HSBC Direct Cuts Rates To 4.5%

We checked HSBC Direct’s front page daily after the Fed interest rate cut, in fear that our fave online saving account would also cut its high 5.05% interest rate. We chuckled as complaints rolled in about people’s various money market accounts getting their rates trimmed. After we were lulled into a false sense of security and stopped checking, a reader pointed out that HSBC has slashing the rate to 4.5%. Noooooooooooo…

No matter, we’re thinking of porting all our cash to Emigrant Direct’s “American Dream Saving Account,” boasting a rate of 5.05%. Will it hold? There’s another main contender in this field of fee-less, no minimum deposit required accounts, ING Direct, but we’re not fond of the color orange enough to stoop to 4.3%.

(Photo: DCvision2006)


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  1. beavis88 says:

    I’m not fond enough of HSBC to move my money there even if they bump the rate to 6.05%. Worst. Company. Evar. Though maybe I’m just bitter because they bought my mortgage and can’t be bothered to, you know, pay the shit they’re supposed to pay with my money from the escrow account :(

  2. WaMu online only is still at 5% apy. They also have a stricter plan that has an automatic withdrawal from your checking.. and you can’t touch the money without a fee.. I think the interest rate on that one is in the 7 – 10% range.

  3. Anonymous says:


    5.21% APY (down from 5.31 a couple weeks ago)

    I’m a happy customer.

  4. Mark says:

    What about First National Bank of Omaha?
    They’re advertising a 6.05% rate right now… thinking of moving my money over there.


    anyone have experience with these guys?

  5. krunk4ever says:

    I’ll probably be sticking with HSBC for awhile, until this rate drop thing is over. I’m expecting most banks to finalize their rates within a few weeks and then decide which bank is the best to put the money into.

    Also, if you want to sign up for ING, they have the $50 sign up bonus back. If you’re interested, you can find the “special” link on most deal forums or my blog.

  6. Edmund_Burke says:

    Recently sent some $CRILLA over to Emigrant Direct, opening a saving with them. Feels good.

  7. Odwalla says:

    E*Trade Bank is still at 5.05% for savings (no minimum) and 4.00% for checking accounts with a balance over $5000.00

  8. Dead Wrestlers Society says:

    Does anybody have any experience regarding lending money to individuals via website? Seems like they are sprouting up everywhere with some pretty high interest rates, but obviously, the risk factor is much higher.

  9. llryuujinll says:

    Etrade so far is still at 5.05%

  10. SpecialEd says:

    AmboyDirect is still @ 5.05% APY with no minimum. I’ve been watching for a change there also.

  11. torqueU says:

    @Mark: sent me an email saying after Sept 29 their rate would go to 5.05%. I haven’t seen anything higher yet.

  12. MonkeyMonk says:

    Strangely, my local brick-and-mortar bank (Mid-America in IL) is still offering 4.9% on my money market account with them. I was sure they would have trimmed this right after the rate cut.

  13. cyclade says:

    Got the HSBC email around 8:45 last night. By 8:50, I had withdrawn nearly all of my holding. Going to move it all over to my EmigrantDirect account. No joke. Of course with HSBC’s absurdly slow transfer process, It’ll probably be next Tuesday before my money is back in my checking account and ready to move again. (WTF is up with that? Another reason to bolt, I guess!)

    I had signed up for HSBC Direct when they had that 3 month, 6% teaser rate back in January. Now, I’m “voting with my feet” as the Econ profs like to say — everyone else who joined back then should do the same! Funny thing is, I remember doing a “survey” for HSBC shortly after signing up. I remember there being loads of questions that asked essentially, “do you prefer the highest rates or more services?” In every instance, my answer was “highest rates!” I could frankly care less about additional services from an online bank, other than perhaps, oh, instant bank-to-bank transfers!

    And to pile on my gripes with the crappy HSBC experience, the goofy mouse-click-fake-keyboard “security” feature sucked! Especially having to click/type a 10 (or was it 12+) character secondary password!

  14. bohemian says:

    Anyone have a primer on these online savings accounts? Do they require you have other accounts with them? How do you do bank to bank transfers with them? Our brick and mortar bank only has wire transfer at a high fee, online banking that mails a check or make a debit card “purchase” elsewhere to move the money. How do you take money out of these savings accounts if you need it?

    We dumped out savings account at our regular bank when they started fee sucking it to death.

  15. yg17 says:

    Shit….I just opened an HSBC account 3 weeks ago. I guess I’ll be moving somewhere else soon

  16. babaki says:

    i got this email this morning. this sucks. i really dont want to go through all the hassel for the extra .5%. if it drops further i might switch though. e-trade still offers 5.05% as well. i have never heard of emigrant bank

  17. JustAGuy2 says:

    @public enemy #1:

    I assume you’re talking about sites like prosper. A few things to be aware of:

    1. Loan terms are usually well over a year, so you have little liquidity.

    2. The limited analysis I’ve seen indicates that, on a risk-adjusted basis, the returns are pretty weak – for most of those borrowers, they’re offering high interest rates for a good reason.

