Lloyds Bank vs HSBC: Accounts, Rates & More Compared

Thinking of switching banks? Or perhaps you’re new to the UK and are looking to open your first bank account.

Whichever is the case, we’re here to help. We’ve put together a guide to two of the UK’s biggest banks, Lloyds vs. HSBC. We’ll pit them against each other on the things that matter, such as accounts, features, fees, security and more.

It’s all so that you can make an informed choice of which is better for your needs.

We’ll also take a look at how much each bank charges for international transactions, whether it’s sending money abroad or spending on holiday. This can be a real deal breaker, especially if you travel a lot or have family in other countries.

We’ll even show you an alternative which could save you money - the Wise multi-currency account.

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But first, let’s get some background on both Lloyds and HSBC.

Lloyds vs. HSBC - An overview

Before diving into accounts, fees and everything else, it can be useful to know a little about each bank first.

One of the oldest and largest banks in the UK, Lloyds Bank has a history dating all the way back to 1765. It’s part of the financial services company, Lloyds Banking Group.

It’s a retail bank, serving both personal and business customers. Lloyds also offers private banking and international banking.

While it offers online and mobile banking like pretty much every major bank these days, Lloyds also has a network of over 1,000 high street branches¹ throughout the UK. Along with accounts, it also offers mortgages, loans, credit cards and wealth management services.

Now, onto HSBC. It’s another banking giant, part of one of the world's largest banking and financial services organisations.

HSBC UK offers both personal and business banking services, including everything from accounts and borrowing to investment and insurance. It has over 300 high street branches² dotted throughout the UK, and also offers both online and mobile banking.

Lloyds vs. HSBC - Accounts

Lloyds Bank offers a wide choice of current accounts, including:³

• Classic Account - a current account for free everyday banking, with an overdraft facility available if needed.
• Club Lloyds - an account with a monthly fee and extra rewards, including credit interest and an annual lifestyle benefit
• Silver - a perk-packed current account with a monthly fee, with benefits including European travel insurance, mobile insurance and breakdown cover.
• Club Lloyds Silver - an account package with a monthly fee, which combines all the best features of Club Lloyds and Silver
• Platinum - a step up from the Silver account, including benefits such as worldwide travel insurance, mobile insurance and breakdown cover, all for a monthly fee.
• Club Lloyds Platinum - with the highest monthly fee, this account includes all the best features of the Club Lloyds and Platinum accounts.

There are also dedicated accounts for young people and students. All accounts come with online and mobile banking, and a debit card as standard.

HSBC also offers a number of different current accounts for personal customers. For everyday banking, it has the following:⁴

• HSBC Bank Account - a straightforward current account featuring everything you’ll need for day-to-day banking.
• HSBC Basic Bank Account - a basic current account for people who don’t qualify for other products (e.g. due to a poor credit history).
• HSBC Bank Account Pay Monthly - a simple current account with an unarranged overdraft ‘buffer’ for short-term emergency borrowing.

But among HSBC’s most popular products are its premium accounts. These include:⁴

• HSBC Advance Account - a current account with extras, including retail offers and a boosted savings rate
• HSBC Premier Account - a premium account with a full suite of benefits, including exclusive rates on borrowing and savings, and worldwide travel insurance. You’ll need to have an income of £75,000+ to open this account.

HSBC also has dedicated accounts for students, international students, graduates and children.

Best of all, none of HSBC’s accounts have a monthly fee.

Lloyds vs. HSBC - Fees

Now we come to the important part - how much does it cost to have an account with Lloyds Bank or HSBC?

Let’s take a look at fees for opening and managing each account, along with charges for everyday services, such as using your debit card.

Monthly fees

Neither HSBC or Lloyds charges a fee to open or switch to an account. This is common in the UK.

HSBC doesn’t charge monthly fees for any of its accounts, but some of Lloyds premium accounts do come with a charge. Let’s take a look:³

Lloyds Bank account	Monthly fee
Classic	Free
Club Lloyds	£3 - waived if you pay in £2,000+ a month
Silver Account	£10
Platinum	£21
Club Lloyds Silver	£10 + £3 Club Lloyds fee (waived if you pay in £2,000+ a month)
Club Lloyds Platinum	£21 + £3 Club Lloyds fee (waived if you pay in £2,000+ a month)

Pricing and Fees correct as of 02-May-2023

Everyday banking fees

It’s not just the monthly fees you need to look at when comparing banks. It’s also smart to check out whether you’ll be charged for things like using your debit card and sending payments.

