HSBC pays 8% to lure savers

HSBC pays 8% to lure savers

The battle between Britain's banks could intensify this week. HSBC is launching a new high-interest savings account and Abbey National is expected to unveil its own plans to win new customers.

The HSBC savings account, aimed at regular savers with £25 to £250 a month to deposit, pays 8% gross for the first 12 months. HSBC said it was paying a higher interest rate than any rival. Only customers with an HSBC current account will be eligible for the new savings product, so the move is also seen as an attempt to boost its current account numbers.

Later this week Abbey National's new owner, Banco Santander Central Hispano, is expected to announce its plans for the high-street bank after taking control in November.

The previous management's attempts to reinvent the bank simply as Abbey is regarded by rivals as having stagnated and many are waiting to see whether the new team will opt for a rebranding exercise.

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Abbey is due to make an announcement on Friday, the same day that Santander reveals its results for 2004. The City will also watch the Abbey presentation for details of further write-downs in its troublesome markets and life units.

Greater competition for customers has been kick-started by HBOS and Lloyds TSB. HBOS began advertising a debit card with a cashback facility last weekend while Lloyds TSB is offering £50 to new current account customers.

Guardian Unlimited © Guardian Newspapers Limited 2005