HSBC New Money earns 6% - Page 5

Daniel Magix · #41 03-05-2007, 11:11 AM

Newb questions on HSBC in general...

This is simply an online savings account, right? If I withdraw all of my money at some point, am I credited with all interest earned up until the point of withdrawal? I mean, it's not like a CD with early withdrawal penalties, right?

My savings account at my local bank is at like 1% - so it's a no-brainer to move all of my savings account monies (and my CDs as they mature) over to HSBC, right?

So, I can link my current local banks checking account to HSBC? And when I do that, I can simply transfer money from my checking account and into my HSBC, as often as I wish?

Is there ANY more danger in an HSBC account, than there is in a traditional bank?

From everything I've read, it all seems safe and smart. My wife is the one who is hesitant about putting all of our savings into an online bank. So I guess I am just looking for more convincers for her, and more info to make her feel comfortable with this decision.

hlacheen · #42 03-05-2007, 01:54 PM

Well HSBC is one of the largest banking groups in the world, so I'm pretty sure you can trust them.

prohornblower · #43 03-05-2007, 02:41 PM

Daniel, I believe all interest accrues daily, but only releases to your account in 30-day increments.

I may be wrong, but I'm under the impression that if you pull your money all out on like the 29th day, that month's interest would default back to HSBC. No biggy, just make sure when you pull ALL your money out to close the account you do it just after it was released to your account.

Again, I may be mistaken on this.

Daniel Magix · #44 03-05-2007, 04:15 PM

[ QUOTE ]
Daniel, I believe all interest accrues daily, but only releases to your account in 30-day increments.

I may be wrong, but I'm under the impression that if you pull your money all out on like the 29th day, that month's interest would default back to HSBC. No biggy, just make sure when you pull ALL your money out to close the account you do it just after it was released to your account.

Again, I may be mistaken on this.

[/ QUOTE ]

Thanks, after reading everything I could find on their site, that's one of the questions I still had that did not seem addressed (or maybe it was addressed, but I just didn't understand it or just missed it). I had a feeling that it may be a monthly released kind of thing - can anyone confirm this?

squiffy · #45 03-05-2007, 09:27 PM

How much is 100% of your savings?

I am with your wife on the risk question. I would not put 100% of my savings in an online bank. In the unlikely event that you have a problem, like identify theft or a computer failure, it's nice to be able to walk into a brick and mortar bank and ask for assistance.

The worst case scenario would be that some computer glitch or some online fraud causes problems with your account. In that situation I would prefer to have B&M.

Having said that, putting half your money or 2/3 of your money there is probably fine.

I have about 500K. And put about 120K in HSBC. I just don't want to be in a position where I have access to zero cash if something goes wrong.

squiffy · #46 03-05-2007, 09:33 PM

Also, I think the HSBC account is a money market account, so I believe you are limited to 6 withdrawals per month. Though perhaps you can get around this by setting up a checking account. Then doing one withdrawal to that. From there you can do online bill pay. Or you can do one large withdrawal to your own online checking account. Then make smaller monthly payments to whereever you want from there.

If you are only taking advantage of the high interest rate, and won't need to make frequent withdrawals, then the 6 withdrawal limit isn't a problem.

prohornblower · #47 03-05-2007, 11:57 PM

[ QUOTE ]
And put about 120K in HSBC.

[/ QUOTE ]

Squiffy, how what kind of fee is there to insure the $20,000 above $100,000?

squiffy · #48 03-06-2007, 05:27 AM

As far as I know the FDIC only insures you up to 100K per account. So I think if you put more than 100K into any one account, and the bank fails, you could lose that extra amount.

So hopefully, in my case, HSBC won't go under over the next two months. And, if you want to be very safe, you should not put more than 100K into any bank account or money market.

But it seems kind of strange that just by creating multiple accounts, that the government would extend additional insurance. Not sure if there is any logic behind that. And not sure what the total amount you can insure might be at one institution.

Worth looking into.

Daniel Magix · #49 03-06-2007, 10:22 AM

[ QUOTE ]
How much is 100% of your savings?

I am with your wife on the risk question. I would not put 100% of my savings in an online bank. In the unlikely event that you have a problem, like identify theft or a computer failure, it's nice to be able to walk into a brick and mortar bank and ask for assistance.

The worst case scenario would be that some computer glitch or some online fraud causes problems with your account. In that situation I would prefer to have B&M.

Having said that, putting half your money or 2/3 of your money there is probably fine.

[/ QUOTE ]

Good points. I didn't mean to imply that every penny I have was going to be deposited. I meant all of my current local bank savings (not much - $1500 or so). It's earning a whopping 1% at my local bank, so I'm really losing money there. I also have a few thousand invested in several CDs right now, and I thought it would be a good idea to deposit them into my HSBC account, rather than roll them over and lock them up into 3, 6, or 9 month CDs (which would earn me less than the HSBC account anyway).

I know I'm small-time right now, but I own a home and have two little kids, so big money for investing is not available yet. But I did pay off a $4000 Home Equity loan, a $6000 credit card debt, the rest of my student loan, and our second car, all within the last year. So, I am anticipating having a little more money this year to invest and grow. Does my HSBC plan sound like a good starting point?

The4Aces · #50 03-06-2007, 12:41 PM

[ QUOTE ]
As far as I know the FDIC only insures you up to 100K per account. So I think if you put more than 100K into any one account, and the bank fails, you could lose that extra amount.

So hopefully, in my case, HSBC won't go under over the next two months. And, if you want to be very safe, you should not put more than 100K into any bank account or money market.

But it seems kind of strange that just by creating multiple accounts, that the government would extend additional insurance. Not sure if there is any logic behind that. And not sure what the total amount you can insure might be at one institution.

Worth looking into.

[/ QUOTE ]

Its because the insurance is not really insurance. If the bank fails the government will just create more money... not replace it with money already in existence. the 100,000 amount is just an arbitrary #.