Savings explained

 

Confused by savings jargon or need to know
the basics about savings accounts?

Whether you're saving for something special or you want to start saving for a rainy day, it's important to find savings accounts that can help you reach your goals. Here are some things to consider.

 

Fixed rate savings

If you're saving for something in the long term - university fees or house deposit, for example - and you're sure you won't need access to your savings in the near future, you may want to consider a fixed term savings product.

Fixed term savings products can offer higher rates of interest than accounts that give you instant access to your money, but you'll be putting your money away for a set period of time - usually something between three months and five years.

You may wish to consider our:
Regular Saver
Fixed Rate Saver Bond

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Instant access savings

If you think you'll need to dip into your savings from time to time, you may want to consider an Instant access savings account that allows you to withdraw money without a penalty or loss of interest.

Some of these accounts offer bonus interest if you don't make a withdrawal. You'll need to check the rules on Notice Periods and how many withdrawals you can make in a year.

You may wish to consider our:
Online Bonus Saver
Flexible Saver
HSBC Premier Savings - exclusive to HSBC Premier customers

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Tax–efficient savings

Because of their tax advantages ISAs are subject to annual subscription limits. For the tax year commencing 6 April 2013 the overall ISA subscription limit is £11,520, of which up to £5,760 can be subscribed to a cash ISA with one provider. The remainder of the £11,520 can be invested in a stocks and shares ISA with either the same or another provider.

Alternatively, the full £11,520 can be invested in a stocks and shares ISA with one provider.

You may wish to consider our:

Cash ISAs
Stocks and Shares ISAs

The value of investments and any income can fall as well as rise and you may get back less than you originally invested.

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Online savings

Savings accounts you manage solely online can offer attractive rates of interest, but if you like the idea of popping into a branch they are probably not for you.

You may wish to consider our:
Online Bonus Saver
Cash e-ISA

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Under 18s savings

We offer a savings account designed especially for children between 7 and 17 called MySavings . If your child is between 16 - 18 years old they may wish to consider opening one of our range of Cash ISAs . And if you'd like to put money into a savings account on behalf of a child, you may wish to consider our:
Future Saver for Children account .

Please note that although The Child Trust Fund has now been phased out, if you already have one you can continue to save into it. The value of investments and any income can fall as well as rise and you may get back less than you originally invested.

 

Definitions

AER: this stands for Annual Equivalent Rate. It shows what the interest rate would be before any tax deductions if interest was paid and compounded each year.

Notice Period: with some accounts you have to let the bank know in advance if you want to take your money out, and pay a penalty or lose interest payments if you withdraw money immediately. It's wise to check the notice period required before you open a savings account.

Tax-free: free from any UK Income tax and Capital Gains Tax.

ISA: Individual Savings Account.

NET: is the interest rate you'll receive after applicable tax has been deducted, currently 20%. Higher rate tax payers will have an additional liability.

GROSS: is the interest rate you'll receive before applicable tax is deducted from your account.