HSBC 5% Term Deposit i Promotion Until 18 January 2013

An article by GenX GenY GenZ : http://genxgenygenz.blogspot.com

Please do not reproduce/reprint this article in whole or part in any form.

HSBC Bank is the first bank to offer Fixed Deposit or Term Deposit Promotion that run into 2013.

From now until 18 January 2013, HSBC is offering promotional dividend rate of  5% for their Term Deposit -i 3 Months Tenure, sounds great.  But since it is a HSBC promotion, just like their credit card promotions, we must always read the terms and conditions.

Here are highlights and parts of the Terms and Conditions of the HSBC Deposit Drive Promotion:

Part of Clause 1 - This Promotion is from 18 October 2012 to 18 January 2013

Part of Clause 2 - This Promotion is open to the following categories of individual sole account holders and not joint account holders, who during the Promotion Period are:

I. New-to-HSBC Amanah Premier and HSBC Amanah Advance customers (“New HSBC Amanah Premier” and “New HSBC Amanah Advance”);
II. Existing customers of HSBC Amanah who upgrade to HSBC Amanah Premier or HSBC Amanah Advance status (“Upgrade Customers”);

Part of Clause 3 - Eligible Customers who closed/downgraded their HSBC Premier Account-i or HSBC Advance Account-i within the past 6 months of opening a new HSBC Premier Account-i/ HSBC Advance Account-i are not eligible to participate in this Promotion.

Clause 6. Term Deposit-i Standard Scheme: (“TD-i Offer”)

a) Enjoy a Special Profit Rate of 5.00% p.a. (“Special TD-i Profit Rate”) for placement of fresh funds in Malaysian Ringgit Term Deposit-i (“MYR TD-i”) (Standard Scheme only) for a tenure of 3 months limited to the initial placement only.
 

b) Upon maturity, the MYR TD-i shall thereafter be renewed for a tenure of 3 months on the Standard Scheme at the prevailing board rate* unless the Eligible Customer(s) instruct otherwise.

*Prevailing board rate refers to the board rate at the time of placement. The prevailing board rate as at 13 September 2012 for MYR TD-i Standard Scheme is 3.05% p.a. for 3 to 11 months tenure

Clause 7. Conditions for TD-i offer

a) Customers must open or have an HSBC Premier Account-i or HSBC Advance Account-i at any of the “Participating Branches” for the purposes of crediting the profit and to be eligible for TD-i Offer.

b) Customers must place 30% of their TD-i placement amount into HSBC Premier Account-i or HSBC Advance Account-i which will be earmarked and maintained for 3 months at the point of account opening. If the amount is not maintained for the time stated, the customer will not be eligible for the TD-i Offer.

For HSBC Amanah Premier

• Eligible Customers must on the same day:
• open an HSBC Premier Account-i (Eligible for Protection by PIDM) and an MYR TD-i account;
• place a minimum amount of RM200,000 or top up their existing Total Relationship Balance (“TRB”)** to a minimum amount of RM200,000 in their HSBC Premier Account-i (which would include the MYR TD-i) and/or Shariah-compliant investments at the point of account opening; and
• at the point of account opening, place a minimum of 30% of the MYR TD-i amount in their HSBC Premier Account-i and maintain it for 3 months

Note: ** TRB refers to any combination of Shariah-compliant deposit and wealth management products through HSBC Amanah, such as HSBC Premier Account-i, term deposit-i, unit trusts, structured investments-i, single contribution takaful plan (excluding single contribution structured linked takaful plan) inclusive of the HSBC Premier Account-i. If average monthly TRB drops below RM200,000, a monthly RM150 fee is payable for the HSBC Premier Account-i.

For HSBC Amanah Advance

• Eligible Customers must on the same day:
• open an HSBC Advance Account-i (Eligible for protection by PIDM) and an MYR TD-i account
• place a minimum amount of RM20,000 or top up their existing Total Relationship Balance (“TRB”)*** to a minimum amount of RM20,000 in their HSBC Advance Account-i (which would include the MYR TD-i) and/or Shariah-compliant investments at the point of account opening; and
• at the point of account opening, place a minimum of 30% of the MYR TD-i amount in their HSBC Advance Account-i and maintain it for 3 months.

e) The maximum placement amount for the TD-i Offer per customer is:
RM100,000 for HSBC Amanah Premier customers; and
RM50,000 for HSBC Amanah Advance customers.

