A simples guide


If you’re looking to open a cash ISA with a large bank, they don’t come much bigger than HSBC. As you would expect from such a bank, HSBC offers a range of savings products, including two different types of cash ISA. Let’s find out more.

How does a HSBC Cash ISA work?

A HSBC Cash ISA account works in a very similar way to a savings account but it does have one important difference. That’s that any interest you earn on your savings through it will be tax free up to your yearly allowance.

Everybody has a yearly allowance which can be saved in an ISA - tax free. In 2016/2017 this limit is set at £15,240. In 2017/2018 it will increase significantly to £20,000.

ISA’s work independently of any bank accounts, and the interest you earn in your ISA is tax free irrespective of any interest you earn in your bank account.

Bank account interest is governed by Personal Savings Allowance rules introduced back in April 2016. These allow any savings account held by a basic rate taxpayer to accumulate £1,000 of tax free interest on an annual basis. For those of you on a higher rate or tax, the allowance is set at a lower £500, while if your total income is below £17,000 per annum, you’ll won’t have to pay any interest on your savings.

What types of HSBC Cash ISA are there?

There are two types of Cash ISAs available at HSBC, each with its own terms and conditions.

The HSBC Loyalty Cash ISA can be opened with just a £1 deposit but you’ll need to be a HSBC current account customer to open one.

This cash ISA pays you a higher “Loyalty” rate for 12 months before returning to a standard rate after that period. What type of loyalty rate depends on the type of HSBC current account you have

  • HSBC Premier Customers
  • HSBC Advance Customers

Other HSBC current account holders.

The ISA is instant access so you can retrieve your money when you like with no charges.

A HSBC Help to Buy ISA is available if you’re a first time buyer looking to save for your first home.

You can save up to £1,200 in the first calendar month and up to £200 monthly thereafter. On top of this, you will receive a 25% Government bonus up to a maximum of £3,000 on your savings.

The rate you’ll receive depends on your balance. 

Is a HSBC ISA right for me?

You should always do some careful thinking when you’re deciding which cash ISA to open. The interest rate you’ll receive is important, especially given the current low rates that are routinely available. If you’re able to commit your money for longer, you may be able to get a better rate than you can with instant access.

You’ll only know that if you shop around before you commit to any specific cash ISA.

That’s where we can help. Use our Cash ISA comparison service today and find the right ISA for your circumstances.

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