Fantastic news for savers as ‘market-leading’ savings account is launched
Finance: Expert on impact of inflation on savings accounts
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
Savers have had a tough time recently, particularly due to the Bank of England’s base rate decision in March 2020. When the central bank decided to lower its rate to 0.1 percent, this had an impact on high street providers and their offerings. With a limited choice, many were disheartened to find little opportunity to grow their cash. For those with specific savings goals, this was particularly frustrating to witness. But as interest rates slowly recover from the pandemic, one increasingly popular provider has now launched a new “market-leading” easy access account, offering a better rate and additional benefits.
Chip, the digital savings app, has announced its new account, offering 0.70 percent interest, alongside Financial Services Compensation Scheme (FSCS) protection. This, it states, has placed the new account at the very top of the savings tables at present.
Interest on this account accrues and compounds daily, with Chip users able to view the progress directly in the app on their smartphone. As the account is easy access, savers can also withdraw their money whenever and wherever they like without a penalty.
To provide access to this favourable interest rate, Chip has partnered with Flagstone, a cash deposit platform. This combines the savers’ money into a trust account. All Chip savers, therefore, will be able to benefit from some of the advantages normally only available to Flagstone clients.
The account is powered by Allica Bank, which is UK-based and works with British small to medium enterprises. FSCS protection means all deposits up to £85,000 are safe should the worst happen and a provider goes bust.
But Chip has explained that to ensure as many users as possible are able to take advantage of this account, total deposits per person will initially be capped. This cap is to be set at £30,000, which still gives savers some room to grow a substantial amount of cash.
For those who have heard of Chip before, the provider became particularly popular for its +1 account which saw an interest rate of 1.25 percent available to users who were recommended to sign up.
However, to “make room for new top-table savings accounts”, the provider recently closed the Chip+1 account’s bonus to new users. While the provider acknowledged the option had been popular over the last six months, it has decided to stop making it publicly available.
The provider added: “In preparation for some new accounts new users can no longer access Chip+1 from September 1. Existing users will still be able to use the account as normal and get the market’s best return. Just to confirm, existing users don’t need to do anything, your Chip+1 is not changing.”
State pension warning: 1.5million Britons miss out on free TV licence [INSIGHT]
National Insurance: Boris Johnson warned hike could create ‘backlash’ [UPDATE]
PIP: Britons living with joint pain could get up to £608 per month [EXPLAINED]
The new savings account offered by Chip could therefore inject fresh optimism into the provider, and those who have not been able to use it in the past can still benefit from a solid interest rate.
Simon Rabin, CEO of Chip, commented on the new account, and said: “I’ll never tire of saying that at Chip, our mission is to build the best savings app in the world. Granted, it’s a hell of a goal, but in the last 12 months alone we crossed the half a billion pound mark for the amount saved for our users, started working with the world’s largest asset manager, launched investments, built ChipX and now we have negotiated the best easy-access interest rate on the market for our savers.
“We have even more exciting savings accounts on the way. In fact, we are in the process of negotiating with a few banks right now.
“We’ll continue on working hard to bring our users the best savings rates and put market-leading returns in the palms of their hands – just as the world’s best savings app should.”
But many savers may be curious as to how Chip is able to offer competitive interest rates, despite it being perhaps a less familiar provider to people right across the country. Thankfully, it offered some insight on the matter via its website.
It states: “We pool our savers money together and negotiate with banks like you’re all millionaires.
“Whether you have £1 or £100,000 you’re getting the millionaire treatment. What’s more, you don’t need to fill out any long boring forms, just open Chip and deposit in a few taps.”
Easy access accounts are favoured by many Britons who want the instant ability to be able to withdraw money as and when they need to. However, understandably, it is these types of accounts which have been most palpably affected within the last 18 months.
What is happening where you live? Find out by adding your postcode or visit InYourArea
Savers may benefit from locking their cash away for a certain amount of time if they hope to receive a decent interest rate. This may not suit everyone, though, and it is good that there are some solid options on the table for instant access accounts.
Britons are generally encouraged to have at least three to six months of expenses put aside to save into an easy access savings account. This can be essential to cover emergencies or any unexpected costs which may arise in a person’s day-to-day life.
However, after this point, individuals should consider exploring other options, particularly in the current climate.
Some suggest investment, which can create better returns. But Britons should be aware this comes with a certain amount of risk – and they could get back less than they originally put in.
Source: Read Full Article