If you are interested in depositing with HSBC, I  strongly recommended that you visit HSBC website and read the complete Terms and Conditions of the HSBC Deposit Drive Promotion offering 5% dividend for 3 months Term Deposit.

Why can't HSBC just offer a straight forward 5% Term Deposit for 3 Months instead of making it so damn complicated? It took me sometime to understand what the heck the above means (that's is if I understand and interpret the clauses correctly). I will try my best to summarize the above "nonsense" as follow for Premier Account:

1. To qualify for HSBC Premier Account, one needs to have Total  Relationship Balance of RM200K which can include combinations of cash deposits, structured investment, unit trust and etc. But just let's say we want to deposit RM200K cash and want to go with product(s) that offers us the highest interest rate from Term Deposit/Fixed Deposit. 

2. So from Clause 7.e) shown above, only maximum of RM100K can be deposited into the HSBC Deposit Drive Promotion to earn 5% interest rate for 3 months.

3.  Part of Clause 7.b) states place a minimum of 30% of the MYR TD-i amount in their HSBC Premier Account-i and maintain it for 3 months.  This means if one is depositing RM100K to get 5% dividend rate, he/she has to deposit RM30K into the HSBC Premier Account-i.

What the heck is HSBC Premier Account-i?

Once again, it took me sometime to figure out what is the HSBC Premier Account-i, and what I found out is that it's like a CASA which pays miserable interest rates. I had to go hunt for the rates and here is it for you easy reference:

The interest you earn from the HSBC Premier Account-i is based on tiers and with RM30K, you can earn up to 0.4% dividend rate. Freaking low. 

4. Anyway, we started of with RM200K where RM100K will be deposited with HSBC 5% Promo and RM30K into the HSBC Premier Account-i. As such, we are left with RM70K to deposit into HSBC Term Deposit-i 3 month tenure which earn us 3.05% dividend rate.

5. With the above 3 products and assuming that we get 0.4% for the Premier Account-i (since interest rate is freaking low, no difference if I were to calculate based on tiers), I can conclude that the effective interest rate we get from RM200K for opening a new HSBC Premier Account works out to be approximately 3.6275%

CONCLUSION

The maximum effective interest rate for the HSBC Drive Deposit Promotion works out to be 3.627% ( based on RM200K, if more, then it becomes less). I guess it's better we go with other banks' Fixed Deposit Promotions that do not require us to maintain RM200K with them after our FD matures.

Remember, I have shown you in Clause7 above that you'll be penalized RM150 should your Total Relationship Balance (TRB) falls below RM200K.

If you were to maintain the required RM200K with HSBC after the promo FD matures, you will only earn board interest rate of 3.20% for 12 months Term Deposit (rate as of 1st November 2012). If you were to use this same amount and go deposit with other bank's FD Promotion offering interest rate of 3.6% (which is also Affin Bank's Board Rate for 12 months FD), you can earn extra 0.4% or RM800 a year. And if you were to go with Bank Rakyat Qiradh Investment Account-i where it states the current dividend rate at 4.05%, you can earn extra RM1,700!

And more importantly, since the last 2 years, HSBC has not offer their Term Deposit Promos to existing customers but only to new sign ups. As such, come to think of it, with effective interest rate  of 3.627%, might as well go deposit with Affin and save us the hassle of opening and closing the HSBC Premier Account.

For the Latest and Highest Fixed Deposit/Term Deposit Interest Rates - click here to my FIXED DEPOSIT PAGE at my main blog.

Other banks refer the TRB as Assets Under Engagement (AUM) and many do not penalize us if our AUM falls below the minimum required amount when signing up for Premier or Priority or Privilege Banking. Click here to learn more about Premier, Priority and Privilege Banking with Allaince, HLB, OCBC, RHB, SCB and UOB where they do not penalize their valued customers for nothing :)

And if you are considering opening a HSBC Premier Account to enjoy the above said "5%" dividend rate for 3 months. I suggest you look into OCBC Premier Account 5% Promo where you can get better  effective interst rate of minimum 4.27%. Click here to read more on OCBC  Booster Deals - Up to 5% Interest Rate for 3 months FD until 31 December 2012.