HSBC Bank tops competitors with 6 percent interest for online savings

NEW YORK — Seeking to attract deposits from people who are getting year-end bonuses or expect tax refunds, HSBC Bank USA is boosting the interest rate of its online savings account to 6 percent — topping its competitors.

HSBC Bank said that the new 6 percent annual percentage yield would be available through April 30 on "new money" deposited by existing clients or new customers in a HSBC Direct online account.

HSBC Bank USA is a division of the London-headquartered HSBC Holdings.

Kevin Newman, head of retail banking for HSBC in the United States, said that the bank was boosting its rate because it wanted "to maintain a leadership position" in online banking.

At the same time, he said, "this promotion over the next three months coincides with the time people get paid bonuses," so this will be a savings option for them.

Money in HSBC accounts now earns a 5.05 percent APY; the rate on new online accounts will revert to that after the three-month promotion ends.

Greg McBride, senior financial analyst with Bankrate.com, which tracks savings and loan rates, said the 6 percent being offered by HSBC tops the current leader in the online field, UnitedBank of Miami Lakes, Fla., which offers a 5.35 percent APY.

Other major online banks and their prevailing rates include EmigrantDirect of New York at 5.05 percent, Citibank Direct of New York at 5 percent and ING Direct of Wilmington, Del., at 4.5 percent.

McBride pointed out that all of the online accounts can be attractive to savers because consumers can withdraw their money when they need it and balances are insured by the Federal Deposit Insurance Corp.

"This is the time of year when many households have some additional cash at their disposal, either from annual bonus checks or tax refunds, and some are looking to save some of that," McBride said.

Many of the online banks have minimum deposit requirements, or minimum balances that must be maintained to avoid fees.

HSBC is among banks that don't have minimums.