Chip launches easy-access savings account Best Buy as rivals cut rates

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Savers have another easy-access, premium-paying account to choose from as app Chip has increased its fee in a surprise move today.

The rate has increased in your Easy Access Savings* from 4.72 to 4.85 percent.

On a £10,000 deposit that could allow someone to earn £485 in interest over a 12-month period, even if the rate remains unchanged.

This surprise move by Chip goes quite against the grain. Most savings providers have opted to cut rates in recent months following two cuts by the Bank of England last year: first in August and then in November.

Today’s change positions Chip as the second best-paying easy access rate on the market, on par with Atom bankwhich also pays 4.85 percent.

It sits right behind other app-based provider, NuWealthwhich is offering a deal paying 4.86 percent through GB Bank.

All money deposited into the Chip deal is held by ClearBank and is eligible for Financial Services Compensation Scheme protection of up to £85,000 per person.

This FSCS protection means savers’ cash is protected up to £85,000 per person if the company goes bankrupt.

However, as with many of the best savings deals to shop right now, French fries*The excellent offer has a drawback.

For starters, the 4.85 percent rate is backed by a bonus rate of 1.03 percent for the first 12 months; then the rate will fall to 3.82 percent.

Savers will also need to tread carefully if they intend to use their savings on a regular basis. If someone makes four or more withdrawals within a 12-month period, they will see their rate drop to 3.75 percent.

Atom Bank has a similar problem on its Instant Savings Reward. Anyone who doesn’t withdraw earns 4.85 percent, but makes a withdrawal and the rate drops to 3.25 percent for that given month.

NuWealth’s Easy access to GB Bank The deal comes with a 12-month bonus of 0.46 percent to take it to 4.86 percent.

The bonus, however, is only available on balances up to £25,000, although it allows unlimited withdrawals and no fees, unlike Chip and Atom Bank.

All three providers offer FSCS protection.