HSBC warning as thousands of customers could be moved to a £60 per year account

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HSBC is popular amongst everyday consumers, but it is also used by a whole host of organisations, including charities. The name is popular on the high street for its wide variety of savings options to help Britons keep their cash secure, and indeed to grow it further. Keeping money in the bank is considered to be one of the safest places for it. Providers such as HSBC often have Financial Services Compensation Scheme (FSCS) protection, which means should the worst happen, Britons are protected up to £85,000. Other than this, though, in a bank money is also protected from natural disasters or unfortunate occurrences such as burglary or theft. However, some HSBC customers will need to pay attention to how their money is being stored – and the account they have selected. This is because the bank has announced it will be moving some of its customers onto a new account. It is the fact this account comes with a monthly fee that many people will want to note.

The provider plans to move thousands of charities, sports clubs and community groups with its current free Clubs and Community Bank Account onto a new option. This is to be called the Charitable Bank Account. 

The move is set to take place from November 1 onwards, and the new account is complete with a £5 per month fee – translating to a cost of £60 per year. Understandably, some will want to avoid this fee if it is at all possible. But first, it will be important to fully understand the changes which are due to occur.

People will only be moved across to the new Charitable Bank Account if they meet the account’s eligibility criteria. This states the organisation must exist for a charitable purpose. The bank confirms most of its current members will remain eligible for this kind of account.

But HSBC is taking active efforts to keep its customers in the loop about the matter. It has sent out letters to those who may be impacted by the change, informing them of it, and letting them know if any action will need to be taken on the matter.

READ MORE: Great update for savers as bank issues new account & increases rates

HSBC savings

HSBC warning as thousands of customers could be moved to a £60 per year account (Image: Getty)

At present, there is no option available for existing Clubs and Community Bank Account holders to keep their account. This means from November 1 these individuals will have to reckon with the change. New customers will only be able to open the Charitable Bank Account from this point onwards. 

Previously, the bank allowed charities and not-for-profit groups to hold and manage their money for free. This was the case as long as the organisation in question did not make any more than £100,000 per year. 

But the change is happening due to the bank’s need to increase its prices to more accurately reflect the cost of provision of a business bank account, as well as maintaining these kind of finances. 

HSBC has described its new account as “everyday banking at a reduced price for charities and not-for-profit organisations with a charitable purpose”. Aside from the £5 monthly fee, there is also a charge of 0.40 percent of the value deposited for a cash deposit in branch or via the Post Office. For a cheque deposit there is a 40 pence charge per cheque. 

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On its website, HSBC also flags an incentive it feels some may be interested in. This is a free 12 months British Cycling Fan Membership. It is available to HSBC UK business current account customers, although terms and conditions do apply. 

HSBC has acknowledged some may wish to switch away from the provider. If it is doing so into another UK based financial institution, then HSBC will send out a list of their Direct Debits and Standing Orders within five working days to the new bank. It will then transfer out the balance and close the account on the switch date as confirmed by the new provider.

The bank continued: “If your new bank or building society agrees, bank accounts that include an overdraft can switch using the Current Account Switch Service. 

“And if you’d like to have an overdraft with your new bank account, speak to your new bank or building society before starting your switch.

hsbc UK 2021

HSBC: The bank offers a variety of accounts for different needs (Image: Getty)

“Your new bank or building society will be able to advise if you’re eligible for an overdraft, dependent on their lending criteria and your credit status.”

People should, however, be aware that if they have given permissions to Third Party Providers to make payments on their behalf, this will not be transferred automatically to their new account as part of the Current Account Switch Service.

Before closing an account then, organisations should look at these third party permissions and set them up on their new account to offer permissions. 

This will need to be done by contacting these third parties directly to provide new account details. 

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Those who are looking to switch, however, should always bear in mind what kind of account they will be changing to, and with what provider.

Some banks will have a charge in place for this kind of banking, while others are set to offer the service for free. 

An HSBC spokesperson said: “Over the years, we have made significant enhancements to our business banking proposition to meet the evolving needs of our customers.

“We will be increasing our charges in a way that more accurately reflects the ongoing costs associated with improving and maintaining a business bank account.”

Harry Byrne

Harry Byrne

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