RBC’s takeover of HSBC: What will happen to HSBC Canada customers?

Although the transition will be largely managed internally by RBC, current HSBC customers might have questions about what’s coming up in the next two months. In this article, we’ll walk you through what to expect. 

What will happen to HSBC Canada customers? 

During the transition, most changes will be automatic, so HSBC customers can continue to bank as they normally would. Customers should look in the mail for a product and services guide, called Welcome to RBC, and keep it around during the transition as it contains reference information and links. Below we’ve outlined what is expected to happen with HSBC accounts, loans and investments. 

Personal banking

What’s happening: RBC will identify suitable bank accounts for HSBC customers based on the features of their current accounts and will send new RBC debit cards in the mail. Customers without an HSBC chequing or savings account will receive an RBC client card number. Expect to receive your cards or client card number by the end of February 2024. 

What to do: Continue to use your HSBC card until the transition to RBC is complete. In the meantime, use your new RBC card or client number to enroll in RBC online banking or the RBC app. You can activate your debit card online. This will ensure that you have access to your RBC accounts once the transition is complete.

Note: Your historical account information will migrate to RBC but you can also download it from HSBC to have it on hand. For more information, refer to Section 2 of your welcome package.

Credit cards 

What’s happening: As with your personal bank accounts, RBC will identify which RBC credit cards to offer you based on the features of your current HSBC credit cards, and the bank will mail them to you by the end of March 2024. Your personal credit limits and balances will be the same as they were with HSBC. Any insurance coverages and services you had through HSBC, however, will come to an end and be replaced with those offered by RBC, if applicable. 

What to do: Activate your credit cards online right away, but also carry your HSBC cards until your RBC cards are ready to use. Find out more about credit cards in Section 5 of the welcome guide or by visiting RBC’s website. 

Mortgages and other loans

What’s happening: All HSBC lending products, including lines of credit, loans and mortgages will migrate to RBC at the end of March 2024. The terms of your mortgage agreement, including the interest rate, term, payment amount and frequency, amortization, portability and pre-payment privileges will remain the same until your current term ends. 

What to do: If you’re a current HSBC mortgage client, you don’t need to do anything ahead of the closing date. If you wish to move your mortgage to a different lender before your term ends, you are free to do so. Be aware that you may have to pay a mortgage penalty for refinancing.

If you have creditor insurance on your mortgage, there are at least two changes you’ll want to be aware of. First, your premium will be based on your age and balance as of the date your mortgage moves to RBC. This could result in higher premiums. Second, you’ll pay your insurance as part of your monthly mortgage payment, not as a separate bill.  

For loans and lines of credit, there are some changes to the terms and rates. For example, the rate on your line of credit will be based on RBC’s prime rate and not HSBC’s. For more information, refer to Section 3 of the welcome guide.

Investments 

What’s happening: If you hold investments with HSBC you can expect them to be migrated to RBC by the end of March 2024. Note that the investments will still be covered by Canada Deposit Insurance Corporation (CIDC) and the Canadian Investment Protection Fund (CIPF). 

What to do: If you wish to keep your investments with RBC, you don’t have to do anything. Your investments are set up to migrate from HSBC businesses to RBC businesses automatically, and RBC plans to preserve your relationships with your existing advisors. For example, investments held with HSBC Investment Funds Canada will roll over to Royal Mutual Funds or RBC Dominion Securities, and investments with HSBC InvestDirect will migrate to RBC Direct Investing. You can view RBC’s investment entities in Section 4 of the welcome guide.

Tips for managing the transition from HSBC to RBC

As you can see, most changes for HSBC customers will take place automatically. That said, there are some things you can do to ensure the process goes smoothly. 

• Log into your HSBC profile to make sure all your personal information is current and correct. Double check your mailing address, email address and phone number. 
• As soon as you receive your RBC client card or number, register for digital banking. 
• Keep an eye out for any communication materials from HSBC and RBC over the coming months and ensure you complete any required documentation.
• Watch out for fraud and scams. While you can expect to get mail from one or both banks, neither will contact you for personal information such as passwords or usernames by email, phone or text, unless you contact them first.

Should you switch banks instead? 

Even though current HSBC customers are being enrolled with RBC automatically, you can always use this as an opportunity to re-evaluate your banking needs. You may stay with what you have or pick a new institution entirely. 

All parties involved in the deal hope customers will stick with HSBC until the migration is complete. In fact, RBC is mandated to use “all reasonable best efforts” to service and retain all current HSBC clients, according to the acquisition terms imposed by minister Freeland. 

However, the Financial Consumer Agency of Canada (FCAC) recommends that Canadians regularly review their banking products and services to ensure they continue to meet their needs. Now may be a good time to switch to another institution, rather than wait until you are fully onboarded with RBC. 

You don’t need to hold all your financial products with a single bank, either. For example, you might find the best options for your chequing account, credit cards, mortgage and investments (like guaranteed investment certificates (GICs) and exchange-traded funds (ETFs) at a few different institutions. 

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How to switch banks

If you decide you don’t want to migrate to RBC, here are the steps you need to take.

Chequing and savings accounts

If you want to close your everyday bank accounts it’s probably a good idea to visit a branch. You don’t need to wait until after the migration, but you can if you want to test out RBC’s offerings. RBC says it will allow you to cancel your accounts without penalty within three months after the transition. 

Opening a chequing or savings account with a new bank is simple and can even be done online.

Credit cards 

As with chequing and savings accounts, you can close a credit card account at any time assuming you don’t owe a balance. One thing to keep in mind is that sometimes it’s better for your credit score to hang onto an existing credit card rather than close the account.  

If you want to get a new credit card, you’ll have to go through the application process, which can usually be done online.

Mortgages and other loans

As an HSBC customer, the terms of your mortgage will be honoured until it matures. If you make a change before that time, you might incur extra fees or charges. Loans and lines of credit are subject to different terms and fees, so it’s recommended that you speak with an advisor at the bank. 

Investments

If you’re thinking about moving your investments, you’ll want to do this sooner rather than later. Due to the transition, RBC is currently waiving transfer fees for a limited time. Once you select your new firm, you can initiate the transfer through your chosen institution.

RBC and HSBC: What comes next? 

For those who are content to hold their financial products and services with RBC, the bank’s takeover of HSBC is pretty much a non-issue. Provided all goes according to plan, the burden on individual customers promises to be minimal. In any case, now is as good a time as any for all Canadians to review their banking needs to ensure they’re getting the best possible service.

Read more personal finance news:

• How much credit card debt does the average Canadian have?
• Is Canada in a recession?—and other questions about the economy, answered
• How new pay transparency and AI hiring rules will impact Canadian workers
• Fewer banking fees, help for mortgage holders—here’s what new rules could mean for Canadians

About Keph Senett

Keph Senett writes about personal finance through a community-building lens. She seeks to make clear and actionable knowledge available to everyone.