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How to earn 5% on your savings – but watch out for the small print

How to earn 5% on your savings – but watch out for the small print
Emma Lunn
Written By:
Posted:
20/12/2024
Updated:
20/12/2024

Chase Bank has launched a best buy easy-access account with a bonus rate that brings the interest rate to 5%.

The bonus rate is available to new customers who have opened a Chase Saver account with the online bank since 9 December.

The account has an underlying interest rate of 3.5%, which a 1.5% bonus brings up to 5%.

Savers need a Chase current account to be eligible for the Chase Saver and they must open the easy-access savings account within 31 days of opening their current account to get the 1.5% bonus rate.

Small print clause means rate is set to fall

Chase’s easy-access rate is linked to the Bank of England’s base rate, which the Monetary Policy Committee (MPC) voted to keep at 4.75% this week. If the base rate falls, so too does the rate Chase pays customers.

However, small print on the account notes that the underlying rate is set to fall in fewer than two months’ time, even if the base rate stays the same.

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The Chase Saver currently has an interest rate that tracks 1.25% below the Bank of England base rate, meaning the underlying rate is currently 3.5%. But from 19 February 2025, the underlying rate will fall to 1.5% below the base rate.

Assuming the base rate remains at 4.75%, this means the underlying rate will fall to 3.25%, and the 1.5% bonus will mean eligible savers are paid 4.75%.

However, the 1.5% boost is fixed for six months – so even when the underlying rate changes during that time, savers will keep earning 1.5% on top for six months.

How does Chase compare to other easy-access accounts?

The Santander Edge Saver currently pays 6% AER, which includes a 1.49% bonus rate for 12 months. Savers need a Santander Edge current account to be eligible.

Atom Bank’s Instant Saver Reward pays 4.85% AER, and Cahoot’s Sunny Day Saver pays 4.75% AER.

GB Bank’s NuWealth Easy Access Account pays 4.86% but requires a minimum deposit of £500. The rate includes a 0.46% bonus for 12 months.