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HSBC takes on digital challengers with top 3.25% ‘easy access’ savings account

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HSBC has increased the rate on its easy access savings account to a market-leading 3.25% AER.

The banking giant has upped the Online Bonus Saver rate from 3% to 3.25% AER (3.22% gross), frog-leaping digital challengers Chip, Zopa and Tandem Bank which previously held the top spot.

To get the HSBC deal, you need to hold its current account or another savings product. It can only be opened online, with a minimum £1 to get you started. However, it can be managed online, via app, telephone banking or in branch.

While there’s no maximum that can be saved, be mindful of the £85,000 Financial Services Compensation Scheme which protects your cash up to this limit if things were to go wrong.

Also, the headline rate stands at a variable 3.25% AER but the account actually pays a standard rate and a bonus rate which also depends on the amount you hold and whether you access your cash.

Its standard rate for all balances is 1.20% AER (1.19% gross). However, balances up to £10,000 will earn a higher 3.25% AER rate of interest which includes a bonus, while savings above £10,000 will earn 1.75% AER (1.74% gross) which includes a bonus.

The table below explains the interest rates:

This bonus is paid in any month where you don’t make a withdrawal. While this is an instant access savings account, it’s important to note that if you do make a withdrawal, you’ll see your interest rate plummet to the standard rate of 1.20% AER/1.19% gross for that month.

Therefore, to make the most of this account, keep savings of up to £10,000 and hold out on accessing your cash if you can.

If you may need access to your cash but don’t want to forego interest, then Zopa currently offers 3.21% AER (3.16% gross) on its Smart Saver account, according to Savings Champion data. It can be opened and managed online only with savings starting from £1.

What’s interesting about this account is that you can get a boosted rate of 3.25% AER (3.20% gross) if you can wait seven days to access your account, by giving it seven days’ notice.

Alternatively, if you can hold out by 31 days, the rate is further boosted to 3.31% AER (3.26% gross) and 3.47% (3.41% gross) for 95 days’ notice.

Elsewhere, the Tandem Instant Access Saver pays 3.20% AER (3.16% gross) once customers have accessed the 0.35% top up rate (add in the app). This account is fully accessible with no penalty for getting your hands on your cash, and there’s no requirement to give notice either. But, it can only be opened and operated via mobile.

Savers could also opt for the Chip Instant Access Account which pays 3.15% AER. It can be opened via app with £1.

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