Savings app Chip has reduced the interest on its easy-access Cash ISA but is still topping the table with an offer of 5%, earning an “excellent” Moneyfacts rating. With ISA season fast approaching, savers are being urged to “use or lose” their tax allowance before the new tax year begins, making this a crucial time to maximise savings opportunities.
Cash ISAs have become popular over the past few years as higher interest rates drag more people into savings tax thresholds. These accounts allow individuals to save up to £20,000 a year tax-free, making them a key tool for savvy savers. Chip’s deal includes a 0.68% bonus rate for new customers for the first three months.
The account can be opened with a deposit as low as £1, and interest is paid monthly. To receive the bonus rate, savers must enter the code “MARCHBOOST” on Chip’s website. After the initial bonus period, the interest rate will revert to Chip’s standard rate of 4.32% AER, so savers need to review their accounts regularly to ensure they’re still getting a competitive return.
This flexible ISA allows savers to withdraw and replace funds within the same tax year without affecting their annual ISA allowance. Plus, there are no penalties or restrictions on withdrawals, making it a good option for those who want easy access to their savings.
However, it’s important to note that a Chip subscription is required to open the account – both free and paid subscription options are available.
The account is authorised by the Financial Conduct Authority (FCA), and deposits up to £85,000 are protected by the Financial Services Compensation Scheme (FSCS).
Commenting on the deal, Caitlyn Eastell, spokesperson at Moneyfactscompare.co.uk, said: “Chip has reduced the rate on its Chip Cash ISA this week, despite which it continues to pay the market-leading rate.
“Savers can invest as little as £1 to open the account, and interest is paid monthly, which may be useful to those looking for an income boost. The deal secures an Excellent Moneyfacts product rating.”
While Chip may be offering the top rate for easy-access Cash ISAs, competition isn’t far behind.
Money app Plum takes the second position with an Annual Equivalent Rate (AER) of 4.78% on deposits over £100.
The rate includes a 12-month 1.22% bonus, and interest is paid monthly. However, a lower interest rate will apply if more than three withdrawals are made in one calendar year.
Trading 212 joins Plum in second position and offers an AER of 4.78%. The rate includes a 0.28% bonus for 12 months, and interest is paid monthly. Withdrawals are not restricted.
