HSBC and First Direct slash regular saver rates
HSBC and sister bank First Direct have cut the interest rate on their regular savers from 5% AER to 2.75% AER.
Each account pays customers a fixed rate on balances of up to £3,000 (£3,600 for First Direct customers) but only for one year. Yesterday, the rate was cut on both accounts from 5% AER to 2.75% AER for new customers.
To open a regular saver with HSBC or First Direct, you must first have a current account with the respective bank. You can then deposit between £25 and £250 a month with the HSBC Regular Saver, or between £25 and £300 with the First Direct Regular Saver Account. If you don't pay in the max each month, you can pay more in later months.
Once the 12 months is up, the balance and interest is given to you as a lump sum and the account is either closed or turned into an easy-access Flexible Saver Account (if you're with HSBC) or a Saver Account (for First Direct customers). No withdrawals are allowed before the year is up.
See our Savings guides for more information, including how to earn up to 5%.
I already have a regular saver – what does this mean for me?
HSBC and First Direct confirmed that existing customers, who previously opened a regular saver, will continue to receive the 5% AER rate until the end of their 12-month periods.
At the end of the 12-month period, you'll need to check which rates are the most competitive. See our Savings guides for more information.
I've got an M&S Monthly Saver – what will happen to my rate?
M&S Bank, which is also owned by the HSBC Group, offers a similar fixed-rate account called the M&S Monthly Saver.
With an interest rate of 5%, it's still currently our top pick. An M&S Bank spokesperson told MoneySavingExpert.com that it hasn't made any changes, so it will be keeping its rate at 5% for the moment, but was unable to say how long this will last for.
What does HSBC say?
An HSBC spokesperson said: "There are a number of different factors that influence the interest rates of savings accounts, and each provider will have their own reasons for the products they offer and the associated interest rates. Our savings accounts are competitive and cater for the different needs of savers."