Earlier today the SQL database server (whatever that is) was out of commission, so the blog was in limbo.  I lost out on thousands of traffic and millions in ad revenue. heh.

If you’ve stumbled onto this review because you’ve been looking at high-yield online savings account, then you must have noticed the abundance of choices and options.

HSBC Direct started offering their online savings account back in 2005 with little fanfare, but they have since become much more well known through the years.  This is an in-depth review of the HSBC Direct Online Savings Account, with screenshots of account usage and bank transfer from over three years of account ownership.

You can read the entire review from start to finish, or skip all the way to the summary for a list of pros and cons.  If you have any feedback on the HSBC Direct Online Savings Account or this review, feel free to leave a comment below.

Account Opening Process

Opening an account at HSBC Direct should be a breeze for most people. You fill in the usual personal information and type in other information requested. HSBC’s opening application distinguished itself with a few convenient features:

1. You can save the application and finish it later
2. Different options for linked account verification

When you open an online savings account such as HSBC Direct, you will usually have to link the savings account to an existing checking account. To verify the linked checking account, most banks will usually do a two deposit verification method. In this method, two small trial deposit will be made to your checking account, which you later verify the amounts to confirm your identity as the account owner.

One of the account verification methods is an “instant verification” process, which simply requires you to input your online account information (the login & password) of the checking account being verified. The instant verification is limited to the Yodlee online banking solution, an online banking method that most major banks utilize.

The rest of the account opening process is smooth, albeit slow. Unlike ING Direct, which allows you to open an account without waiting for any mail — a problem with many online-only-accounts from traditional bank, is that the account opening process still heavily relies on snail mail.

HSBC has the same problem, but fortunately the mails were sent within a reasonable time period. You should expect to receive six separate mail piece:

1. Temporary login for online access
2. Temporary password for online access
3. Account number and ABA routing number
4. A letter informing you that the ATM card is on its way
5. The actual ATM card
6. The PIN for the ATM card

You will need all of the mail above, except #4, to have full access to your account. The time frame for the mail to arrive will vary depending on your location. It took about 12 business day for me to receive all the mail from New York to California. It’s understandable that this information was sent separately, as privacy and security is important — but HSBC can probably streamline the process better & faster.

Account Access and Interface

When I first got an account at HSBC Direct, the domain HSBCdirect.com was not setup yet — in fact, it wasn’t even called HSBC Direct yet. It took a bit of digging to find out where to login to access my account. Today, all you have to do is head to HSBCdirect.com and the link for account access will be on the front page.

The first page you’ll see when you login is fairly straight forward. You will be greeted by an Account Summary page, which gives you a quick summary of your account balance as of today. Click on the left picture below to see the Account Summary page.

The Accounts Detail page is self explanatory. You will see balance information such as bank balance, available balance, last state date, year to date interest, and the last nine transactions on your account. If you wish to view previous transaction, you will have to use the transaction search function, which allows you to search through different date and amount ranges. One feature that’s lacking is a daily update of interest earned for the month. You can click on the right picture above to see the Accounts Detail page.

You can also export your account data and specific transaction date ranges into three different file formats. HSBC supports Quicken (qfx, qif) and MS Money (ofx). Your account statements can be view with the eStatements tab, which also allows you to save & print the statement in pdf format.

Online Bank to Bank Transfer

This is the meat of an online savings account, the online transfer capability. Clicking on the Bank to Bank Transfer tab will bring you to an annoying Security Key screen. In order to create a Security Key, you will need your ATM card number and its PIN number, both of which will arrive via snail mail. In another words, you won’t have full access to your account until you receive both of those mail piece. You are required to use the virtual keyboard to input your security key. HSBC requires a certain length to the security key, so it can become quite a hassle to input the key. Click on the left picture below to see the Security Key interface.

Once you have input the security key, a new window will open up with the Bank to Bank transfer feature. In this page, you can add, remove, and transfer funds between accounts. The interface is straight-forward, adding accounts requires the usual two trial deposit verification. A great thing about HSBC’s Bank to Bank transfer is that it allows an unlimited amount of accounts linked. You can add your checking, savings, and brokerage account from various financial institutions. The Bank to Bank electronic transfer service is provided by CashEdge.

Be aware that some accounts cannot be linked to the HSBC Online Savings Account, such as the ING Direct Oranges Saving Account. According to HSBC, members of the CashEdge network can exclude themselves from being linked. Apparently ING Direct excluded themselves to be linked (an understandable action to prevent easy withdrawal of account funds to their competitors). You can click on the right picture above to see the Bank to Bank Transfer interface.

