HSBC Bank Canada has announced an introductory interest rate of 5% for new accounts offered through its HSBCdirect.ca online banking service.

The rate is the highest rate currently offered by any Canadian bank for a high rate savings account.

Tracy Redies, executive vp, personal financial services, HSBC Bank Canada, says today’s announcement is in response to extensive research that pointed to a demand for this type of flexible savings vehicle.

“We are extremely excited about this product. The Direct Savings Account offers a high rate of interest and the flexibility that customers tell us they want. There is no minimum balance, no monthly or transaction fees and access to their account through one of the largest ABM networks in the country.”

“For those out there who don’t just dream but consciously plan their financial future, we decided to offer something more attractive than GICs, but which serves the same purpose. In fact, we believe our HSBC Direct Savings Account will become an integral part of many customers’ overall investment planning strategies.”

The HSBC Direct online savings account has a higher rate of return than 12-month GICs during the introductory period and far more flexibility, including the ability to access your money at any time without penalty or fee so we believe it represents an attractive option for new clients.

Canada’s big five domestic banks currently offer an average rate of 3.45% interest on a 12-month GIC with a minimum investment of $1,000.

For a promotional period between July 10 and October 10, the interest rate for customers new to HSBC Bank Canada who open an HSBC Direct Savings Account will be 5% on balances up to $1 million.