Below you will find my 15 month summary for the review of HSBC’s online Direct Savings Account (from early 2007 to May 2008). I came across the Direct Savings Account like many of you, trying to find a high interest savings account with the best interest rate along with the most services with minimal fees.
I first noticed this Direct Savings Account in early 2007. I was currently using PC Financial’s no fees checking account with their 4% Interest Plus high interest savings account. I needed an all-in-one chequing / high rate savings account solution and HSBC’s Direct Savings account was definitely that and more.
I signed up March of 2007 with their $25 sign-up offer (under the condition that I have $100 in the account on June 27th, they would then deposit $25 by August 1st). Just as with most high rate savings accounts, to sign up, you need to complete the online savings account application followed by mailing them your first deposit cheque to link your existing checking account from another financial institution.
The sign-up process was seamless and the ATM Card along with the PIN was mailed within about 5 business days (to change the PIN, just visit an HSBC Branch). I then contacted customer service to get set up for telephone and online banking.
As stated above, I find the Direct Savings Account is your best all-in-one solution for banking. Absolutely free transaction banking with no monthly fees, no maintenance fees, no account fees, and no transfer fees. Free unlimited bill payments and pre-authorized debits along with free bank-to-bank transfers. My initial transfer was a bank to bank transfer from my checking account with PC Financial (CIBC) to the Direct Savings Account.
As you know with most all banks, although you will see the funds from the bank-to-bank transfer in your savings account the next day, they will hold the funds for about 5-10 business days while the funds clear your linked checking account.
ATM Deposits might be your way around this. Another great service from HSBC is that they are connected to THE EXCHANGE network so you will not have to drive far to look for a HSBC ATM. This will allow you to make free withdrawals and deposits from any Bank of Montreal ATM as well as any other ATMs connected to THE EXCHANGE network (National Bank of Canada, Alterna Savings, etc). Just visit www.the-exchange.ca to find the closest ATM. Your question here might be, do they hold funds you deposit at an ATM? I believe when my account was set up, they had a hold on any deposits exceeding $100. I called into customer service and asked if they would increase this $100 limit. I believe they had to do a credit check of some sort, but I was able to have it increased to $1000 with no hold. (They also increased my ATM cash withdrawal daily limit to $600 and my Interact purchases daily limit to $2000.)
So I was set. With the free unlimited ATM withdrawals and interact purchases, I decided to set up payroll deposits with my employer and also pre-authorized payments for my car payments and insurance. If you need to set up pre-authorized payments with any bill companies, you obviously will not be able to send the company a cheque (this is one of the things lacking with this account, but then again, most banks do not offer cheques on their savings, so I cannot complain), you will need to visit a HSBC branch and ask them for a Void Cheque Form.
I cannot complain too much about the interest on this account. When I signed up, it was at about 3.75%. The interest has fluctuated between 3-5% over the past 15 months. The recent promo (Feb 4th to May 2nd) was for new and existing customers giving a 4.75% rate on balances exceeding the balance you had on February 4th (otherwise you were only getting the normal rate of 3.30%). To get around this, I opened up a second Direct Savings Account when the promo began and kept most of my funds in that account while transferring funds I needed into my first Direct Savings Account. Unlike PC Financial, all transfers within HSBC accounts are instant with no delays.
Since opening up the two Direct Savings Accounts with HSBC, I’ve opened up two U.S. Savings accounts (a High Rate U.S. Savings account along with a Regular U.S. Savings account). The Regular U.S. Savings account is also a no fees account. (Although I cannot make purchases with this account, I am able to make free deposits / withdrawals with a branch service person as well as unlimited free transfers online. The High Rate U.S. Savings account only gives you the open for unlimited transfers through online banking, so you would have to build your U.S. Funds in this account and then transfer it online to your Regular U.S. Savings account and withdraw with a HSBC branch service person. I also opened up an RRSP Account earlier this year and contributed some funds to take advantage of their 4% promo rate without having to be locked in.
As for online options, you are able to request to have your statements mailed to you or to view them online or both. Here are a few settings you can change with your online profile.
Contacting customer service has always been great. I always get through to speaking to someone right away. Though one problem I find is if you make any special requests like the one I mentioned earlier about increasing your hold limit on deposits at ATMs, you will need to speak to your banking advisor, which is someone in Vancouver who takes care of Direct Savings Accounts. If this person is not available, you will have to leave a message and wait for him / her to contact you back.
The one negative encounter I did have with HSBC is when I lost my ATM Card on a Thursday evening. I went to an HSBC Branch Friday morning to get another one. They were able to provide one to me, but I was not able to use it for ATM / debit purchases for 2 business days. This meant having to wait until Tuesday to have access to my funds (although online banking was available). That Friday morning I had to transfer money from the Direct Savings Account to the U.S. account, then see the branch service person to withdraw the U.S. funds (while transferring it back to Canadian currency), so I could have some money for the weekend as my debit card was not usable. I had lost some money on the double conversion there. Keep in mind here, that HSBC Bank personnel do not have access to the Direct Savings Account — you will need to do all your transactions where this account is concerned all by telephone or online.
To wrap up this review, I would have to say my experience with HSBC as a whole has been very positive. From their free unlimited transactions, to their free unlimited ATM / debit access to their high interest rates, you really cannot ask for more. Customer service people are in Canada and always available (no hold times as of yet). Though I have read some people’s complaints about the online access, I myself am pretty happy with it. If you have the same banking needs as I do, I’m sure you will enjoy HSBC’s online Direct Savings Account. In my opinion, no other bank can compare.
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