HSBC Review

HSBC is a global financial institution that serves over 40 million customers in 66 countries and territories. The bank was founded over 150 years ago in 1865 and keeps its current headquarters in London, England. HSBC is a well-known institution that offers checking and savings accounts, certificates of deposit and credit cards. The bank only has 200 branches located in the United States, however, which are mostly on the East and West Coasts. These physical locations tend to crop up near urban areas as well, leaving more rural communities with less access.

The interest rate for HSBC’s Direct Savings Account is excellent, as well as the Direct CD Account rate. However, the rest of its account options, when compared with the competition, offer mediocre rates.

HSBC at a Glance

Pros
  • High savings APY on Direct account
  • Award-winning credit card
  • High-yield CD
Cons
  • Confusing website
  • Not many physical branches
  • Low standard savings and CD rates

What’s interesting about HSBC

HSBC Bank has a few exciting options that could be worth looking into, such as its Direct Savings Account. The rate on this account is 22 times the national average, and applying online is easy. If you’re looking to open a savings account with a bank whose name is well-known, you might be in luck with HSBC. Plus, the Direct CD and Gold Credit Card could also be worth your time.

Things to consider

Although HSBC has many positive features, there aren’t enough physical branch locations. HSBC runs just over 200 branch locations across the country, and most of its ATMs are in large urban areas. This leaves large swaths of the country out of luck. Also, the website can be tricky to navigate. It seems like HSBC is running two distinct sites that don’t connect with each other — one for its standard low-yield accounts and another for its high-yield Direct accounts. Because the site isn’t extremely user-friendly, it’s challenging to make sure you’re finding the best account for you — not to mention, users rate the mobile app as imperfect.

Most notably, an easy search for HSBC will bring up a federal investigation that concluded in 2012 with a $1.9 billion dollar fine. HSBC was found to have lapses in anti-laundering measures, causing millions of dollars for the Mexican and Colombian drug cartels to slip through the system undetected.

Checking and savings accounts

HSBC offers four checking accounts: Basic, Choice, Advance, and Premier. HSBC’s Basic checking account has no minimum deposit requirement but charges a $3 monthly maintenance fee. A Basic account, along with the others, gives customers optional overdraft protection.

A Choice account requires maintaining a $1,500 minimum balance, or it will charge a $15 fee. However, you can avoid the charge if you sign up for direct deposit. With an Advance checking account, you’ll get refunded for up to four ATM fees per month and receive other perks. However, you’ll need to keep a $5,000 minimum balance with a recurring direct deposit, maintain a $10,000 minimum balance, or have a mortgage through HSBC. The Premier has an even higher minimum balance requirement at $75,000.

For an easy way to build your wealth, the HSBC Direct Savings Account is worth looking into. One thing to note: information on Direct accounts is strangely difficult to find because Direct accounts live on a distinct website from the standard. Browsing issues aside, a Direct Savings Account offers a 2.05% APY, which is 24 times better than the national average. You only need $1 to open the account, and there are no monthly maintenance fees. They also offer Money Management Tools to help you achieve your savings goals.

HSBC’s other savings accounts have a rate of at most 0.15%, which is much lower than average.

Money market accounts

HSBC doesn’t offer money-market accounts as part of its savings portfolio. One bank we recommend checking out if you would like to open a money-market account is Discover Bank. Although Discover is mostly an online entity, they are FDIC-insured and well-rated. Plus, they offer a simple sign-up process for a high rate of 1.65% APY for balances under $100,000 and 1.70% APY for balances over $100,000. Moreover, the fees that sometimes come with a money-market account don’t exist with Discover.

Another great option is CIT Bank’s money-market account, which has a rate of 1.85% APY. There are also no monthly service fees with CIT, and the bank won MoneyRates.com’s silver medal for best money-market rates of 2018.

CDs

The bank includes 3 standard CD options with not-so-great rates on their main website. Again, you’ll want to check the separate HSBC Direct website to find their best certificate-of-deposit rates.

