Banks with a Clawback Clause (Similar to HSBC Canada) | General financial discussion | Discussion forum

Yes, RBC Royal Bank does in its Get the new iPad when you switch to RBC offer.

Open an eligible RBC bank account ($16.95/month RBC Signature No Limit Banking account or $30/month RBC VIP Banking account) by July 31, 2023. Set up two of the following by January 9, 2024:

1. Your payroll or pension as a direct deposit
2. Two pre-authorized monthly payments (PAPs)
3. Two bill payments to a service provider

$599.99+taxes clawback for the iPad if account closed or those direct deposits or payments stopped before November 2024, next year:

3.h. If you received the Reward and then downgraded, changed or closed your Eligible Personal Banking Account or undid any of the Qualifying Criteria you performed to receive the Reward (for example, cancelled a payroll/pension deposit or pre-authorized payment) at any time prior to October 31, 2024, we reserve the right to debit your Eligible Personal Banking Account or any of your accounts with us for the value of the Reward [$599.99] you selected, as described in the table below, plus applicable taxes, even if this places your account into overdraft or causes you to exceed your account’s credit limit, as relevant. If your Eligible Personal Banking Account is closed and you do not have any other account with us at that time, we will send you an invoice for the value of the Reward you selected, as described in the table below plus applicable taxes, which you agree to pay within 30 days from the date of receipt, which shall be deemed to be 5 business days from its postmark date.

HermanH said

I won't put up with their childish BS. I closed my accounts ASAP. They tried to get me to keep things open, but I told them about their idiotic and childish tricks and wanted them to know how much I despised them. I refused to even keep an empty account with them.  

Have to say… Requirements to stick with new accounts after getting the bonus seem completely reasonable and it is the reaction that is childish. Banks are not charities.

All new account promo will have similar type of clawback / restriction.

I did the HSBC promo couple of years ago. I did exactly as the OP suggested, which is just park the min. $5k into a GIC (just pick a term long enuf to cover the 1y horizon.) This way you dont have to worry about early withdrawal triggering clawback etc. After that I switched the account into one of the no fee ones (was going to close it completely but the rep on the phone tried to keep me and offered me a no fee alternative)

Loonie said
They are entitled to put these conditions on their offers, but when they make it difficult to understand what you're getting into, hide it in lengthy fine print etc., that's not playing fair.

Certainly. I thought that I had read the terms, but missed/misinterpreted one and got caught. I also did not think that their rates would drop from something like 2.5% to 0.2%

I broke even and won't fall victim to such gimmicks in the future.

savemoresaveoften said
All new account promo will have similar type of clawback / restriction.

I do wonder to what lengths a bank will go to recover the promotion. If all the money is withdrawn and the account closed, what recourse do they have, except to file a civil suit? Will they simply trash your credit rating and leave it at that? Anyone have experience with any promotion recovery efforts?

Agree with mordko too, anybody wants to give me $400 for opening an account, I'm going to read every word of fine print carefully. Actually I generally wouldn't even pay attention as I don't believe there are free lunches of that magnitude.

dickyran333 said
I opened an HSBC Advance Checking account and HRSA in Nov 2022 to avail their Welcome Bonus of $400 and to get promotional interest rate of 4.90% for 4 months. I fulfilled their requirements of pre-authorized debits and bill payments and I was told that they would pay $400 bonus in June.

However, I recently read about their clawback clause that states that if the Advance Chequing Account doesn't remain open in good standing for at least one (1) year after the end of the month during which the Advance Welcome Offer is received, then I'll be obligated to repay the full amount of the Advance Welcome Offer to HSBC.

I was not aware of this clawback clause, otherwise I wouldn't have opened the HSBC accounts. If it was mentioned here on the forum, I failed to check it out.

After their promotional interest rate period expired, I had moved my balance to Tangerine Bank leaving only $5,000 at HSBC to avoid their monthly service fees. Also, HSBC's current HRSA interest rate is mere 1.15% and I don't remember getting any other promotional interest rate offer from them for the existing customers.

I have no desire to keep this account open until June 2024 with $5000 lying there. I guess I have 2 options:
a) Open a CAD $5,000 1-year GIC at 3.50%, or a USD 5000 1-year GIC at 4.00%. I then don't have to keep $5,000 in their Advance Chequing Account to avoid monthly service fee of $25.
b) Just accept it was a mistake to open the HSBC accounts and close them immediately and move on, even if that means let go $400 Welcome Bonus next month.

Any suggestions?

More importantly, I'd like to know if there are other banks that also have a clawback clause on their new account opening offers.  

If you don't mind going through the process to open an HSBC InvestDirect account, you could stash whatever the minimum is to avoid annual administration fees ($15-25,000) in an ISA paying between 3.8-4.25% (series A). Alternatively, you could open an HSBC Mutual Funds account and park your $5,000 in an HSBC Money Market Fund or HSBC Mortgage Fund, both of which likely offer premium distribution current yields at the moment. Note their registered mutual fund accounts include a $15.00 per year annual trustee fee. 🙂

With the HSBC InvestDirect or HSBC Mutual Funds route, you may be able to qualify for a transfer fee rebate when you transfer out to your other brokerage firm. Alternatively, 3.50% is not a bad yield on $5,000, which works out to be $175.00 per year versus $217.50 in a Scotiabank Series A ISA paying 4.35%, meaning a difference of a mere $42.50. $42.50 to make $400.00, tax-free, seems reasonable. Also, that assumes Scotiabank's ISA rate doesn't go down at all in the next twelve months. 🙂

Footnote: RBC Royal Bank is likely to close its purchase of HSBC Canada in the next year or so anyway, though it may also be twelve months from today. When they do, it's quite possible they simply transfer the deposits and mortgages to the new entities, and don't worry about any historically paid transfer bonuses and so you may not have to worry about that clawback potential. That said, the acquisition is unlikely to close much before next March anyway.

Cheers,
Doug

dickyran333 said
Thanks Doug, I appreciate your suggestions. But I see that you have responded to my original post. Did you miss my previous post (#11)?

In the original post, I had mentioned HSBC's 1-year GIC at 3.50%. it was based on the rates they provide on their Today's Rates page. But I later realized that they also have 1-year GIC at 4.75% until May 31st, which seems to be a far better option than some of those you mentioned. But I still decided to close my HSBC account and let go $400.  

Oh, wow, how come? 4.75% does indeed seem like a far better option. I'm surprised you gave back the $400. I agree they have generally crappy products, but honestly, I would've just stuck with $5,000.01 in a 4.75% GIC in that case.