How your bank account can help supersize your savings

How your bank account can help supersize your savings

Whether you’re saving for a holiday, your dream car or maybe something bigger like a new home, scrimping and saving can be a tough battle.

But it doesn’t have to be that hard. By using HSBC’s Everyday Global Account, you could boost your savings with little effort, thanks to several perks it offers called Everyday Extras.

In recognition of these standout features, it recently won RateCity’s Best Bank Account Gold Award 2020.

What is cashback and how can it help you save?

One of the neatest perks that comes with the HSBC Everyday Global Account is its cashback feature.

Transaction accounts are usually for spending but there aren’t many that can actively help you save.

HSBC’s Everyday Global Account helps you do both through a cashback system. Cashback is when you receive a set proportion of an expense back into your own account in cash.

The Everyday Global Account lets you earn 2% cashback on eligible purchases of under $100 when you pay with Visa payWave, Google Pay or Apple Pay. This means you could earn $1.80 back from a $90 purchase (capped at $50 each month).

While budgeting regularly is the key to building savings, if you’re a serious long-term thinker, you’ll know that every incoming dollar counts in the long run, especially if you’ve got financial goals to kick.

You’ll need to deposit at least $2,000 into your Everyday Global Account each month to receive cashback. It’s also important to note that not all purchases are eligible for cashback. Terms and conditions and exclusions can be found here.

How much could you earn in cashback using HSBC’s Everyday Global Account?

No two people are going to have the same lifestyle and spending habits.

Your cashback amount depends on how you spend and how much you spend. For instance, you may earn less in cashback if you tend to use cash more often, even if your monthly expenses are high.

The maximum you’d be able to earn each month is $50, which could potentially add up to $600 a year.

But let’s say you’re not a big spender, and you make an average of $550 in small purchases each month.  This could add up to $132 cashback in one year, just by spending as you usually would on your regular debit card.

To help give you an idea of how much you could potentially earn in cashback with HSBC’s Everyday Global Account, RateCity has run some calculations with a few different spending levels in mind. Only purchases of under $100 were included in the calculations.

Note that the calculations are hypothetical scenarios and actual earnings may differ based on individual circumstances and spend.

Monthly average spend (purchases under $100 only) 2% cashback in one month Total cashback in one year
$550 $11 $132
$850 $17 $204
$1000 $20 $240
$1500 $30 $360
$2000 $40 $480
$2500 $50 $600

So, whether you’re supersizing your savings by $600 a year or you’re receiving $132 in cashback a year, HSBC’s Everyday Global Account can help bring you closer to your financial goals.

For more information or to apply for an account, head to HSBC to find out about its Everyday Global account.

 

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Learn more about savings accounts

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

How can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly.