Best savings accounts: Chip ‘scoops top spot’ with interest rate on easy access saver | Personal Finance | Finance
Demand for easy access savings accounts has been gradually increasing over the past few months, as living cost pressures have left many needing to dip into savings to get by. These accounts are generally more flexible with withdrawals, and Chip’s saver is now offering a much more competitive rate of return.
Chip, which is an investment and savings app that was founded in late 2017, enables people to connect their current accounts through open banking.
The app, which is powered by Clearbank, has a number of different savings accounts to choose from and has amassed over 500,000 users since its launch. Money deposited is also protected by FSCS.
Instant Access savers can now, however, benefit from an increased gross interest rate of 3.35 percent, with an Annual Equivalent Rate (AER) of 3.4 percent.
Commenting on the deal, Eleanor Williams, finance expert at Moneyfactscompare.co.uk, said: “This week Chip increased the rate on its Instant Access powered by ClearBank product by 0.24 percent.
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“Now paying 3.35 percent gross, this account scoops the top spot in our tables when compared to other easy access accounts currently available, and takes a place within the top 10 when compared to accounts which pay monthly interest on offer at the moment.”
Ms Williams said that savers who are looking for a flexible account which allows both withdrawals and further additions to be made without restriction “may well be tempted” by this, as may those looking to “boost” their regular income due to the monthly interest rate.
However, she continued: “Savers do need to be aware that they need to hold a Chip subscription, for which both free and paid options are available.
“Overall, this earns an Excellent Moneyfacts product rating and prominent positions across a couple of our top tables.”
The account can be opened with a minimum of £1 and up to £250,000 can be invested overall.
Withdrawals are permitted without penalty and as it’s an app-based account, savers must be comfortable opening and managing it online via mobile.
But while Chip may be topping the tables, competition doesn’t fall too far behind.
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Falling just behind is HSBC’s Online Bonus Saver with an AER of 3.25 percent.
Interest is calculated daily and applied to the balance monthly. The 3.25 percent rate is awarded on up to £10,000 of the balance every month a withdrawal is not made, while 1.75 percent will apply to figures over £10,000.
While this is an easy access account, meaning savings can be withdrawn, it isn’t flexible and on the occasion that a withdrawal is made, a 1.2 percent standard rate will be applied to that month instead.
