HSBC Direct Bank-to-Bank Funds Transfer Schedules

I must admit, after opening up my HSBC Direct account I went ahead and linked all of my numerous other bank accounts (except ING). Other than racking up over $6 in trial deposits, I envisioned having HSBC be my hub for all my interbank transfers. But then I heard some rumblings about how HSBC Direct is really slow with their online bank-to-bank transfers. During the last week, I’ve been shooting various amounts of money around my different accounts, and they have all been following the schedule that HSBC openly discloses. I couldn’t get a link to it as it only works when I sign in, but here is a screenshot of it (click to enlarge):

It’s true, it can take a while if you miss their 8pm Eastern deadline. For example, if you did it on late Wednesday night, it would count as a Thursday submission, and the money would be taken out of the initial account on Friday and wouldn’t be put in the receiving account until Tuesday. That’s almost a week, sort of, and you’d lose 4 days of interest.

But overall, it takes 2-3 business days, which I thought was about industry standard. Sunday through Tuesday are the best days to initiate transfers in order to minimize transfer time and lost interest. Next week I’ll try the other online banks and see how they compare.

Comments

  1. I experience 2-3 business days as well.

    They’re so quick to deduct the money from the account but slow to deposit into your own account.

  2. Here’s some data for GMAC.

    On 1/11 did a pull. GMAC said transfer would happen on 1/12. GMAC credited account on 1/12 and debit at source bank occurred on 1/13. When this starts officially accruing interest at GMAC I don’t know.

    On 1/11 did a push, GMAC said tranfer would happen on 1/13. On 1/13 debit at GMAC bank AND a credit at receiving bank on 1/13. So they debit your account the same day there’s a corresponding credit at the receiving bank. I like that.

  3. Re: GMAC…isn’t that pretty standard for these banks? That they only “hold” on deposits and not on withdrawals?

    Thanks for doing this test Jonathan, I hadn’t even *seen* that schedule page, but my feeling was that it was taking about 2-3 business days as well. I believe ING is a 5 day hold?

    The thing that I wonder about is HSBC seems to use average balance to calculate interest whereas ING seems to just start accruing as you deposit etc. Even if this is so, I’m not clear if just the straight APY to APY comparison makes that moot, or if we’re somehow getting a little less in HSBC because of when in the month we might deposit yaddy yaddy.

    Thoughts?

  4. I thought I also read that HSBC charges $3 to transfer money FROM their bank to another bank. Did I understand correctly?

  5. Quick back of the hand calculation:

    It will take ~47 days for a 4.25% interest account (HSBC) to equal ~50 days worth of interest in a 4.00% account (Emigrant). The ~50 and ~47 account for the three day transfer period.

    So, if you plan on keeping your money in your savings account for more than 50 days (3 for transfer, 47 for gaining higher interest), make the transfer!

    Details:
    (47/365)*0.0425*X = 0.0055*X (HSBC account)
    (50/365)*0.0400*X = 0.0055*X (Emigrant account)

    X being the principle amount (ends up being irrelevant since both values are proportional to it)

  6. Industry standard is 2-3 days except for example ING, ED , Fidelity , USAA, Vangaurd, Citibank , Bank of America and GMAC ACH transfer work very differnt from HSBC.

    You logon on Bank A web page and make a submission to transfer $100 on Monday to Bank B after 10pm they will debit your money on Wednesday and Bank B will credit your account on Wednesday.

    Now HSBC works like this make Submission on Monday at 10pm to transfer money to Bank B. Money is debited from HSBC account on Tuesday and it will not be credited to Bank B till Thursday.

    So where does the money go for 2 days? In HSBC account as they want to collect 2 days interest on all incoming or out going money. It seems no other bank does this and HSBC own ACH provider Cashedge advertises “next-day funds availability” as a key advantage to there service.

    You loose 0.0164% of interest per day based on a rate of 4.25%. So at 4 days min per round trip(2 days inbound and outbond) that lowers your yeild down to 4.20 a year still not bad.

    Personally if they dont want to pay 4.25% and really only want to pay 4.20% they should just lower the interest rate paid on the account and not play games with there ACH transfer as they know most people will deposit and withdrawning money every month more than likely.

  7. I dont know how can you call hsbc “standard”. I have seen this sneaky standard only on paypal and hsbc. Most other banks dont keep your money interest free for 2 days during ACH.

  8. Thanks for the info.How do transfer work from an HSBC (or ING) account to another person’s bank account? Has there been any analysis done on this?Would love to hear more info as I’m currently looking for an easy way to pay a small (5-15 people) group of vendors, contractors, etc. I hate writing checks and mailing them. This is the future so there must be an easier way, right?

