Huge bank with 2million customers to make big change to popular bank account in weeks
A MAJOR online-only bank with millions of customers is making a big change to a popular account in weeks.
Chase is dropping the interest rate on its easy-access Chase Saver account from February 19.
The savings account’s interest rate tracks the Bank of England’s (BoE) base rate – the rate charged to the major banks.
The Chase Saver interest rate sits 1.25% below the base rate, which is currently at 4.75%.
However, from February 19, the interest rate will track 1.5% below the base rate instead – a 0.25 percentage point change.
It means savers will see their interest rate go down from 3.5% to 3.25%, as it stands.
Someone with £1,000 in the account would get £2.71 in interest each month, rather than £2.92, if the Annual Equivalent Rate (AER) were to stay at 3.25%.
Of course, if the base rate goes up or down, the interest rate on the Chase Saver account will mirror this.
Markets are expecting the base rate to reach 4% by the end of the year, in which case the interest rate on Saver account would drop to 2.5%.
Chase said a note was sent to customers with a Saver account in December informing them of the change to the interest rate.
Chase is offering a 1.5% boost on the easy-access Savers account to new customers, but for six months only, and if you sign up within 31 days of opening the account.
It means a new customer signing up for one of the accounts after February 19 would get an interest rate of 4.75%.
You can sign up for one of the accounts via the Chase app which is downloadable in the Apple App Store or via Google Play.
Savers looking for a better deal after Chase lowers the interest rate on its Saver account could switch.
According to Moneyfactscompare.co.uk, GB Bank via savings platform NuWealth is currently offering an easy-access savings account which pays 4.86% interest, and pays out daily.
You’ll need to add a minimum of £500 into the account though and the interest rate drops to 4.4% after 12 months.
The best easy-access cash ISA from Plum is 5.01%, and any savings you earn are protected from tax.
How to get the best savings rate
The best type of savings account for you depends on your circumstances.
For example, with cash ISAs, you can only deposit up to £20,000 in a tax year, but you can add more to a standard savings account.
However, the advantage of a cash ISA is that you aren’t taxed on any earnings.
A standard savings account will see you taxed on interest earned above your Personal Savings Allowance (PSA).
This is either £0, £500 or £1,000 depending on your income tax band.
Easy-access accounts are useful if you’re looking to dip into your savings on a regular basis.
Some let you withdraw cash an unlimited amount while others give you a set amount of withdrawals before you are charged.
Fixed rate savings accounts, also known as fixed term bonds, offer you a fixed rate of interest over a set period of time.
They usually offer better rates than easy-access savings accounts but in most cases penalise you for each withdrawal made.
If you’re thinking about opening a savings account, it’s worth comparing the best ones on a comparison website.
Some worth trying include moneyfactscompare.co.uk, comparethemarket.com or moneysavingexpert.com.
SAVING ACCOUNT TYPES
There are four types of savings accounts fixed, notice, easy-access, and regular savers.
Separately, there are ISAs or individual savings accounts which allow individuals to save up to £20,000 a year tax-free.
But we’ve rounded up the main types of conventional savings accounts below.
FIXED-RATE
A fixed-rate savings account or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term.
This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account.
Some providers give the option to withdraw, but it comes with a hefty fee.
NOTICE
Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash.
These accounts don’t lock your cash away for as long as a typical fixed bond account.
You’ll need to give advance notice to your bank – up to 180 days in some cases – before you can make a withdrawal or you’ll lose the interest.
EASY-ACCESS
An easy-access account does what it says on the tin and usually allows unlimited cash withdrawals.
These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee.
REGULAR SAVER
These accounts pay some of the best returns as long as you pay in a set amount each month.
You’ll usually need to hold a current account with providers to access the best rates.
However, if you have a lot of money to save, these accounts often come with monthly deposit limits.
What will happen to savings rates in 2025?
Savings rates usually go up and down based on the BoE’s base rate, which currently sits at 4.75%.
The base rate is decided by the Monetary Policy Committee (MPC), which is made up of nine members.
The MPC will next meet on February 6.
If the base rate falls, it spells bad news for savers who see the interest rates on their savings account drop.
However, it is usually good news for those looking for a mortgage as it leads to rates on these dropping.
It’s worth bearing in mind, if you’ve got a savings account, the interest rate won’t drop if it’s a fixed bond.
These stay at the same rate they were when they were opened.
In other news, Nationwide is slashing rates on 90 savings accounts from February 1.
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