HSBC has 3 Direct CD options:

  • A 6-month account with 2.00% APY
  • A 12-month account with 1.70% APY, and
  • A 24-month account with 1.70% APY

An interesting quirk is that the current rates are higher for the shorter 6-month term, which is unusual. The online application is easy, so you can quickly start gaining interest at a fixed rate. You need a minimum balance of $1,000 to open a Direct CD with HSBC, which is competitive with many other online banks. Furthermore, it’s a higher yield than many other big banks offering under 1.0% even for longer-term accounts.

After your CD matures, you have the option to cash out, roll the money into a new CD or renew at the current rates.

Credit cards

HSBC offers several different credit cards. The HSBC Gold ranked in the top five for best balance-transfer credit cards, likely because the card has a 0% APR for the first 18 months. This introductory timeline is considerably longer than what much of the competition offers. After the first 18 months, the APR increases to 12.74%, 16.74%, or 20.74%. Benefits include no foreign transaction fees, rental car coverage, and mobile pay.

If you’re more interested in cash-back rewards, look into the HSBC Cash Reward credit card. For the first year, you receive 3% cash back on all purchases up to $10,000, which then becomes 1.5% cash back after the introductory period. Additionally, the card has a 0% APR for the first 12 months. The bank’s other credit cards focus on earning its users reward points for items such as travel or dining and entertainment.

Personal loans

If you’re new to HSBC bank, you can only borrow up to $30,000, but that limit is extended to $50,000 for existing HSBC customers. Existing customers can also enjoy a 1% interest discount, bringing the rate down to starting 5.99%. These personal loans can be used for debt consolidation, weddings, and travel, but not education or business.

Mortgage loans

Just like many other major banks and lenders, HSBC does offer mortgage lenders for prospective homebuyers. Fixed mortgages (for $400,000) are attached with 3.563% APR while the adjustable-rate mortgages have 4.019%. This are around the national average, but customers could find better rates with challenger lenders.

Mortgage refinancing

HSBC Bank offers two options for mortgage refinancing: limited cash-out refinancing and cash-out refinancing. Taking advantage of a limited cash-out refi will allow you to pay off your current mortgage and roll the refi closing costs into the total amount of the new mortgage. This type of refi is best for people who want to reduce their interest rate or loan term but don’t necessarily have the cash for the refinance closing costs. Cash-out refinancing, on the other hand, is the best option if you’re refinancing to take advantage of your home equity. With a cash-out refi, your new mortgage is higher than the existing loan and you’re given the difference between the two loans, which goes into your pocket as cash. It’s the best option for people who need access to a large sum of money and don’t want to open a home equity line of credit.

Home equity loans and HELOCs

Home equity loans and lines of credit get a unique twist with HSBC Bank. Rather than offer traditional products, HSBC offers what it calls a “Home Equity Line of Choice,” which allow you to take advantage of your home’s equity via a credit line that has a low interest rate. If the line of credit is under $500,000, HSBC won’t charge you application fees, annual fees or closing costs with this line of choice. HSBC will allow certain customers to borrow up to $1 million, which is a much larger sum than most banks allow with HELOCs, which is what makes this bank’s line of choice unique.

Car loans

In 2010, HSBC sold the last of its auto loans to Santander in an effort to reduce loans in the United States in the wake of the 2008 financial crisis. If you’re looking for an auto loan, you can try looking into LightStream or Capital One. Capital One features an online Auto Navigator that makes buying a car easy, with 3.59% APR and a minimum loan amount of $4,000.

The final word

HSBC is good for anyone who lives in one of the areas with ATM coverage or a nearby branch location might benefit from becoming an HSBC customer. Also, someone looking to consolidate multiple high-interest credit cards into a single card can look into HSBC’s award-winning Gold credit card. The 0% interest for 18 months could be enticing for folks looking to pay down their debt.

However, someone who lives far from HSBC’s branches or ATMs might want to consider a different bank. Also, someone who is easily frustrated with clunky technology might want to avoid opening an HSBC account.