When we reviewed the Chase bank current account at last autumn, it stood out amongst its digital banking peers (Starling and Monzo) for its generous 1.5% easy access savings account.
Back then the Bank of England base rate was just 0.25%. Record inflation has seen that rise to 2.25%, but Chase has been slow to pass on the new rate to customers.
Its tardiness in increasing interest rates on savings had seen some customers look towards higher paying accounts such as Nationwide’s limited access saver at 2.1% or Santander’s instant access saver (only available until 19th November) at 2.75%.
Today Chase announced it will increase the rate on its saving account to 2.1% AER (2.08% gross) from 24 October.
Interest on the account is paid monthly, and this new higher rate will automatically be applied to both new and existing customer accounts.
Managing director of everyday banking, Shaun Port said: “We’re increasing the rate on our saver account to help new and existing customers make their money work harder, in what we know is a challenging time for everyone.”
Current savers can do better
When Chase launched its UK current account in 2021, it offered market leading rewards including 1% cash back, 5% interest on rounded up savings, and the 1.5% easy access saver. What’s interesting about this latest announcement is that the increase to 2.1% isn’t market leading at all.
In fact, with the UK base rate expected to reach 5% by this time next year, this announcement by Chase falls short of the headline grabbing rewards that saw it grow to over a million customers in its first 12 months.
Chase now holds more than £10bn in customer deposits, but could face growing competition for savings from traditional banks and building societies as interest rates increase. For existing customers it’s a welcome boost, but with the market heating up, it’s far from the only game in town.