Savings app Chip earned an “excellent” account rating after increasing the interest on its Cash ISA to 5.03%.
The account, which includes a 0.68% bonus rate, can be opened with just a £1 deposit, and interest is paid monthly. Savers must input the bonus code on the provider’s website to secure the added bonus.
Cash ISAs have grown in popularity over the past years as higher interest rates continue to drag more people into savings tax thresholds. These accounts allow people to save up to £20,000 a year tax-free.
Easy access accounts are typically more flexible, allowing savers to make payments and withdrawals with minimal restrictions and small opening deposit requirements.
Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Chip has increased the rate on its Chip Cash ISA this week to a competitive 5.03% AER, which includes a 0.68% gross bonus for the first six months, providing a promotional code is entered within 14 days of installing the Chip app.
“Savers need as little as £1 to open the account, and interest is paid monthly, which may be useful to those looking for an income boost.”
Ms Eastell noted that – as is the case with many variable rate ISAs – both instant access and further additions are permitted. However, she pointed out: “Savers should be aware that they need to hold a Chip subscription – for which both free and paid options are available.”
She added: “The deal secures a prominent position in our top tables and earns an Excellent Moneyfacts product rating.”
While Chip’s new promotional offer may be attractive, it isn’t quite topping the table yet.
Savings app Plum takes the top spot, paying an Annual Equivalent Rate (AER) of 5.05% on deposits of £100 and more.
The rate includes a 1.49% fixed bonus for 12 months, which means the interest will drop by at least 1.49% after a year. This makes it important for savers to re-assess their accounts at that point to check they’re still competitive.
However, just three withdrawals are allowed per year with this account, which may not make it the best option for people who may need regular access. Interest is paid monthly.
Trading 212 joins Chip in second place with an AER of 5.03%. This includes a bonus rate of 0.13% for 12 months, and interest is paid monthly. A minimum deposit of £1 is required to launch the account and there are no restrictions on withdrawals.
Moneybox follows closely behind with an AER of 5% on deposits of £500 and over. This includes a bonus rate of 0.55% for 12 months, and interest is paid on the anniversary of opening. A lower interest rate is paid if more than three withdrawals are made over a 12-month period.
