Chase Bank has announced that it is eliminating its 1 percent checking account interest feature and changing it to a 1 percent easy-access interest boost.
Starting today, JPMorgan-backed Chase will add a 1 percent bonus rate to its 4.1 percent easy access account, putting it at a 5.1 percent best buy.
But at the same time, it announced that it will stop paying all its customers 1 percent interest on their checking account balance starting August 5.
Chase said this was so it could “continue to offer customers the products and features that best fit their needs.”
Chase will stop paying customers 1% interest on checking account balances and has instead introduced a 1% easy access bonus.
The new easy access rate is available to new Chase customers who joined after May 2, 2024 and some eligible existing customers.
Existing customers who did not have a savings account open as of 2 May or who had a balance of less than £50,000 in savings accounts as of 2 May 2024 will be able to open the easy access account.
The 1 percent bonus will increase customers’ easy access rate to 5.1 percent and the bonus will be in effect until January 16, 2025.
This propels it to the top spot for an easy-to-access deal, as the next best deal on This is Money’s best buy tables pays 5.02 percent.
Chase’s underlying rate of 4.1 percent is variable and could change before Jan. 16, 2025. But the 1 percent increase is fixed, so even if Chase’s rate changes before Jan. 16, 2025, customers will still earn 1 percent on top of whatever. the new rate is if it changes.
Savers can deposit up to £1 million into the easy-access account, although only £85,000 is protected by the Financial Services Compensation Scheme (FSCS).
Savers can access their savings as often as they want without facing withdrawal penalties, interest or fees.
Chase is completely app-based, so all documentation when opening an account is verified through the app. The American giant launched in Great Britain in 2021.
What is behind the measure?
Chase now has millions of customers and this is a clear move to attract larger savings balances.
James Blower, founder of the Savings Guru website, said: “Overall, it seems like a move designed to improve Chase’s returns.
‘The 1 per cent bonus on savings is time-limited and is added to an underlying savings rate linked to a base rate.
“This means it’s a cost-effective way to potentially attract additional savings balances now, but pay them a lower rate when the bond expires, knowing that, with the base rate tied to the underlying rate, there’s no risk that Chase will be left with many balances that are paying more interest than you can earn with them.
While MoneyComms’ Andrew Hagger said the decision to swap interest on credit for an increase in the savings rate could be because paying 1 per cent interest on all customers’ current accounts is proving too expensive.
He said: “It could be that paying 1 percent on total checking account credit balances has now become too much of a burden for Chase, hence the change in direction.”
“Unfortunately, this takes the shine off a disruptive ‘challenger’ and turns them into something very much like the big banks that also pay zero interest on checking account balances.”
James Blower added: ‘Chase could be repositioning itself for the expected base rate cuts being forecast.
“Paying credit interest on current accounts will be less profitable for them in a falling interest rate environment, so eliminating it seems like a sensible move for them, but it’s not so good for customers.”
Shaun Port, chief savings officer at Chase UK, said: “We want to help customers make their money work harder while offering them a simple and straightforward way to save.”
“By introducing a bonus offer on our easy-access savings, new and existing customers can now earn an extra 1 percent on their savings with Chase through January 16, 2025, further helping them reach their goals saving”.
How does it compare to other easy access offerings?
If you joined Chase before May 2, 2024 or have a balance of more than £50,000 in savings accounts as of May 2, 2024, there are other good, easy-to-access offers you can get.
The next best deal is Oxbury Bank’s easy access account, which pays 5.02 per cent.
Savers must deposit a minimum of £20,000 into the Oxbury account to open the account.
This is a limited time offer and therefore could be removed from the market at any time. To open the account, savers must download the Oxbury Bank app.
Meanwhile, Monument Bank is offering 5.01 per cent on its easy access deal. Savers must deposit at least £25,000 to open this account.
This account can only be opened by downloading the Monument Bank app.
Chase said a saver who deposited £5,000 into its easy access account today would earn £125.91 in interest over six months, even if everything remains the same and the interest rate does not change.
James Blower said: “While getting rid of credit interest makes the account less attractive to savers, with the 1 per cent cashback and 5 per cent rounding off, it is still a decent account if used in full.” .
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