Chip offers ‘excellent’ interest rate on easy access savings account

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Easy access savings accounts have recently been growing in demand as cost of living pressures have left many needing increasing and instant access to savings. These accounts are typically more flexible with withdrawals, and Chip’s saver is now offering a much more competitive rate of return.

Founded in late 2017, Chip is an investment and savings app that people can connect their current account to through Open Banking.

Offering a number of different savings accounts, the app, which is powered by Clearbank, has amassed over 500,000 users since its launch and money deposited is protected by FSCS.

Instant Access savers can now, however, benefit from an increased gross interest rate of 3.01 percent, with an Annual Equivalent Rate of 3.05 percent, through the app.

Commenting on the deal, Eleanor Williams, finance expert at Moneyfacts, said: “Savers who want to be able to maintain access to their savings pot and want an account which enables both withdrawals and further additions may be tempted by the Chip Instant Access powered by ClearBank product.

“Chip has removed the three percent bonus return and increased the interest rate from 0.00 percent to now pay 3.01 percent gross.

“This mobile-operated account now takes a prominent position in our top tables compared to other easy access accounts currently available.

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“Investors have the choice between holding a fee-free Chip subscription or paying a £4.99 fee per 28-day subscription. Overall, this account earns an Excellent Moneyfacts product rating.”

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 is offering much more lucrative returns, it still doesn’t exceed the current market-leading easy access rate.

According to Moneyfacts Best Buys, topping the leaderboard is Yorkshire Building Society’s Rainy Day Account (Issue 2) with an AER of 3.35 percent.

This account offers a competitive, two-tiered variable interest rate and savers can get started with as little as £1. The 3.35 percent rate is applied to balances up to £5,000, while a 2.85 percent rate is applied to balances over £5,000.01.

Withdrawals are permitted on two days per year based on the anniversary of account opening, plus closure at any time.

Falling just behind is Paragon Bank’s Triple Access Account (Issue 11) with an AER of 3.10 percent.

The account can be opened with £1, interest is paid on the anniversary, and up to three withdrawals are permitted without facing a penalty.

If four or more withdrawals take place, interest will drop to 0.75 percent until the day before the anniversary of the account holder’s opening deposit.

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