Best Savings Accounts in Hong Kong for Expats part 1 – that will be the topic of today’s article.
The Hong Kong dollar is pegged to the US dollar, so in many ways, it might seem that this banking system is very similar to the one in the States. However, there are some important differences that expats should be aware of when they’re looking for a savings account tailor-made for them.
The main difference between how Americans and Hong Kongers manage their money is that Americans tend to use bank accounts to store their funds while Hong Kongers tend to tap into and use credit cards much more. This means that expats moving to the city need to carefully consider whether they should open a checking account or a savings account, as many banks offer both options.
It’s worth noting that because of this practice, people tend to save much less than they actually could. One thing that expats must be aware of when signing up for a bank account in Hong Kong is the fee structures. Many banks charge monthly fees for having accounts open and annual fees for ATM withdrawals and transfers, which foreigners find especially unreasonably.
An expat’s life also has a lot of ups and downs that can affect their finances and decision-making processes, such as moving to the city with a limited budget but no fixed income yet or having to make expensive international transfers from time to time.
As such, you need to look at whether your bank provides special rates for certain types of transfers or whether they offer discounts on international transactions. Not to worry, we have compiled this article to explain everything about the best savings accounts in Hong Kong and many others. Read further to get a glimpse of what we’re saying.
What to Know About Banking System in Hong Kong
In Hong Kong, you will likely need a bank account to save your money or pay for basic services such as phone bills and electricity bills. Fortunately, numerous banks in Hong Kong offer various types of banking services along with free accounts for students and foreigners. Here are the things you should know about the banking system in Hong Kong.
1) Overview of Banks Operating in Hong Kong
Hong Kong has an international financial center home to more than five commercial banks, some of which are local while the rest are international. Hong Kong is also home to more than 28 foreign banks, which include six from Canada, six from the USA, six from the UK, five from Australia and New Zealand, along several other countries.
2) Getting a Hong Kong Company Started
For those who want to establish their company in Hong Kong, there are three essential steps they need to follow:
- Apply for the Certificate of Incorporation at Hong Kong Companies Registry.
- Open a bank account (with HSBC, Standard Chartered, and Hang Seng Bank) and deposit the minimum required capital.
- Apply for business registration with Inland Revenue Department using form IR5B.
3) Banking Laws and Regulations in Hong Kong
Hong Kong is a free market economy with light-touch regulation, encouraging financial institutions to compete for business by offering competitive interest rates and better banking services. All banks must follow the guidelines set by different regulatory authorities, which include the following.
- Hong Kong Monetary Authority (HKMA)
- Securities and Futures Commission (SFC)
- Insurance Authority (IA)
- The Office of the Commissioner of Insurance
The bank must follow the rules set by these regulatory authorities to ensure that their customers’ interests are upheld. There are no restrictions on the number of accounts that an individual or company can open in Hong Kong. However, an individual can withdraw up to $100,000 from his bank account per day, while businesses can withdraw $500,000.
4) Cost of Banking in Hong Kong
Hong Kong’s banking system is known for its low-cost and efficient banking practices with a flat fee structure and no hidden charges for services like account opening, deposit, withdrawal, and transfer. Small businesses in Hong Kong can choose from a range of banking options, including savings accounts, cheques, or current accounts and credit cards.
Apart from free-of-cost products for individuals, there are no charges levied on company bank accounts. Banks also do not charge any fees for moving funds from one account to another, making a Hong Kong bank account a cost-effective choice for businesses.
5) Banking Security in Hong Kong
Considering the importance of the banking industry in Hong Kong, banks have invested heavily in the latest information technology systems to ensure that customer data remains secure at all times.
There are also strict anti-money laundering policies that banks strictly enforce. Hong Kong is also home to the world’s largest cash vault, which stores billions of dollars daily for local and international customers.
6) Direct Tax System in Hong Kong
The government places a heavy emphasis on direct taxes as they are the major source of revenue. All companies and individuals must file their tax returns by 31 March following the financial year. Tax rates are progressive, starting at 1.4% for annual income less than $20,000 to 17% for more than $500,000.
7) Measures to Safeguard Customers’ Interests
Hong Kong Monetary Authority (HKMA) is the governmental authority that has been put in place for protecting customers’ interests and regulating financial institutions. HKMA is responsible for licensing banks, setting banking regulations, and taking measures if any fraud occurs. It also conducts audits to assess whether or not banks are following the rules.
