Online Bank Comparisons: HSBC

This is the second in a three part series comparing the online banks I've used. The first part was on ING and the third review, of SmartyPig, is coming on Thursday.

This post has been edited to provide the current interest rates for the listed companies. They are correct as of 2-19-2009.

The second bank account I opened was with HSBC. I had been using ING for a few months, but hoped to get a better rate of interest on my deposits. I looked around for other online banks, and came across HSBC as a possibility. I opened an account, and have been using it primarily as an emergency fund (although, as of late, I've had to take out most of the money to cover my regular expenses).

What's the overall view of HSBC? Well, let's see...

Ease of Use: HSBC is a bit less user -friendly than ING, requiring more time to learn how to transfer funds and use the other features of the account. It isn't extremely complicated, but the learning curve is steeper, expecially if you're not used to online banking.

Transfer Speed: HSBC is somewhat slower than ING, taking about three business days for deposits or withdraws to clear. While not a huge problem, this does make it more difficult to use, especially if you need to make frequent or quick money transfers.

Interest Rates: HSBC does tend to offer higher rates than ING, usually by about 0.25% to 0.50% during the time that I've been using it. (Currently, the HSBC rate is 2.25% vs. 1.85% for ING.) It's the not the highest rate possible (SmartyPig, for one, typically offers much higher interest rates (3.25% currently)), but does tend to be fairly solid.

Extras: HSBC does seem to have slighly more security than ING or SmartyPig, requiring an extra security key (entered using the mouse) on top of the password. The effort may be enough to make you feel more comfortable about putting your money into their online account.

Overall: 3/5 The extra interest boost is nice, but the added difficulty of using the site and the time needed to transfer money decrease its utility. It's probably best to leave it as a secondary account, and use another account for most of your online banking services.