Here’s what you can expect to pay for everyday banking with both HSBC and Lloyds:

Transaction	Lloyds Bank (Classic)⁵	HSBC (standard Bank Account)⁶
Faster Payments within UK	No fee	No fee
CHAPS payment	£30	£17
ATM cash withdrawal (UK)	No fee (although some ATM operators may charge their own fee)	No fee (although some ATM operators may charge their own fee)
Debit card payments (UK)	No fee	No fee

Pricing/Fees correct as of 02-May-2023

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Lloyds vs. HSBC - International money transfer

If you want to use your new bank account to send money overseas, it’s very important to check the charges. This is especially important for people who travel a lot, have family in other countries or perhaps have bills to pay for an overseas holiday home.

Generally speaking, a bank is not usually the cheapest or quickest way to make an international transfer - or to spend overseas.

But let’s see how much it’ll cost with both Lloyds and HSBC, taking transfer fees and exchange rates into account.

Transfer fees

Lloyds Bank charges no fee for payments made in euros, but it’ll cost you a flat fee of £9.50 to make payments in any other currency. There may also be correspondent bank fees of between £12 and £20 depending where the transfer is heading to.⁵

To receive money from overseas, you’ll pay no fee if the payment comes from within the EEA and is in euros. For other currencies, it’s £2 to receive up to £100 from overseas, and £7 for amounts over £100.⁵

HSBC charges no fee for payments made in EUR to EEA countries. But if you’re sending in another currency or outside the EEA, you’ll pay £17 per payment. There may also be correspondent bank fees.⁶

Receiving an international payment into your HSBC bank account will cost a flat fee of £5, regardless of the amount.⁶

It’s not all about the transfer fee when sending money abroad. You also need to look closely at the exchange rate you’re offered, as it can make a big difference to the overall cost of the transaction. So even if there’s no upfront fee, a poor exchange rate can mean less of your money arrives at its destination.

To check whether you’re getting a good deal, look up the mid-market exchange rate for your chosen currency pair. This is what banks use to trade currency with each other, and it’s known as one of the fairest rates you can get.

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Both Lloyds Bank and HSBC are likely to add their own margin to the mid-market rate. This means you get a slightly worse rate for the currency conversion, and the transfer ends up costing you more.

Neither bank publishes its margin, as rates can change all the time. However, you can check the latest exchange rates for your transfer via online banking, contacting the bank or visiting its website.

A quick cost comparison

To help you get an idea of how fees and exchange rates contribute to the cost of your transfer, let’s run through a quick example.

Let’s imagine you want to send £500 from the UK to Australia. You could be sending money to a family member, putting down a deposit on a holiday home or buying something from an Aussie seller.

Here’s how much it’ll cost with Lloyds and HSBC, plus an international transfer specialist like Wise for comparison:

Provider	Transfer fee	Exchange rate	Recipient receives
Lloyds⁷	£9.50	1.81474	890.13 AUD
HSBC⁸	£5 + correspondent/receiving bank fees of £16.03	1.7997	862.01 AUD
Wise⁷	£4.39	1.86417 - mid-market rate	923.90 AUD

Exchange rate and fees, correct as of 02-May-2023

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Please see Terms of Use for your region or visit Wise Fees & Pricing for the most up to date pricing and fee information.

So as you can see, that exchange rate makes all the difference. With a better rate, providers like Wise are able to ensure that less of your money is lost in currency conversion.

Another thing to watch out for is correspondent or receiving bank fees, as you can see here with HSBC’s fees. It could add a chunk of extra charges to the overall cost.

Wise: a cost-saving alternative for managing your money internationally

As we’ve seen from the example above, banks aren’t always the best option for sending money internationally.

This is partly because they use the SWIFT network to get your money across borders. This can be slow, and involve multiple banks - some or all of which may apply their own extra fee.