    3. Think of it this way: if large credit card companies which can spread their risk widely and have both sophisticated risk management models and large collections operations are unwilling to loan to someone at 20%, would it really be a good idea for you to do so? Certainly, there are some diamonds in the rough (people whose chance of repayment is better than the models indicate), but are you really likely to find them?

  18. letoofdune says:

    Much like Kramer on the immortal Seinfeld, “I’m out.”

    Now it’s time to look for a better place to stash my cash. I loved ya, HSBC, and ya did well for me, but 4.5% is just not gonna cut it now adays.

    Time to do some research.

  19. Dang, I guess I should have listened to you, Consumerist, when you told us to Stash Our Cash In CDs before the rate cut! Please forgive me!

    I feel it takes far more effort than its worth to move my money around over a half-percent of interest, especially when you know the other banks are likely to follow suit and lower their rates too. The 4.5% from HSBC still rocks the casbah compared to the abysmal 0.1% my brick-and-mortor bank’s savings gives me.

    Plus, their headquarters is in Prospect Heights, IL, so its like supporting “local” business!

  20. kingoman says:

    @yg17: Check your agreement, if you just signed up you probably agreed to stay for 6 months to a year or pay an early termination penalty. Many of these online banks have something like that now.
    Of course, you can just keep a minimum amount there and leave the account open.

  21. synergy says:

    Thanks for posting this. I was annoyed when I got my email yesterday telling me about the interest cut. I might switch over to your recommendation.

  22. protest says:

    Yeah, I checked my account yesterday to see that my credit union money market account dropped another .2% to 4.3%. That’s a drop of .7% in the last 6 months! The only reason I’m keeping it is the low $500 minimum and easy internet access. If it drops below 4% though, mama is going shopping.

  23. BobCoyote says:

    Can we expect Emigrant Direct and the other companies who haven’t changed their rates to hold firm? Unless they’ve publicly stated they will, or there’s some concept I’m missing, I’d expect their rates to drop in the near future as well.

    Even with the rate drop, I’m still elated to be getting better than the 0.2% that BoA was offering for Savings.

  24. synergy says:

    @Mark: First National Bank of Omaha Direct only has a limited promotional APY which will change after Friday, (9/28/07), but they’re not saying to how much they’ll change. They say that back before 05/01/07 it was at 5.25%, but that doesn’t mean squat because they might not return it to that.

    From the FAQ ([] ):

    Is this an introductory rate?
    No, this rate is applied to all balances held in your account from 5/01/2007 through 9/28/2007.

    What will your rate be after 9/28/2007?
    Our rate is typically determined based on market condition such as, but not bound by, the Federal Funds rate. We strive to always maintain a very competitive rate, and plan to do so when our promotion ends in September 28, 2007. Our rate prior to 5/01/2007 was 5.25% APY.

  25. Dead Wrestlers Society says:

    @JustAGuy2: Yes, that’s what I was referring to. Thanks for your input.

    BTW, I have the MMA with GMAC bank. It recently dropped from 5.15% to 4.9%. Not sure if I am going to switch out or not.

  26. anatak says:

    “We checked HSBC Direct’s front page daily after the Fed interest rate cut, in fear that our fave online saving account would also cut its high 5.05% interest rate.”

    Your ‘fave’? Really? And it earned that distinction by….. interest rate. Right?

    Lets keep this in perspective, people. Its a Money Market Account. This is not an investment. There is no need to get pissy because the interest rate is tied to the Fed’s an thus raises and lowers accordingly. Did you not know that going in? Yeah, some of these MMAs may hold out hoping to gain customers and get a bump from the Fed soon. FYI – 4% returns will just keep pace with taxes and inflation. So you’re splitting hairs over getting 1% or 0.5% net gains on a savings account. If you want an investment, go get one. This is not it.

  27. skittlbrau says:

    Folks, unless you have some heavy ca$h in your online savings accounts, think about your hassles before you go chasing rates. The differences in rates is generally a spread of 50 bps or less.

    What does a difference in 50bps mean to the average consumer on an annualized basis?

    on $100 – $.50
    on $1000 – $5
    on $10,000 – $50

    Think about it when you’re moving your money around. Unless you have some serious ca$h in those accounts, your lost interest when transferring from institution to institution likely outweighs the potential upside.

    But that’s just my $.02

  28. Eukaryote says:

    I thought it was this site, but now I can’t find it… I saw a post about a hidden money market account in the MyExpressions section that paid 5.5% for anything over $2,500. I opened one immediately, and then they lowered the rate to 4.5% sometime within the next week.


  29. Dennis says:

    Anyone else notice the “4.55% APY. My Way Certificate of Deposit.” on the sign-up page for the American Dream savings account?

