HSBC has boosted rates on two of its savings accounts (Image: Getty)
HSBC has increased the interest rates on two of its Fixed Rate Saver accounts, giving customers the chance to earn up to 4.4% on money they can afford to lock away.
The banking giant has raised the rate on its one-year Fixed Rate Saver from 3.7% to 3.8% AER. Meanwhile, the rate on its two-year account has increased from 4%to 4.4% AER. The move will be welcomed by savers looking for a guaranteed return on their cash, particularly those who do not need immediate access to their money.
Savers can now earn up to 4.4% AER over two years (Image: Getty)
The Fixed Rate Saver allows eligible HSBC customers to make a one-off deposit between £2,000 and £1million.
Once the money has been deposited, the interest rate is fixed for the full one or two-year term, meaning customers know in advance what rate they will receive.
Savers can choose to have their interest paid monthly or annually, with the payments going directly into the HSBC account used to make the initial deposit.
The two-year rate of 4.4% means someone putting £10,000 into the account would earn around £896 in interest over two years, assuming the rate remains fixed and the interest is paid annually without compounding.
For someone depositing £20,000, the equivalent simple interest would be around £1,792 over two years.
The account is aimed at customers who have money they do not need to access immediately. However, savers can close the account early if necessary, although HSBC says an early withdrawal fee may apply.
The latest rate increase comes as households continue to weigh up where to keep their savings and whether it is worth fixing their money for a set period.
Lloyd Robson, head of savings at HSBC UK, said: “Everyone’s savings needs are different, which is why we offer a range of savings accounts designed to suit various circumstances.
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“Whether you’re building up a savings pot for a future goal or simply have money you don’t need immediate access to, it’s important to make sure your savings are working as hard as they can.”
He added: “With our Fixed Rate Saver, customers can lock in a guaranteed rate for one or two years, giving them certainty over the return they’ll receive while their money is set aside. We’re pleased to be increasing our rates, giving savers even more opportunity to make the most of their money.”
Key account details
The one-year account now pays 3.8% AER, while the two-year option pays 4.4% AER.
The minimum amount that can be deposited is £2,000, while the maximum is £1 million.
Interest can be paid either monthly or annually, depending on the customer’s preference.
However, savers should consider their circumstances carefully before fixing their cash.
A fixed-rate account can provide certainty about the return, but the money may not be as easily accessible as in an easy-access savings account.
Anyone considering moving their money should also check the terms and conditions, including any penalties for withdrawing funds or closing the account before the end of the fixed term.