Personal Finance 

Bank Services More Important Than Interest Rate

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A few weeks ago I asked for your opinion of the best high yield savings account and the one thing I learned something very interesting. With interest rates as low as they are, with many banks offering less than 2%, it’s the other services and amenities that dictate which bank you’ll work with.

I had a Twitter conversation with Debt Hater about HSBC Direct’s somewhat annoying certificate of deposit renewal/cancellation policy. HSBC Direct will automatically renew your CD and then give you ten days to cancel it. On the face of it, it sounds fairly straightforward but for whatever reason Debt Hater needed to spend 30 minutes of her life fixing a problem HSBC Direct created. I spent five minutes calling up HSBC Direct, because I wanted to tell them I didn’t want to renew the CD, only to be told I needed to wait until it renewed and then cancel it afterwards.

We keep an updated list of the best CD rates.

Compare this to ING Direct’s CD management options. With ING Direct, you can tell them that you don’t want to renew (or that you want to renew) the CD whenever it matures. You can tell them online and do it at any time you want. How much of an interest rate difference is there? HSBC Direct’s 12 month CD rate is 2.30% APY and ING Direct’s 12 month CD rate is 1.50% APY. The difference of 0.80% is $8 per every $1,000 saved. After taxes, it’s not even enough for lunch.

Sometimes convenience trumps return, especially when interest rates are so low.

{ 12 comments, please add your thoughts now! }

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12 Responses to “Bank Services More Important Than Interest Rate”

  1. barry says:

    I am pretty much unaffected by “service”. I’m self-sufficient in most things, checking my balances, transferring funds, etc…all online.

    I wouldn’t do business with a company that MAKES me contact them (like you described the HSBC CD fiasco above). Unless, of course, it’s the highest available interest rate, in which case I would “grin and bear it”. But I won’t pay more for pretty much ANYTHING to gain better Customer Service.

    could just be me though…

  2. Daniel says:

    Speaking of CD policies – GMAC (where I have all my laddered CDs right now) has a cancellation policy that involves calling them up to specify what you would like done with your maturing CD. It’s not a huge deal, but I do wish you could specify this online instead of making a phone call.

    But I agree, the low rates and the small differences between them all right now, make it so that other options and features are taking precedence.

  3. Paige says:

    I am the opposite of Barry. I would go to the place that offers the best customer service over a better rate. That is why we have stuck with our bank. They may not offer the best rates, but they offer the best service and they know us, we can do everything over the phone w/a rep or we can do ALOT online. Love them!

  4. In India atleast most of the banks are unique in terms of rate and service and have clientele according to that. For example all PSUs have better rate but pathetic service while private and foreign banks have higher charges but provide excellent personailsed service. PSUS are popular amongst the weaker section while more savvy and affluent people prefer the foreign banks.
    I for one want an idela mix of both and hence opt for bank like CItibank.

  5. service does make a big difference to me. Although most of my banking (90%) is done online, I still test the bank CS by calling into their support and even go into the branch during busy hours to see how I am served (before switching banks). This my personal ‘stress test’.

  6. barry says:

    let me clarify my opinion on this:

    I’m not talking about the difference between getting .25% and .10% on my account. I’m talking the difference between .25% that I was getting at BofA vs 4.25% I get at Texans Credit Union! For that, they can dog-cuss my momma every time I call!

    Service is one thing…everything being equal, sure…I’d choose the place with the best service, but when the rates are that out of whack…naw.

  7. AverageJoe says:

    I tend to agree with Barry, it depends on the size of the gap, but it also depends on dollar amount!
    I would not really care about a difference of 2.0% on $1,000 if my bank were convenient, and I got good service. That’s only $20/yr!

    However, for a CD of $50,000, even only .50% is $250/yr. I might think twice on that, especially since I don’t really need convenience or frequent contact with a CSR for a CD alone.
    So how did this apply in real life? I love ING, have 6 small savings accounts there. But it’s only at 1.50%, so I decided to visit a local bank offering 2% on a 4 month CD instead, so I could take some time to see where interest rates are going.

