HSBC cuts Bank Account Plus credit interest rate

In response to HSBC's 2% AER reduction to the Bank Account Plus in-credit interest rate, Louise Bond, personal finance manager at uSwitch.com, comments: "As Santander does the decent thing by increasing the in-credit interest rate on both Alliance and Leicester (Premier Direct and Premier 50) and Abbey (Credit Option) current accounts to a market leading 6% AER, HSBC cuts rates by 2% AER for all Bank Account Plus customers.

"This account now offers consumers an in-credit interest rate of 0% across all tiers. This is pretty disappointing as the packaged deal costs consumers £146.40 per year. Previously, these customers received 2% AER on balances of up to £1,000 which could have earned them anything up to £20 per year in interest.

"In stark contrast, qualifying Abbey and Alliance and Leicester current account customers could earn anything up to £150 a year in interest under the new 6% AER deal. This is an extra £25 a year following the 1% in-credit interest rate increase which comes into effect today.

"The HSBC Bank Account Plus is a packaged account, offering benefits such as travel insurance, breakdown cover, life cover and identity theft protection. If all of these benefits are utilised, it could still be a good deal for some people. However, there are several other packaged accounts available which offer in-credit interest rates of up to 6% AER so it's definitely worth looking around for the best deal."