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Best Savings Accounts in Hong Kong
A savings account is a bank account that allows the owner to deposit and withdraw cash. The money from these accounts can be earned through interest, paid periodically by the bank. It means that people with savings accounts usually have access to their funds at any time, whereas those with checking accounts must wait for their request to be processed.
What Are Savings Account Opportunities?
Everyone should have some money saved up for emergencies or other unexpected life events because this account doesn’t affect your credit score – allowing you to make your dream purchases quicker than if you had to wait for a loan.
But savings accounts can be beneficial in other ways too. You might want to save up for something big, like buying a house or starting your own business; these types of long-term goals are much easier to achieve when you know that you have money set aside each month.
Most banks offer incentives for putting away a small amount of money each month, which is basically free money that can be used to boost your savings.
Are There Any Incentives for having Savings?
One thing to remember is that savings accounts are not checking accounts, and using them as such may have some negative implications. They’re meant to be your emergency fund – but if you find yourself dipping into these funds regularly, it might be time to re-evaluate your budgeting strategy.
Are you looking for the best savings account out there? Something that will give you reasonable interest rates and save more, or manage your investments easily? Whether it’s for yourself or your children, these top saving accounts in Hong Kong are what you need.
Hong Kong is full of opportunities to save money. There are a lot of banks in Hong Kong, and all of them offer good savings accounts to manage your money well. You have different options for banks, so you should do some research before picking one. Here is a list of the best savings accounts in Hong Kong.
- DBS VISA Infinite
- SCB Advantage
- HSBC Premier Savings Account
- HSBC Smart Connect
- Hang Seng Bank
The DBS Visa Infinite and the SCB Advantage are two of the best savings accounts in Hong Kong. They both have a high-interest rate, they’re easy to use, and you can get many benefits from them. Let’s go through them and see why they are so good.
DBS VISA Infinite
This is a credit card cum savings account from DBS, one of the biggest banks in Hong Kong. The best thing about this savings account is that you get 0.3% interest when you hold an active DBS VISA Infinite credit card.
That means that every HK$1,000 you spend on your credit card earns you an extra 30 cents. You can hold up to 4 different cards under this account and get higher interest rates when you use them more.
This is another good savings account in Hong Kong. It has a 0.3% interest rate, the same as the DBS VISA Infinite, but it also has some other benefits. For example, you get free insurance on your credit card purchases with this account.
This means that every time you use your credit card to pay for something, there will be an additional HK$250,000 insurance for damaged or stolen products while the goods are being delivered.
Another great thing about this account is that you can get it even if you don’t have an SCB credit card, so even if you don’t have an HSBC premier savings account or other accounts in Hong Kong, you still have the chance to earn reasonable interest rates on your money.
HSBC Premier Savings Account
This is another HSBC account, but it benefits less than the HSBC Smart Connect one. This savings account earns you 0.3% interest, and that’s all there is to it. However, you can get a bank book and apply for an ATM card given to you when you open this account (you don’t necessarily need to be an HSBC client).
HSBC Smart Connect
This savings account is quite different from the rest because it gives you discounts on HSBC products. You get a HK$100 discount when you use your debit card at any HSBC ATM in Hong Kong, 10% off on selected insurance products, 5% rebate on all transactions done with your credit card, and more. It’s an excellent account to have if you prefer discounts over different interest rates.
This is an online bank, so it’s different from the ones listed above, traditional brick and mortar banking services. It has many benefits, like free insurance on your first purchase made at any shopping mall in Hong Kong, up to 3 years of free warranty on products purchased with your credit card, and more. It’s perfect for those looking for something different from traditional banks in Hong Kong.
Standard Chartered BonusSaver
This is another great account for people with money to invest. This account offers 2% interest per month, which means that your money can increase if you let it sit there for one year. It also comes at no cost, and you can make transfers through internet banking or mobile app. You don’t need to maintain a certain balance to keep the account open; you only need HK$1 to use it.
This savings account is opened with at least HK$1, and you can earn interest through internet banking or mobile banking. You can also withdraw money from ATMs for free, but if you do it at Citibank ATMs, you will earn $3 interest. The account doesn’t have any monthly fees, but there is a $10 if you close your account without warning.