Certificates of deposit (CD) are considered to be one of the most popular, and indeed safest, methods of investing cash. The interest rates offered on CD’s are typically far better than those offered on liquid deposit accounts, although they are highly unlikely to outpace inflation over a longer period of time. A CD will have a specific investment term, and if an investor wishes to withdraw their money early they will face penalties.

The maximum investment in a CD is $250,000, and this is great news, as the Federal Deposit Insurance Corporation (FDIC) will insure CD’s up to a value of $250,000. Therefore, CDs are pretty much immune to any form of credit risk, although the risk of inflation may cause an issue. The majority of the largest, multi-national banks offer CD’s, and HSBC is no different.

HSBC is, without doubt, one of the most recognizable, largest and best banks in the world, and they have a major presence in countries such as the United Kingdom, France, Hong Kong, Brazil, Mexico, and of course the United States. They currently offer CD terms from 3 months, 6 months, 9 months, 11 months, 1 year plus 1 day, 13 months, 15 months and 2 years, although these may differ depending on whether a customer wishes to open their account online or by phone.

The interest rates on these investments currently range from 0.05% for a 3 month term to 0.35% for a 2 year term (a shorter term of 1 year to 15 months will generally offer higher rates for online investments), whereas an in branch rate of 0.80% is offered on HSBC CD’s with a term of 4 to 10 years. These rates have drastically dropped over the past few years due to the economic recession, and the rates offered previously were typically well in excess of 5%-6%.

HSBC currently require a minimum deposit of $10 to open a CD account, although in order to earn the annual percentage yield (APY) quoted, customers will need to invest a minimum sum of $1,000. There are no monthly maintenance fees required for an HSBC CD, although, as mentioned, there is a penalty for withdrawing funds prior to the maturity date.

In order to fund an HSBC certificate of deposit a customer can easily transfer money from an existing HSBC account, via a non-HSBC transfer or even through the mail with a check or money order. Once the account has been established there is nothing further for the customer to do until the certificate of deposit matures.

It is important to note that the rates offered with an HSBC CD will typically vary depending on whether the account is opened online or over the phone, and therefore the rates and terms quoted here may differ to what is actually offered, although they will be fairly similar. Many people find that this system of differentiating between where the account is opened is unnecessarily complicated.

Once the CD has matured there are a number of options available to customers. They can:

  • Allow the balance to roll over into another CD of the same term. The “new” CD will earn the then-current interest rate and APY for the same term, and there is no need to renew.
  • Money can also be added to the maturing CD during the grace period when renewing the CD into the same term.
  • A new CD can be opened with the balance.
  • The funds can be transferred to another HSBC deposits account during the grace period.

In order to apply for an online HSBC CD a customer will have a total of 30 calendar days to complete their application. After this period they will need to start a new application. The account will be confirmed via email, which will also provide instructions to log into a personal internet banking account and open a BankMail which will contain the customer’s eReceipt.

The eReceipt is an official document which will contain a customer’s issue date, maturity date, and the APY of the CD. The online CD will need to be approved once an application has been submitted, but this is typically completed within 1-2 business days. For security purposes, a customer’s user name will be sent by email, whereas passwords will be sent separately via US mail, typically within 5-7 business days.

Related Information