HSBC bank review; a better online bank in Australia?

This article will share my experiences researching HSBC Bank as a personal bank account provider in Australia, and determine whether I will switch from ING bank to HSBC.

Disclaimer – the information about products, rates and fees were current at the time of publishing. To make sure, always read the product disclosure statement before signing up to anything.

Introduction

I recently posted this article reviewing ING Bank from my experience as a long term customer over the past 5 years, which sparked up quite a bit of furious debate online as to which indeed was the best online bank in Australia. I had actually never heard of HSBC Bank before, but people claimed they offer some pretty juicy sign up deals, had no fees, as well as provide some great cash back offers linked to purchases made on their debit cards. So of course, I thought I would be crazy not to investigate. I found that there was only a few outdated and pretty terrible reviews of HSBC Bank online, so I wrote this one.

HSBC Bank

HSBC Bank Australia limited is a branch of HSBC Holdings – the Hongkong and Shanghai Banking Corporation Limited. This is a British owned bank, and was first started in the 1860s as way for Europeans to bank and trade in Asia. HSBC has grown into one of the worlds largest banks – serving over 40 million customers globally with over 6000 offices across over 64 countries. HSBC is a publicly listed company (London and Paris exchanges) with nearly 200,000 shareholders from over 130 countries.

HSBC has been providing licenced financial services in Australia since the 60s, and has been providing retail banking services to Australians since 1986. They offer personal banking, home loans, personal loans, credit cards and term deposits, as well as financial planning, custodianship and commercial banking services. You can even use HSBC’s share trading platform to buy and sell shares in Australia – however like most banking brokers, the fees are horrendous.

With only 30-something Australian branches and 2000 employees, HSBC is a relatively small brand name in Australia and really fills the role of an online bank. Personally, I never visit branches so I don’t mind this. HSBC focus their market on expert banking and loans for expats and foreign citizens, allowing customers to bank and purchase across multiple currencies within the one account.

Something interesting but that might suprise you is that that HSBC actually controls big stakes Australia’s big four banks (about 15% to 19% of each according to research initially done by Finity in 2014), don’t grab your tin foil hat and join an anti-monopoly banking reform just yet – they also found that JP Morgan, Citigroup and National Nominees all owned huge stakes in Australian banks too. This is because they all act as nominee or custodians for their customers who are the individual shareholders.

HSBC Bank Transaction Account – Everyday Global Account

The Everyday Global Account is the name for HSBC’s standard transaction account. You can use it to pay for transactions in over 10 base currencies using Visa debit, PayWave, Apple pay and Google Pay. Loading base currencies within your account is fairly simple, and can even be done on the mobile app – you just transfer across for example AUD to USD within your account.

To access the bonus ‘Everyday Extras’ like cash back, no fees and the extra interest rate on your linked Serious Saver savings account, you will need to deposit at least $2,000 per month into your Everyday Global Account. I like that you can then transfer this money straight back out, and you have still met the requirements for ‘Everyday Extras’. There is no minimum spend or minimum number of transactions you will need to make to be eligible for ‘Everyday Extras’ like there are with other banks.

HSBC Bank Savings Account – Serious Saver

HSBC offer a Flexi-saver account but it has a lower interest rate than the Serious Saver, so I am just going to talk about the good one. For the serious Saver, if you don’t make a withdrawal for the first four months, you are awarded a bonus interest rate – this then drops off and leaves you with a much lower ongoing standard variable rate – currently its pretty much zero.

You get awarded a ‘bonus’ interest rate on your Serious Saver if you have a linked Everyday Global Account and meet the ‘Everyday Extras’ requirement of depositing at least $2,000 per month (into the Everyday Global Account), which means you will at least be getting something, but again, this is still under 1% and pretty much nothing. You shouldn’t really have too much cash anyway as its just going to inflate away, much better off investing it into index funds.

HSBC $100 sign up deal

Currently, new HSBC customers can get $100 when they sign up. This is a pretty juicy offer and worth considering just for the sign up bonus if I am blatantly honest. It’s not ‘instant money’ though – you will have to open an account and deposit at least $2,000 per month for three consecutive months. This way, they force you into becoming familiar with the HSBC banking system and hope that you will stick around. If you don’t like it at the end, take your $100 and close your account.

If you want a little ‘hack’ for this sign up bonus – you can instantly transfer the $2,000 back out again, so technically you can just bounce the same $2,000 back and forth over three months and end up getting your $100 sign up bonus. Its probably about an hour of work all up, including the sign up process and transfers, so not bad money for your time. Currently HSBC say this sign up offer will close in December 2020.

HSBC Cash back offer

HSBC offer a 2% cash-back on purchases made with the HSBC everyday global account (transaction account). This is only for purchases up to AUD $100, and is capped at a maximum of $50 cash back per month.

To get this maximum cash back, you would need to make 25 x $100 transactions, for a total of $2500 of transactions per month, or just over $600 per week. I’m not sure who is going to be making $600 per week of discretionary transactions, but you can count things like groceries, food, shopping, petrol etc. Unfortunately you cant pay your rent on it (and this would likely exceed your $100 cap anyway!).

When I looked at my bank card history with ING to compare, for my eligible purchases it meant that I would be getting somewhere like $5-10 per month in cash back rewards – which is better than nothing, but not a huge motivator for me to switch if I am honest.

HSBC Bank Mobile application

HSBC have a mobile banking application for Android or iOS devices which is available on the Google or Apple app store. It can be clunky at times, and frustrating if you get locked out of two factor authentication, but overall it is easy enough to use.

HSBC Bank Account Fees

HSBC advertise that they are a fee-free personal transaction and savings account structure – No monthly account keeping fees, no transfer fees and no ATM fees. However, I found out that it is only ATM fee free if you are using HSBC or HSBC partnered fee-free ATMs (Westpac, Bank SA, St. George Bank and Bank of Melbourne), so if you use a non-partnered ATM you will still get stung with an ATM withdrawal fee.

For the full list of terms and conditions, as well as their fee structure, you need to look closely through their Product Disclosure Statements for the products you might be using (such as the Global Everyday Account and Serious Saver Account). These can be found on their website (I would link to them but because banks keep changing their websites and file structures, these links often expire and I am sick of updating them!)

Opening a HSBC Bank account

Opening a HSBC Bank account is a fairly standard process. You will need to be over 18 years of age, provide personal details, provide a form of identification (photo ID such as a passport or Drivers licence), and provide proof of an Australian residential address.

Things I like about HSBC Bank

• You can pre-load up to 10 foreign currencies onto your Everyday Global transaction account so you can plan ahead and spend in local currencies.
• If you run out of local currency, you can still use your card and it will default to billing your primary base currency (i.e. Aussie dollars).
• Competitive live foreign exchange rates are provided by Visa (not HSBC).
• $100 sign up bonus
• No account keeping or transaction fees with ‘Everyday Extras’ applied
• Access to ‘Everyday Extras’ is easy – just transfer $2,000 per month into the account (can transfer it back straight out)
• No minimum spend or minimum number of card transactions to access ‘Everyday Extras’ like many other banks require
• 2% Cashback on eligible purchases is a great opportunity to save

Things I don’t like about HSBC Bank

• Clunky security measures can leave you without access to funds (i.e. complex two factor authentication which sometimes requires you to use the website as well as your personal mobile device).
• They claim to have no ATM fees, but this is only on participating ATM providers. You will be charged ATM fees by a significant number of banks or tellers, and HSBC will not reimburse you for this
• Poor (pretty much 0) interest rate on savings – currently after four months of signing up the Serious Saver online savings account introductory interest rate gets slashed – leaving you with practically zero interest being earned on any savings. You do earn a small bit of extra interest with a linked transaction account and ‘Everyday Extras’ but this is still almost zero.
• 2% cashback offer has limitations – max $100 per transaction makes it much more difficult to reach the $2500 monthly transaction limit to get the cap of $50 per month cash back.

Am I switching to HSBC Bank?

All things being considered, no, I am not personally switching to HSBC Bank. I did enjoy becoming a customer and getting the $100 Sign up bonus, but I personally see no need for me to load multiple base currencies on my transaction account. I am happy enough with the Visa floating exchange rate – although yes I wish the Aussie Dollar was a bit higher when I am overseas so I get better deals (and of course so I can invest in more of the Vanguard US ETF ‘VTS’ at a better rate!). When I consider the potential rewards of the 2% cash back offer (and its limitations), this is only worth really currently worth about $10 per month for me, and I will save more than that by staying with ING due to their ‘no ATM fees ever policy’.

Conclusion

HSBC Bank have positioned themselves to be very attractive option for frequent travelers, expats and foreign citizens in Australia. The HSBC Everyday Global Account can be loaded with various currencies which lets you spend local currency, and is backed up by the Visa foreign exchange rate. For those able to transfer $2,000 per month and unlock ‘Everyday Extras’, you qualify for no account management, transaction or ATM fees (HSBC or partnered ATMs only). They offer an attractive 2% cashback scheme on purchases, as well as a lucrative sign up offer to new customers. HSBC is well worth considering as an online bank.

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