Bank with M&S, HSBC or First Direct? Urgently open its regular saver
M&S Bank is soon to close its 2.75% AER regular savings account to new customers – and it's possible its sister banks HSBC and First Direct could follow suit. Yet if you have a current account with one of these banks already, there's still time to open a regular saver and lock in the 2.75% rate for a year.
Update Fri 13 Nov: The deadline to open an M&S Bank regular saver has now passed, but HSBC and First Direct are still accepting applications. Read on for full info.
The Monthly Saver account from M&S Bank will close to new customers at 11.59pm on Thursday 12 November – so if you want to bag the 2.75% interest, you've not long left to apply. There's no immediate change for those who already have the account – you'll continue to get 2.75% until the end of your 12-month period.
HSBC and First Direct offer similar fixed-rate regular savings accounts, which pay 2.75% and are among our top picks. HSBC and First Direct told us this week they have "no plans" to close their regular savers. But as the banks have often moved together in the past, we wouldn't count on these accounts sticking around for much longer.
Here's the view of MSE founder Martin Lewis...
'This is a virtually unbeatable rate – get your skates on'
If you've got an M&S bank account and you have savings, then open its account now. This is a virtually unbeatable rate of interest on the open market currently. As long as you can put £25 a month in, it's worth it. And if you open it now then the account lasts the whole year.
While the parent company has said that M&S's sister brands HSBC and First Direct will not be closing their regular savers, in my head I hear a 'now' after that. In the past when one has moved rates, a few weeks later the others have followed. So for safety's sake, if you're a saver with those banks and haven't opened their regular saver, I'd get your skates on.
How to get 2.75% if you're with M&S Bank, HSBC or First Direct
If you've a current account with one of these banks and want to open a regular saver while they're still around, here's what to do:
- To open a regular saver with M&S Bank, you must apply by 11.59pm on Thursday 12 November. To be eligible for its Monthly Saver account, you'll need to have used the Current Account Switch Service to switch to one of its current accounts and have two or more direct debits. You can then deposit between £25 and £250 a month. If you don't pay in the max each month, you can pay more in later months.
Once the 12 months are up, the account is closed and the balance and interest given to you as a lump sum (or transferred into the M&S Everyday savings account if you have one). No withdrawals are allowed before the year is up.
- With HSBC or First Direct, there's no set deadline to open a regular saver – but go fast to be safe. You must have a current account with the bank – though unlike with M&S Bank, you don't need to have switched to it using the Current Account Switch Service. With HSBC's regular savings account, you can deposit between £25 and £250 a month – with First Direct's regular saver, it's between £25 and £300 a month.
Both banks also let you carry your allowance over, so if you don't pay in the max each month, you can pay more in later months. As with M&S Bank, no withdrawals are allowed during the term. After 12 months, your money will be transferred into an easy-access account with the relevant bank.
I'm not with these banks – can I switch to get 2.75%?
If you DON'T have a current account with one of these banks currently, it IS still possible to get an HSBC or First Direct current account and then open their regular savers – but not with M&S Bank.
M&S Bank previously told us you don't need to have completed a switch to it to get its regular saver – suggesting you could beat the deadline by opening an account, starting a switch and opening the Monthly Saver at the same time. However, it now says that "due to the length of time it takes to open a new current account", it's no longer possible to get an account on time.
In any event, it's likely there are better options than M&S Bank for those who currently bank elsewhere – for example, you could switch to NatWest or RBS, which offer free switching cash and ongoing cashback and currently offer 3.04% AER variable via their regular savers. For full details of all these, see our Best Bank Accounts and Regular Savings Accounts guides.
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