Chip launches the best buy, easy-to-access savings account as rivals cut interest rates
- Most savings providers have reduced interest rates after the Bank of England’s cuts
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Savers can choose from another top-paying, easy-to-access account, as app Chip has increased its rate in a surprising move today.
It has run out of fare Easy access* from 4.72 to 4.85 percent.
On a deposit of £10,000, someone could earn £485 in interest over a twelve-month period, albeit if the interest rate remains unchanged.
This surprising move by Chip goes quite against the grain. Most savings providers have chosen to cut interest rates in recent months, following two cuts by the Bank of England last year – first in August and then in November.
Today’s change positions Chip as the second-highest paying, easy-to-access rate on the market, comparable to Atomic bankwho also pays 4.85 percent.
It is just behind another app-based provider, NuRijkwhich is offering a deal where 4.86 percent is paid through GB Bank.
Any money paid into Chip’s deal will be held by ClearBank and will be eligible for Financial Services Compensation Scheme protection of up to £85,000 per person.
This FSCS protection means that savers’ money up to £85,000 per person is protected if the company goes bust.
However, as with many of today’s best savings deals, Chips*bumper offer comes with a catch.
For starters, the 4.85 percent rate is backed by a 1.03 percent bonus rate for the first twelve months; after that, the rate will drop to 3.82 percent.
Savers will also need to be careful if they plan to regularly withdraw or withdraw their savings. If someone makes four or more withdrawals within 12 months, their rate is reduced to 3.75 percent.
Atom Bank has a similar catch Direct savings reward. Anyone who doesn’t withdraw earns 4.85 percent, but if you withdraw once, the rate drops to 3.25 percent for that particular month.
NuWealths GB Bank Easy access The deal comes with a 0.46 percent bonus over twelve months, to take it to 4.86 percent.
However, the bonus is only available on balances up to £25,000, although it does allow unlimited and free withdrawals, unlike Chip and Atom Bank.
All three providers offer FSCS protection.
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Affiliate links: If you purchase a product, This is Money may earn a commission. These deals have been chosen by our editors because we believe they are worth highlighting. This does not affect our editorial independence. *Chase: Cashback available for the first year. Exceptions apply. 18+, UK residents.