Bank to Bank Transfer Speed

Up untill this point, everything about HSBC Direct is decent enough. Unfortunately, there’s no such thing as a perfect banking experience, so here’s the drawback to the HSBC Direct account — the online bank to bank transfer speed. Compare to other competitors ACH transfer speed, HSBC’s transaction speed is ridiculously slow. Through my various transfer to and from various accounts, the transaction speed of HSBC is usually slower by 1-2 days, and at times, 3 days slower. Whenever I push a transfer from another source to HSBC Direct, the deposit will show within a reasonable 1-2 business day time frame. However, if the situation is reverse, and I pull the amount from that account to HSBC, via HSBC’s Bank to Bank transfer feature, the same transaction takes an extra business day or two.

There is a great HSBC Direct transfer speed experiment that can be found over at MyMoneyBlog.com. In the experiment, Jonathan conducted various transfer through different financial institutions. The result is quite interesting and correlates with my experiences with HSBC Direct. You should definitely check out Jonathan’s post for more information.

The lowdown on the transfer speed is that HSBC is probably keeping a day or two of interest through the ACH — interest that you’re not earning. When you utilize the Bank to Bank Transfer, you should pay close attention to HSBC’s transfer schedule, and make due sure you initiate transfer before the 8 PM EST cut-off. Looking at HSBC’s transfer schedule, the best days to initiate a transfer would probably be Sunday through Tuesday.

Customer Service Functionality

You can contact customer service via the Bank Mail interface in the online account, or by calling HSBC at 1-800-975-HSBC. The call center is 24/7, although the quality and availability of support will vary depending on the time called. Your best bet for non-emergency inquiry would be the online Bank Mail feature. Response time for my test questions were within a reasonable 4-8 hours time frame. Answers provided were thankfully not robotic responses. The response to my basic question about how-to use a function was written clearly and straight-forward.

Contacting customer service via phone definitely leaves a lot to be desired. The wait time at peak business hour can be quite long (over 10 minutes) and at times, you may reach a customer service rep that’s not knowledgeable on the HSBC Direct Online Savings Account. According to Gethuman.com, the fastest way to reach a human operator at HSBC is by calling 1-800-477-6000 — press 1, 3, then 0. It would be great if HSBC eventually introduces a specific number to reach operators that specialize in HSBC Direct specifically.

Overall Account Impression

As mentioned, HSBC’s questionable ACH delays can be a big turn-off to many, but in my opinion it isn’t a major issue for a savings account. It would have been great though, to use HSBC Direct as a central hub to transfer funds, thanks to the account’s unlimited account linking capability.

HSBC Direct’s APY rate is consistently competitive among other no fees, no minimum accounts. They have stay within the market’s rate, and at times have lead the pack. Although you are required to have $1+ to receive the current APR, unlike Emigrant Direct, your account at HSBC Direct will not be closed if the balance reaches $0. I’ve had $0 balance at HSBC without issue, but to be safe and avoid hassle, you should still leave a small amount in HSBC Direct.

If it wasn’t for the slow ACH transfer speed and a few other minor quirks such as the Security Key interface, HSBC Direct would be a pretty sweet high-yield online savings account. That said, HSBC Direct is still semi-sweet — like, kettle corn sweet.

Pros:

• Competitive high-yield rate
• No fee, no minimum, FDIC insured
• Unlimited account linking
• Decent account opening process
• Functional, error-free site

Cons:

• Slow ACH speed compare to competitors
• Hassle access to ACH due to Security Key
• Snail mail required for account opening

Current Rate:

• 3.00% APY as of 11/06/08

Updated 11/17/2008	myFICO.com 20% off promotional code

Use the button above and the promotional code will apply automatically before you complete your purchase. Discount applies regardless of how many scores you get — after all, you don’t really need all three if a lender in question only checks one particular reporting agency.

If you’re not in a financial situation where you need to know or track your credit score, this is not a recommended purchase.

Related Post:

• Review: myFICO.com’s FICO Score Deluxe / Complete

It’s official.

I am now filthy rich, thanks to the readers of this blog. The referral count for SurveySavvy sign up is now at over 100 people.

Was cleaning up my desk today when I found a $40 check from SurveySavvy. The check was from back in January! It’s a good thing it was found before the check voided. Login to the account today and voila, another $42. Totally sweet.

