Not understanding HSBC savings?

[toystory1130]

I am not understanding the 6% annual on savings. Do I have to leave all the $$ in there a year to see the 6%, or is it monthly? I am trying to calculate my interest.

 

[jnorth1007]

You are credited interest monthly based upon the average daily balance of your account. You will receive the 6% only on new money and if you want the full benefit you shouldn't withdraw any of it until after the promotion ends I think the last day of April. You will always gain interest but it depends on the money you have in the account and the time frame. HTH!

 

[toystory1130]

Thank you, that's exactly what I needed to know.

 

[summerrluvv]

A tip about that 6% interest rate. I heard it's not a permanent thing, and they are only doing it for tax time to get people to deposit their refunds.

 

[BethR]

Let's make sure that the OP understands this. When a bank is offering 6% APR (let's talk simple interest) that means that you would get 6% interest if you left your money in for 12 months. So if you put in $1000 on March 1, on February 25, 2008 you would have $1060 - the $60 paid once all at one time.

BUT, banks do not do simple interest. They do compounding interest. So let's say that you are getting 6% APR compounded monthly. So that $1000 that you would deposit on March 1 would get .5% (6% divided by 12 months) interest at the end of March - so you would have $100.50. Then at the end of April, you would get .5% interest on that $1005.00 - or $1010.03. Some banks compound daily, so you would take the APR and divide it by 365. Then you are earning interest on your interest every day.

I just wanted to make sure that you knew that if you deposited $1000 in HBSC at the 6% APR that they have right now, that you will NOT have $1060 at the end of the promotion.

I hope that this makes sense...

 

[BethR]

A tip about that 6% interest rate. I heard it's not a permanent thing, and they are only doing it for tax time to get people to deposit their refunds.

Absolutely true. The 6% promotion ends on April 30. Then the interest rate returns to its normal rate - which I think was 5.05% before the promotion began.