New Chase bonus deal takes savings rate to 4.75% – is it worth it?

Following a string of savings rate cuts and, more recently, a trimming down of its cashback offering, Chase is attempting a bounce back with a new bonus interest rate.

The digital challenger bank has introduced a six-month bonus offer of 1.75% AER for new customers who open a savings account. Combined with the underlying rate of 3%, this takes the overall deal to 4.75% AER.

This means that Chase now offers the best savings rate on the market for those looking for an easy-access account.

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However, there are some caveats.

The deal is only available to new customers. Once the six-month bonus expires, customers will only be paid the underlying interest rate (currently 3% AER).

Furthermore, the underlying rate could fall further over the months to come. In fact, it is likely to face cuts before the six-month bonus deal even expires.

This is because the underlying rate tracks the UK base rate, set below it at a margin of 1.5%. This means the rate falls each time the Bank of England cuts interest rates.

Around three more base rate cuts are expected before the end of the year, taking the base rate to 3.75%. If Chase’s terms and conditions remain the same, this would bring its underlying rate to 2.25%.

Other savings providers will also cut their rates as the base rate falls, even if they do not take a tracker approach, but the effects might take slightly longer to come through.

That said, the Chase deal does offer some attractive features for those looking for an easy-access savings account, including a high account limit and no fees, charges or withdrawal penalties.

A Chase current account is required to open a linked saver. The current account is fee-free and offers 1% cashback. It is worth pointing out that fewer transactions will qualify for cashback from 7 April after a recently-announced change to the terms and conditions.

Commenting on the latest savings deal, Shaun Port, managing director of savings at Chase UK said: “We want to help customers reach their savings goals by providing them with a simple and straightforward way to save.

“By increasing the bonus offer to 1.75% on our easy-access saver for new customers, we hope they can try Chase for the first time and make more of their money.”

Top easy-access savings accounts

These are the top easy-access savings accounts on the market right now:

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A fixed-rate deal is the best way to protect yourself from rate cuts

If you are looking to protect yourself against future rate cuts, a fixed-rate savings account will pay you a guaranteed rate for a pre-agreed period of time.

A one or two-year fixed deal could be a good idea, if you know you won’t need access to the money during that time. Any longer, and you might want to consider investing it instead.

If you act quickly, you can still open a fixed-rate cash ISA before the end of the tax year on 5 April, provided you have some of your annual £20,000 tax-free allowance left over.

See our round-up of the best fixed-rate savings accounts and cash ISAs.