  8. Kenny says:

    I have been using HSBC Direct for a while, and it is VERY irritating on what they do for opening CDs and Rolling over the CDs.

    It has to mature.

    It has to be a secure email.

    Notification does not quickly.

    Then when they sent me a notification it took 3 weeks to get it in the mail that it has rolled over to the Savings account (of course, I could see it by mail).

    The letter that came had a special offer to open a Premier Account (for a good gift). Called that number the day after I got the statement, and it was already a disconnected 866 number.

    Called the other number, and it will not accept my CD account number (since it is closed now), and not acceptable. But, then, there is absolutely no key stroke in the IVR (automated phone system) to route out to an agent. I tried every single option, every single common sense option (*#, *0, 0#, *T, T#, *T# etc).

    HSBC is one of my corporate accounts, and I am going to report it to the IT department, but they are going to say ‘Huh’ and chuck it out (don’t know, but I will update you when I get to them).

    Now, I am left trying to figure out how can I get the gift to open the HSBC Premier account.

    To make matters worse, I turned the page on the flyer that came in the mail with the statement, and it was already and expired offer!!!!!!! So, even if the phone system or number would have worked, it was useless.

    WHICH global banking company is still in existence with such unproven, illogical, idiotic, non-customer-friendly practices?

    Buzzz….YOU GOT IT RIGHT> HSBC Direct!!!!!!!!!!!!

    Thanks for listening to my rant……

    Kenny (KKP_Investor)

  9. annonymous says:


    I must agree that HSBC’s interest rates are often and as of current pretty conservative. However, Banks, like other businesses do not seek to be the leading bank in all area of their industry, but instead seek to identify their “niche” and operate within it; thus for example there are “commercial banks” , those that tend mostly to the commercial market sector,(which HSBC happens to be), and then there are “consumer banks”, those that tend mostly to the everyday personal banking consumer.

    With this in mind, HSBC maintains a conservative and long-term approach and perspective to how it conducts its’ banking business. As a commercially focused bank, HSBC is not as concerned with competing with consumer interest rates; that’s simply not their “niche”.

    On the other hand, being commercially and “service” focused is broader than that which todays increasingly self-reliant and informed customers do to manage their online checkings and savings accounts.

    HSBC remains a leading financial instution in the entire world, with holdings in more than 85 countries and territories, boasted a 3.7 increase in profits last year during a transitional economy; is the worlds largest global presence in banking which is a tremdous shift in “service-focus” as the needs of todays banking customers are far from mere domestic. In addition, service for HSBC also means realizing that while people are increasingly savvy and informed, mananging money is dynamic and constantly chaning. Am I investing in the right mediums or markets? Should I place my money here? What options are available to me abroad, etc.? “Service” for HSBC then means seeking to be a leading expert in helping our customers in making the most important decisions about how their business and consumers alike manage their wealth. This value is not even worthy of being compared to the consumer banking world of “interest rates alone”.

    Value is not “one size fits all”. Value is in what is needed and in what is unique to an individual. Everyone (every bank) has their place in the world. HSBC’s place is “THE WORLD.”

  10. AverageJoe says:

    As with most big companies, it depends. You have had a great experience with HSBC, but I have not. And one of my customers is leaving them completely because despite their global cache’, operationally, they are set up in different divisions. So when he is in Hong Kong, the online system and customer service is very spotty, because his accounts were opened in HSBC USA. Things are not seamless and convenient in his case, though they should be.

    • annonymous says:


      HSBC has specific products and services to meet the needs of the international and mobile customer. HSBC has an entire segment dedicated to these kinds of needs. Including, “HSBC Premier Services” and “HSBC International Banking Center”; a part of which is their global online presence: “Global View”.

      I would suggest that your friend stop into a branch or call 800 975 4722 and ask to speak with a Premier or International Representative (US based if your friend calls before 12 midnight – GMT). I’m led to believe based (limitedly) upon what you’ve shared that your friend just hasn’t been connected with what HSBC has in place to meet his specific needs.

  11. thomas says:

    The HSBC cd policy is a tad bit overboard. I see this type of nickel&dime act to continue now that banks are trying to make up for lost deposits and earnings.

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