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Telephone and Internet Bank First Direct of HSBC Scraps Credit Interest

By: Daniel Chubb | September 21, 2007 | 2 Comments

Telephone and Internet Bank First Direct of HSBC Scraps Credit Interest

First Direct is a telephone and internet bank that is part of the global banking giant HSBC.

Today First Direct announced that they will no longer be paying any interest on credit balances in its current bank accounts.

This change in First Direct policy will be effective from 1 November.

Currently, First Direct has two different types of current accounts. The Cheque account in my opinion pays a terrible of 0.10% a year AER or you can think of it as £1.50 a year before tax on a balance of £1,500.

The First Direct bank account pays a bit more, 2% AER but its still not that good at all. This would give £30 a year before tax on £1,500.

However all even this pathetic interest rate has been abolished as First Direct tries to get its 1.2 million customers to switch to a new saving account where they can “earn serious money on their savings”.

Do you have an account with First Direct?

If so will you be staying with First Direct or will you choose another bank?

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  • Dominique Reynolds

    Phoned first Direct this morning to tell them i have never ever ever wanted to leave them until NOW.

    Have now started the process of transferring to another bank. Been with FD for over 13 years

  • TD

    I work for fd, just in the call centre, but my opinion as an individual is that these moves will benefit fd’s customers.

    The automatic sweep from current account to savings means that customers can save each month. The first 250 quid of your overdraft is now debit interest free. Text message alerts are now free (were 2.50 per month). New 8% AER savings account (12 month contract, 25-300 deposit each month, set) and a penalty free e-savings account at 5.5%, available to all.

    Whats not to like? losing either 0.10% or 2% interest is not an issue if spare funds can be automatically sweep into an account which offers at least double the current account interest.

    I could understand the objection if they were not setting up facilities to ensure customers make up the difference elsewhere, but first direct have.

    So what specifically is the issue?