  9. To be honest, I haven’t paid too much attention to these transfers. I really thought they all took 2-3 days. No?

    Caitlin – I believe that 5 day hold is ING not letting you withdraw a deposit for 5 days. It’s still earning interest though, not in between-bank limbo that this seems to be.

    SMB – The $3 charge does not apply to the HSBC OnlineSavings / HSBCDirect account.

    um – Maybe try your bank’s Online Bill Pay? Will still mail a check, but it’d be easier to track.

  10. CashEdge was the ACH used by the old Yahoo! FundsTransfer service. The standard transfers were “free”, however, I believe CashEdge made money by holding the money for 1-2 days without paying interest. I have used the HSBC CashEdge transfer and it is exactly the same, except HSBC must be on one end of the transfer.

    When I make transfers with ED, Etrade, Fidelity, Treasury Direct, they all debit and credit my accounts same day without lost interest.

  11. Jonathan – Thanks. The one time I’ve used the online bill pay from my bank (Wells Fargo) it was ridiculous. Like you said, they cut a check and then mailed it. 5 days later my contractor across town had the check that would have taken 1 day to arrive if I had dropped it in the mail. It seems like there has to be a better way short of using Paypal, where the receiver pays a hefty fee. Maybe the HSBC CashEdge transfer is what I’m looking for?

  12. No you want to do is ACH e-check transaction and they are not free. Citibank and HSBC offers ACH E-check on there bussiness accounts and they let you pay anyone who you know there bank account number without need to verify the account or have matching names on both accounts but there is a charge to use this service. Citibank Charges $3 per transfer under 100 transfers a month and $1 over 100 transfers a month. HSBC charges $1.50 per transfer.

    You can only do ACH transfer with Online savings accounts between account that are owned by the same person or have a commen authorized user.

  13. I have an Emigrant Direct account and thinking about opening a HSBC account. What’s the routing # for Emigrant so I can link it?

  14. Emigrant’s routing # is 226070319

  15. For the life of me, i just could not get any external transfer account setup in HSBC. Can anyone offer some help here? Should i try to link to HSBC from ING or Emigrant???

    HSBC’s site wanted me to enter ATM # and PIN but i don’t have one, i don’t believe they gave me one at all when i opened the account.

    Help

  16. Al – Just call customer services and they will help you wiht that step, my wife do not have AMT card and she called the other day and was able to do the transfer.

    talking aboutn ACH tranfer, on 1/02 did a pull from HSBC and ED to Washington Mutual, I noticed on my WAMU statement money was out on 1/03 but credited on 01/05 on my HSBC accout, but for ED money was out 01/04 and credited the some day.

  17. I know HSBC doesn’t charge for bank to bank transfers, but does your other bank charge you? I have Wells Fargo and really don’t want to be hit with ACH charges.

  18. I’ve never had a bank account (and I’ve had over 20) that charged for ACH in/out initiated elsewhere. That’d be like charging to receive direct deposits! I doubt WF does, but you can ask. I’d avoid any bank that would charge for ACH initiated elsewhere.

  19. My experience with ING has been wonderful. Hard to believe but I have deposited money into ING and had it show up in ING the day before my bank showed the money gone! Typically when I withdraw from ING it shows up in my bank the next business day and vice versa.

    NOTE: the transfer does not happen the day I initiate it. There is a some delay, but ING does not mess with your money. Capital One took three full business days after the money left my bank account to show up as a deposit in my CapitalOne account.

    Are there ACH rules for bank-to-bank transfers?

  20. I tried HSBC the whole past week for bank to bank transfer. Had a savings account and made *** HUGE *** mistake not to open a checking account at the same time.

    I needed money for a down payment, tried to open up a checking account online for faster transfer, and fund it from savings account, but HSBC couldn’t even link the two together.

    Called their customer service several times, and past the first level of incompetent -but polite- agents in India, you get the American speaking ones slightly more knowledgeable but rude half of the time.

    Received mixed information, some wrong, like we could initiate a wire transfer from our local bank, and the number to call them back was wrong.

    Virtually impossible to get hold of somebody with a direct phone number, so you get bounced around every time. And they don’t seem to use trouble tickets, so you have to repeat everything all over again every time. Calling themselves a “local bank” is a big joke !

    Found out last day that we could have asked for a certified check to be mailed to us, after 4 days asking for a way to get our money back ASAP. Ended up doing bank to bank transfer. Even initiated before 8pm eastern time, took a full 3 business days, 5 regular days to complete the transfer. Drove to their nearest physical branch to find out they do only commercial loans. A rude lady at the branch said HSBC website is wrong saying they handle personal accounts. Being rude for their own mistake is hardly good customer service…

    Anyway, I terminated our HSBC account shortly after the transfer was confirmed.

