As of midday today, the digital challenger upped the interest rate on its Instant Access Account from 3.15% AER to a market-leading 3.4% AER (variable) for balances of between £1 and £250,000. The interest is paid monthly.

It comes just a couple of weeks after its last rise from 3.05% AER, and follows its change from paying a bonus to interest meaning cash compounds and is protected by the Financial Services Compensation Scheme up to £85,000.

The fintech firm – with half a million app users – aims to follow the Bank of England’s base rate, and said it rewards customers faster than traditional banking giants, while it also pays more than the annual 1% offered by these high street lenders.

New savers can download the Chip app from the App Store or Google Play Store, or by scanning the QR code from the Chip website. You can start saving with a minimum of £1 to £250,000 in the Chip Instant Access Account.

There has been fierce competition in the instant access product category, with HSBC yesterday launching a 3.25% AER rate on its Online Bonus Saver for existing current account and savings customers.

This pipped Zopa to the top spot, with its offering of 3.21% AER on its Smart Saver (£1 minimum).

Other digital challengers have also crowded the top tables, including Tandem with its Instant Access Saver offering 3.2% AER. It pays an underlying rate of 2.85% which can be topped up by 0.35% when savers apply the rate in the app.