Luckily, there’s a different way to do things, without the need to involve multiple banks.

If sending and receiving international payments is something you’ll really need, check out Wise. You can send money worldwide with Wise for low, transparent fees. Best of all, you’ll always get the mid-market exchange rate with no costly margins on top. And never any hidden fees.

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Wise makes it fast, convenient and affordable to manage your money internationally. It’s ideal for travelling too, as there’s even a Wise card you can take with you and spend like a local wherever they accept card!

_Please see the Terms of Use for your region or visit Wise fees & pricing for the most up-to-date information on pricing and fees.

Lloyds vs. HSBC - Cards

All current accounts with both Lloyds Bank and HSBC come with a contactless debit card as standard. They both use Visa cards.

Lloyds Bank offers an extra perk with its debit cards, which is 15% cashback when you sign up with its Everyday Offers program and spend with selected retailers.⁹

HSBC has a similar offer, in the form of its "Home&Away" rewards programme. This gives HSBC cardholders access to discounts and offers on shopping, travel, dining, experiences and more.¹⁰

Using your debit card overseas - withdrawal fees and limits

Both Lloyds Bank or HSBC allow you to use your debit card in countries outside the UK. You can use your card to make purchases, and to withdraw cash from ATMs.

It’s usually fee-free to use your debit card in the UK, but charges apply overseas. There may also be limits to how much you can spend or withdraw, per day or month. And as with all debit cards, ATM owners may charge their own fees for any transaction.

Here are some of the key fees you need to know about for holiday spending with both Lloyds and HSBC:

Provider	Overseas ATM fee	Daily withdrawal limit	Overseas card purchases fee
Lloyds Bank	£1.50 + 2.99% foreign currency transaction fee⁵	£500 per day¹¹	£0.50 + 2.99% foreign currency transaction fee⁵
HSBC	2.75% + 2% cash fee⁶	£300 - HSBC Bank Account £500 - HSBC Advance £1000 - HSBC Premier¹²	2.75%⁶

If you’d rather swerve the fees, and get a better exchange rate at the same time, consider taking the Wise card with you on your travels. It automatically converts your money to the local currency at the mid-market exchange rate, for just a small conversion fee. Or if you already have the currency in your Wise account, it’s free.

Lloyds vs. HSBC - Security

Lastly, we come to security - how safe is your money with Lloyds Bank and HSBC? The first thing to know is that both are fully regulated and licensed UK banks.

Both also offer up to £85,000 protection under the Financial Services Compensation Scheme (FSCS). This ensures that even if either bank goes under, your money will still be protected up to this threshold.

Lloyds offers all the high-level security features you’d expect of one of the UK’s biggest banks. This includes built-in security in the Lloyds Bank mobile app, a solid Fraud Guarantee and secure biometric account access.

HSBC also takes advanced steps to protect you and your money. It has a Digital Security Promise, which pledges to:¹³

• Check for unusual activity on your account 24/7
• Refund any money stolen by fraudsters
• Offer fraud prevention advice, tips and tools.

So which is better - Lloyds or HSBC?

It all depends what you’re looking for in a bank and account, but Lloyds and HSBC have a pretty similar offer.

Both offer online and mobile banking, a wide choice of accounts (including some with rewards and extra benefits) and robust security and protection for your money.

You’ll find both banks a little pricey for spending and withdrawing cash abroad. So if this is a service you need, make sure to check out Wise. With low fees and fair exchange rates, it could save you a bundle on international transfers and holiday spending.

Hopefully after reading this guide, you’ll have all the info you need to compare the two - and other providers - and find the right bank for you.

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Sources used:

1. Lloyds Banking Group - Who We Are
2. HSBC About - HSBC UK announces branch network plans for 2023
3. Lloyds Bank - Current Accounts
4. HSBC - Current Accounts
5. Lloyds Bank - Classic Account fee information document
6. HSBC - Fee information document
7. Wise - Send Money
8. Monito - Compare Transfer
9. Lloyds Bank - Classic Account
10. HSBC - home&Away
11. Lloyds Bank - Personal banking terms and conditions
12. HSBC - Help - Using your card
13. HSBC - Digital Security Promise

Sources last checked on date: 02-May-2023