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HSBC and First Direct are used by millions of savers right across the country, who put their money away each year. Many Britons are looking to make their money grow, and so the most favourable interest rates are always being hunted for. Particularly amid the ongoing financial crisis, a solid interest rate can provide reassurance to savers their money is being looked after.
The announcement of a lowered rate from HSBC and First Direct, then, is likely to disappoint savers putting away money here.
The banks have decided to slash the rate of the Regular Saver from 2.75 to one percent, in a move which has implications for many savers.
However, existing Regular Saver customers will be unaffected by the move as their 2.75 percent rate is fortunately locked in for the duration of their account.
This means the interest rate will only reduce when the account matures at the end of the 12 month period.
First Direct, which is a part of HSBC, has mirrored the decision and cut rates on its Regular Saver offering from 2.75 percent to one percent.
This will apply to deposits which are between £25 and £300 a month, with a maximum saving of £3,600.
HSBC has now updated its website to reflect the new 1.00 percent offering.
It has said that due to very high demand, it is now taking longer than usual to open new Regular Saver accounts.
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For those who have already applied for the account, they should wait to hear from HSBC in due course.
The HSBC Regular Saver, the bank explains, is suitable for those who are hoping to make their money grow.
Britons can start saving from £25 a month, and can deposit between £25 and £250 into their account each month.
The account therefore allows Britons to save up to a total of £3,000 throughout the term.
To benefit from the rate offered on this account, savers will not be able to make partial withdrawals at any time during the 12 month period.
For this reason then, the Regular Saver is more suited to those who have spare money to put aside for this short length of time.
To be eligible, a person must hold an active HSBC current account – excluding a Basic Bank Account.
Only one Regular Saver account per customer is permitted by the bank.
An HSBC spokesperson commented on the decision which has been made.
They said: “The impact of being in a low interest rate environment is well known.
“But 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.
“Those customers who signed up to a Regular Saver at 2.75 percent will continue to receive that rate.
“Those who open an account now will still receive a competitive rate on their regular savings.”
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