    It wouldn’t really make sense unless you thought the rates were going to drop below that rather soon and stay that way for at least the length of the CD. Could this indicate that an Emigrant rate cut might be imminent?

  30. Lavanaut says:

    I have several accounts at 5.3% APY (which translates to 5.16% APR, I’m always curious if people posting here are aware of the difference). You can open an account online, and the minimum is a whopping $1. You can have multiple accounts as well, which works well for me. I’ve had my accounts for five months or so and am a happy customer.

    @JUSTAGUY2: I lend on Prosper. So far so good. 22% average rate of return (no defaults yet, keeping my fingers crossed ;)

  31. AddisonMavenue says:

    only concern i have with moving from HSBCDirect over .5% is if the bank i move to drops their rates correspondingly as well.

    Will survey the numerous options people have posted here though

  32. Dennis says:


    How long have your prosper loans been open? I have a co-worker who has been lending on prosper for a little over a year and he’s at about 50% default or more.

  33. weave says:

    My Commerce Bank checking account has been 0.15% — now I’m worried it might drop. I earned like three bucks from interest last year. ;-)

  34. S-the-K says:

    E-Loan’s savings account went from 5.30% APY (if memory serves me correctly) to 5.00% APY.

    I have no doubt that Emigrant Direct will lower their rate to 5.00% like HSBC. I thought that they would have done it by now. Maybe they are waiting to see what other banks do? Maybe they are waiting to see how many increased and new deposits they receive? Maybe their web graphics person is out sick and they can’t change the rate until a new graphic is produced.

    I’ll be keeping my money at E-Loan and HSBC and Emigrant. Fifty basis points is not enough to go through all the trouble of opening a new account somewhere or moving my money hither, dither, and yon. I pulled money out of ING Direct when their rates fell WAY behind their competitors.

    I will, however, not put any new money in HSBC. E-Loan savings is too user-unfriendly for me to deal with too frequently. Emigrant is the home of new money.

  35. phripley says:

    My CapitalOne Direct rate for Costco members is still 5.07%.

    Costco members also get a no-fee, Costco-credit Amex card that is a great deal too.

  36. skittlbrau says:

    @Dennis: I’ve been lending on Prosper for a year with no defaults. But my rate of return is 13%, so I’m not taking huge risks.

    Every once in awhile my fiancee asks me how my loan sharking is going :)

  37. IRSistherootofallevil says:

    E*TRADE still hasn’t cut its rate yet….still at 5.05%. Yay.

  38. IRSistherootofallevil says:

    Oh, and I forgot, E*TRADE checking gives you free checkbooks FOREVER, a debit card and I think 4 brick and mortar locations in NYC. And pretty quick transfers. I only use my Chase account as a portal for my E*TRADE accounts since I don’t want to risk sending cash through the mail. .

  39. IRSistherootofallevil says:

    Plus I get a $25 signup bonus so that should boost my returns…oh, I don’t know…about 3%.

  40. Xerloq says:

    @phripley: My Capital one for Costco is 5.20%. Go figure.

  41. LVPike says:

    I also have a HSBC account, and looked at the site once the fed cut the rates. It stayed at 5.05% until their next monthly cut-off date on the 26th of September, at which time it went to 4.5% (which is still .05% more than the rate cut, but thats another story.) I believe that most of these online banks will also start lowering their returns as their cycles come up.

  42. Anonymous says:

    Emigrant’s now 4.75%.

    Which sucks, because I opened my account this morning at 5.05% and they lower it a few hours later. Oh, well, it’s still better than ING and HSBC. (Citi also has a 4.75% account which I opened for the $100 bonus.)

  43. notallcompaniesarebad says:

    How much money do you guys leave in savings accounts? Seems like a lot of brain damage for a couple extra bucks.

  44. FLConsumer says:

    FNBO’s had a series of screwups over the past few months which have caused quite a few customers to leave them (myself included). Overly-personal information demanded, accounts randomly frozen, mass-emails sent out telling large #’s of people their accounts are frozen when they’re not. People being told their accounts aren’t frozen when they are, etc.

    Do a Google search for FNBO & “due diligence” and you’ll find quite a bit on it.

  45. mcpastry says:

    I have an FNBO account and I’ve had no problems with it. I signed up when the rate was 5.25, then they announced a month later that it was going up to 6%…and now it’s back down to 5.05%. They have sent out a few ridiculous accidental emails this summer, but what the heck, they definitely have the best interest rate.

  46. Leah says:

    @notallcompaniesarebad: even when you’re just saving $3-5,000, the higher interest rate can make a difference. Plus, it encourages me to put in more. I definitely don’t switch back and forth tho; I started with ING, and it’s easier to just stick with them. Maybe when I’ve got something more like $10-20K saved up, I’ll be more dilligent about getting the best interest rate ever.