minimum deposit in month one is £25 and the maximum balance is £3,000 at the end of the 12 month term.
Regular deposits must be made by standing order each month. The minimum monthly deposit is £25 per month and the maximum monthly deposit is £250 per month.
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Savers who have an ISA account with the bank will also get an interest rate increase of 0.90 percent, which will be applied to all ISA products.
Tom Wolfenden, the bank’s head of retail in the UK, outlined why HSBC is opting to hike rates for the sixth time this year.
Mr Wolfenden explained: “Having a savings habit is something that we would encourage as it can be invaluable if there is an emergency and you need to replace your washing machine or have some unexpected expenditure on your car.
“While the cost of living may be increasing, emergencies will still happen, so having a small safety net that will help cover you in the event of something expected happening can be extremely important.
“To help encourage a savings habit and to help customers make their money grow, we are increasing the interest rate on our Regular Saver, to 5.00 percent.
“The rate is fixed for the year from the time of opening, however at this time to help with the increased cost of living and to support those who currently have a Regular Saver open, we are increasing all current Regular Saver accounts to the new rate of five percent with effect from December.
“Customers do not need to do anything, it will be updated automatically.”
He explained to further help customers, HSBC will be waiving the fees on early access to a fixed term savings account, as it could help with unexpected expenses.
Mr Wolfenden also encouraged individuals to sign up to a session with a financial wellbeing consultant, regardless of whether they are a customer or not.
This could be a good way to get a helpful outside perspective on ways to manage money. It is seen as a good first step to take one’s financial fitness test and get their score. People will then be signposted to what support is available.
