HSBC interest rates are truy terrible | HSBC | Discussion forum

Agreed, HSBC's interest rates are absolutely abysmal. In the last three to four years, they've sold off, divested, substantially wound down or otherwise grandfathered many businesses. It all started in late 2010 with the management-led buyout of HSBC Capital's private equity and mezzanine debt financing business that is now known as Fulcrum Capital Partners (HSBC Capital is essentially an empty "shell company" formed to attract investment for its Immigrant Investor Program that has been on hold by the Government of Canada for the past couple of years - where you're really wealthy, commit to moving millions of dollars to Canada and live in Canada for at least 3-5 years, you can essentially buy your Canadian citizenship! With no end to the program's moratorium, I fully expect HSBC may decide to give up on the program and dissolve this subsidiary), sale of the full-service investment advisory and brokerage business of HSBC Securities to National Bank Financial Wealth Management (HSBC Securities exists as the legal entity for HSBC InvestDirect, which itself outsources its back-office administration to National Bank Correspondent Network, and for HSBC's Global Banking & Markets business in Canada), closure of all 75+ offices of HSBC Finance in Canada, the wind-down and dissolution of the HSBC Finance businesses in Canada including the complete sale of the private-label credit business to TD Financing Services, ending of Estate and Trust Administration business in Canada (HSBC Trust Company exists only as a deposit taker and to manage the registered plans of HSBC investment accounts now), sale of the creditor insurance manufacturing business Household International Life Insurance to an affiliate of Enstar Group and, finally, dissolution of HSBC Insurance Agency Canada & HSBC Bank USA Canada Branch this year.

I fully expect HSBC to close its unprofitable poor-performing branch locations as we get closer to their lease expiry (many opened in the late 2000s so I expect it to happen gradually between 2015-2019 as their initial ten-year lease term ends). It's the main reason I chose to leave HSBC late last year as the branch I worked at (West Kelowna) was one of those branches that opened in early 2009 and never achieved profitability. You'll be able to tell fairly easily if your branch will likely be closed as these newer branches were hardest hit in the 2012 layoffs as part of 'Project Nemo,' the unofficial HR codename for the People & Structure "right-sizing" portion of the Organizational Effectiveness regime, and generally have less than 5 staff members working in them (some as few as 3). Using publicly-available data, I estimate there to be anywhere from 12-15 of these branches. As well, HSBC would likely decide to consolidate some of its so-called "non-core" branches in less growing, less urban areas into less number of branches while still maintaining a 'presence' in those markets. That could be anywhere from 25-50 branches. When the 'dust settles', I could see a much slimmed-down HSBC focused in the urban markets, where they have scale, with a few targeted smaller markets and have anywhere from 75-100 branches (instead of 140) currently, to help with their profitability.

In short, it's not a pretty picture.

Like you, I maintain an account there for my Safe Deposit Box rent annually in January. That said, I could easily move that to another bank, such as Scotiabank, where I maintain a Money Master Savings Account and Safe Deposit Box rent is a non-chargeable (free) transaction and will likely do so (to cut down the number of accounts to manage by quite a bit).

As for the account type, you likely have the Regular Savings Account, which is grandfathered. They wouldn't have likely changed you to this account type as they simply cannot once it is grandfathered. You can easily check to see by removing any account nickname via Personal Internet Banking, hitting "confirm" (might need to confirm twice) and then checking the "account name" on the overview screen. As well, if on your statements, it shows as an "SSV" or "PSV" product type ("SSV" means you get a statement; "PSV" means it is a passbook account and the two cannot be changed), then you have the Regular Savings Account. Similarly, if it ends in either "206-209", it's a statement Regular Savings Account; if it ends in 210-215, it's a passbook-only Regular Savings Account. If you do open a High Rate Savings, you'll likely get a new account number ending in "203-205" and have to go into a branch to request the Safe Deposit Box billing account number be adjusted.

As for needing a Coast Capital Savings account for your insurance, is that just because that's where the pre-authorized payment comes from? I don't think there'd be any other reason considering Coast Capital Insurance Services is now a subsidiary of Western Financial Group, itself wholly-owned by Desjardins Group. (I believe the aim is that within the next five years, they'll rebrand as Western Financial Group and, perhaps, relocate to neighbouring premises to a Coast Capital branch unless, of course, they're already in separately sectioned-off/enclosed premises with their own main entrance in which case signage and furnishings would only need be changed.)

Hope that helps,
Doug

rhvic, indeed it sounds like you most definitely have the Regular Savings Account (likely ending in "206" or "210", depending on if it's a statement or passbook). This is a grandfathered account. Even their now-grandfathered Advance Savings Account is paying 0.50% (a far cry from their heyday six years ago when they were among the leaders on highinterestsavings.ca).

I suspect HSBC will lower the interest rate eventually on all grandfathered savings accounts to 0%, to gain some additional net interest margin on all of their dormant savings account balances and balances from elderly clients too lazy or interested in opening up the High Rate Savings. It'll also force those actively managing their savings to either switch to the High Rate Savings (which is their goal anyway). The danger in that strategy is two-fold: (a) it's not a long-term strategy as elderly clients die off and often the heirs transfer the money out of a financial institution and (b) those actively managing their savings with HSBC may decide, they don't like the way they're treated and "pull the pin" and leave HSBC completely, except for maybe a secured borrowing facility (i.e., a mortgage) that would have a penalty to payout prior to maturity.

Ultimately, I suspect HSBC eventually closes and sells off its retail branch network (except for maybe a "core" network of mostly urban and major metropolitan 30-50 branches) and sells off its personal banking/Advance (i.e., non-Premier-qualified) and what's left of their small business banking clients to a domestic competitor.

Cheers,
Doug