Martin Lewis offers advice on savings and interest rates
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Savings account interest rates have been dire recently, creating difficulties for people hoping to increase their finances. The Bank of England’s recent decision to keep its base rate at 0.1 percent – which it has been held at since March 2020 – is not likely to create a great deal of optimism. Indeed, as the UK economy slowly gets to its feet again following the adverse impacts of COVID-19, it may be a long time before rates return to healthy levels observed before the pandemic.
Regardless of this, there are some providers who are still holding out with attractive options.
One such choice is being offered by Chip, a smartphone banking app which is perhaps less familiar to Britons.
Nonetheless, the reputable provider is offering a 1.25 percent interest rate through its Chip+1 account.
Offering one of the top returns at present, individuals will be able to earn this interest rate on an easy access basis.
This means people will be able to access their cash at any point, providing the flexibility which many need.
The interest rate is applicable on savings up to £10,000 – with fees applying – or up to £2,000 on the app’s free version.
Chip has explained there is currently no limit on the 1.25 percent bonus, which means savers are not particularly pressed for time if they wish to secure this offer.
However, as with any savings account, the provider can change the rate at their discretion, so some may wish to act promptly to ensure they get this deal.
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Some may wonder how Chip is able to offer such an attractive interest rate, particularly in the current climate.
Thankfully, the provider has offered further details to help curious savers.
Its website explains: “Why/how are we doing this? We’re simply giving our advertising budget directly to our savers in recommending Chip to their friends.
“We think you deserve it more than Facebook and Google do.”
The Chip+1 account, however, works slightly differently, meaning Britons can only access this if they are invited to do so by a friend.
An existing Chip customer must share a VIP code with a friend who doesn’t yet have the banking app so both can benefit.
The fact this account is different to others means Britons are generally encouraged to undertake research to see if this will work for them.
All money a person deposits into their Chip account is protected by the Financial Services Compensation Scheme (FSCS).
The FSCS means that should the worst happen, a person’s savings are protected up to £85,000.
In the event a regulated financial business is unable to pay for claims against them, the FSCS will step in to pay the compensation.
Under Chip’s association with the scheme, all money deposited is held in a segregated trust account with UK authorised bank ClearBank.
This means savers know their money is in safe hands and do not have to worry, as this is a valuable safety net.
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