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Related Post and Links

• Earn Money From Online Survey Sites
• MyMoneyBlog’s Bored Money

Well, it’s friday so I guess its time to offend.

A bit crude, but to be fair in the full show he’ll be making fun of everyone.

You can watch his full show at Comedy Now via Google Video, it’s pretty entertaining so if you like stand ups you should check it out.

The few times I’ve given money to beggars, it’s usually to people who are clearly disabled. A bit discriminating, I know. Most of the time I’m reluctant to give money to beggars — especially if they’re asking for it. It’s kind of weird, if they’re not asking for money, then they’ll have a better shot at getting it from me.

Now, I don’t have anything against giving. I prefer to donate to reputable charities though, since they can better determine the use of the funds than I can. That’s probably the reason why I’m reluctant to give money to beggars — I’m unsure of what they’re going to do with the money.

It seems there are always those stories about fake beggars, people that pretend they’re poor so they can get a hand-out. I always thought they were exaggerations, until I heard a story from an old friend last night.

My friend worked at a restaurant in the Costa Mesa area, and they have a frequent beggar that shows up occasionally around the restaurant. Feeling sorry for her one day, due the female beggar’s ragged appearance and what not, my friend decided to give her some food from the restaurant — since the person seemed hungry.

Right when my friend told me that, I thought she’ll tell me that the beggar refuse the food & wanted money instead, which wasn’t the case. The person thanked her for the food and ate as if it was the last meal.

Days later, my friend bumped into the same beggar, this time, wearing stylish clothes and covered with jewelry. Hmm. The “beggar” was embarrassed to be caught, gave a weak smile as a form of apology, and hurried off away from my friend’s gaze.

“I couldn’t believe it! The last time she totally looked like the real deal. Ragged clothes, messy hair, dirty fingers, etc.” my surprised friend told me.

And I guess I couldn’t believe it too, I haven’t heard many stories like this directly. It’s usually an indirect story from someone else, hearing it from another person.

“Now that I think about it,” my friend continued, “I’d much rather give money to those with the funny signs. You know, the guys with the signs that reads: Let’s be honest, I just want money for booze & crack.”

And that made me wonder. Are those beggars just trying to be funny, were really being honest, or just using a different tactic while on the job?

	Any kind of iPod I will never, ever, buy an iPod. They’re a little bit too expensive for my taste. If I ever have to get a mp3 player, I’ll grab some cheap no name brand. It’s a good thing I hate music and have no joy in my life, so I’ll probably never have to buy a mp3 player.
	A Mini-Van It’s not that I hate mini-vans, but I hope I’ll never have to buy one. I’ll buy a fuel-inefficient SUV before I have to get a mini van. Or some crazy crossover that they’ll no doubt make later on.
	Golf Equipments I suck at golf. It’s one of those things that require some amount of patience and body control. No thanks. Are golf carts an exception though? I hope so.
	A Helicopter Not because I don’t like helicopters. Unfortunately, I don’t think I can ever afford one. Every time I’m stuck in traffic, I’ll wish for a helicopter, or a jet pack. I also want to own a solid gold toilet one day, but you know — can’t have everything.

Feel free to chime in on some things you won’t ever buy.

• Four Things Savvy Saver Won’t Buy

Otherwise, getting hit by a car while on your motorcycle (again), wouldn’t be so tolerable.

My sister just called me. Apparently her boyfriend got hit by another careless driver who didn’t check the blind spot.

“What!? Again? Is he okay?”

“Yeah he’s fine. He skidded on his butt. His pants were ripped a bit,” my sister told me.

About the same time last year, the same thing happened to my sister’s boyfriend. A driver hit him while changing lane — not realizing my sister’s boyfriend was in the adjacent lane. The damage from the previous accident was severe, but his bike was eventually fixed. Unfortunately this time, the motorcycle is totaled.

So after we talked about all the steps to take, a giggle peeped out of my sister’s boyfriend — and we all started laughing.

“I have seriously the worse luck.” my sister’s boyfriend said.

We all laughed, and we all agreed on his dumb luck. We’re well aware of how much worse it could have been. Scraped buttocks, compared to the alternatives, isn’t so bad really. At the end he’s okay, and that is what’s important.

The insurance of the other party will be annoying to deal with. Replacing and finding temporary transportation would be a hassle. But you gotta laugh. Only people with a butt made of steel, with the worse luck, could have it happen again in the same month, during the same hour, and on the same street.