    HSBC review in short:
    - Great rates for savings account, 5%, and now 6% for new deposits.
    - Lousy customer service, either rude or incompetent

    If you don’t expect any single problem ever on your account, and want to bet that you will never need customer service, and you can wait for most services, even opening up an acocunt online, and you don’t mind if they don’t call you when there is a problem, then HSBC might be for you.

    JB

  21. Same initials as John B.

    anyhow, I started online saving accounts with ING about 5 years ago. I now have Emigrant Direct, Amboy, FirstFed, ING and HSBC.

    With HSBC the transfers take at least 3 days. Start on Monday transferring from your checking to HSBC, lose interest for 4 days and get the money in their account by Friday. Withdraw on Friday and you won’t see the money back in your checking until Thursday of the next week. Lose interest for 6 days. A round trip take 9-10 days during which time your money is in limbo not earning interest.

    There is absolutely no reason to go with HSBC at all. Their rate is 5.05%, nothing special – just run of the mill competitive, occassionally they have a sucker high rate like the 6.00% for new money that just ended. You have to do some math to figure how much you will interest you will lose if you need to round trip your money and balance that against the teaser special rates.

    ING take 2 days each way, and they have a very low rate of 4.5. So I emptied my savings account. I only have CDs with them opened when they occassionally have specials. They also offer renewal bonus’s – currently ING is giving me 5.35% on a 9 month renewal, so I am letting it role over. I like INGs website, options and setup the best of any – too bad the savings rate is not competitive.

    For fast transfers Amboy ( 5.10%) and Emigrant Direct ( 5.05% ) take 1 day, so usually does FirstFed of California ( 5.16% ). I can do a round trip in 2 days with these banks.

    If I do a transfer done late in the day on Monday, I nearly always have the money in my checking account by Tuesday.

    Amboy just pissed me off by lowering the rate for deposits over 20K to 5.10% from 5.25%. However they do have their CDs tied in with their online savings making it easy to open. Emigrant Direct is the same way. Both of these banks let you transfer the CD money right back into the savings account. That way you won’t lose money not earning interest waiting for a check to show up in the mail.

    What I am learning is that none of these banks ever keeps there rates at the leading edge, and you never can predict when they will no longer be the most competive anymore. I find that having several works to my advantage, kind of like diversification in banks

  22. I agree with everyone on here about the REALLY slow online bank-to-bank transfers at HSBC. I wish I had read some of these reviews before opening an online savings account at HSBC. I will be terminating my account there ASAP!!!

  23. hsbc direct insterest rate is going down to 4.5%, the mortage business in US is done and they are closing branches. I’ll move my money out inmediately.

  24. will not disclose says:

    F.Y.I all electronic funds transfers go through the A.C.H (Automated Clearing House). Depending on the amount of transfer the Automated Clearing house holds the funds up to 2 business days. Standard transfer time for ALL banks is 3-5 business days.

    ALSO another tip. If you are making a deposit into GMAC Bank, you will begin earning interest the business day after you ask for the transfer to be made: EXAMPLE: On 10/15/2007 (Monday) you call and ask a rep to transfer funds, on 10/16/2007 (Tuesday) you begin earning interest on the amount of funds to be deposited into GMAC Bank.

  25. FYI.
    Banking regulations state that interest is only earned when the money is placed in a deposit account. When your funds are being transferred by ACH houses such as Cashedge, no interest is earned by ANY party. Be it the originating bank, the receiving bank or the ACH house.

    Remember people… Yes, an ACH is an electronic transaction.
    No, it is not instant. Two days is really bare minimum for an ACH transfer between two banks… Three days is the standard. Some banks will memo credit you for funds being received from other financial institutions. However this is done in good faith by the institution.

  26. will not disclose says:

    ACTUALLY, I work for GMAC and yes we POST OUR incoming ACH transfers the business day after you request the funds to be transfered as I exampled above. We call it the Good faith posting in other words we are trusting that the funds are there!!!!!!!!!!! So check with you bank YOU MAY BE SURPRISED!

  27. Just came here to investigate the transfer situation after finding a transfer from Bank America to ING took two weeks (June 16 left BofA, June 30 shows up at ING)…. that seems really wrong. Time to make some calls.

  28. Any idea how HSBC sends money from the Payment account to another account at another bank, is it wire transfer (which means Incoming Transfer Fee from my bank) or a direct deposit (which means a free incoming transfer)?

  29. Been waiting for funds to clear which have been sent from HSBC account into a Commonwealth bank account. funds were deposited Thursday morning 22/10/09 still not cleared or can i even see the funds. is this normal? Also i was given a receipt number for these funds from the person depositing them. receipt is a 9 digit number (which looks odd). Does anyone know what the receipt number should look like? I was asked for my banks SWIFT code, so prehaps its a SWIFT number?? Any ideas?

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