Chase launches new 6.5% savings account – how does it compare to the best rival UK banks?

Chase UK has continued its strong savings accounts offerings with a new 6.5 per cent offering to customers.

While it’s not the highest rate regular saver on offer, it is certainly very near the best in terms of how much interest you can earn with them. But like most things, not all savings accounts are made equal.

Below, we look at Chase’s offer and the other top rates on the market, ordered by how much interest they’ll pay across a year.

There are six banks or building societies offering the best rates of between 6.5 per cent and 8 per cent of this account type.

On regular savers, you don’t get that rate on the full amount you pay in, because that’s an annual rate and you drip feed cash into it monthly – so your first month’s payment gets the full 6.5 per cent rate with Chase, for example, while the second month’s payment gets eleven-twelfths of 6.5 per cent, the third month’s payment gets ten-twelfths of it, and so on.

But it’s important to remember that what makes the right account for each person isn’t just the interest earned, but all the other factors which go into it, including accessibility, how much you can save monthly and potentially what other perks or accounts you can have with the banks if you need to open a current account first.

Chase: 6.5% rate, max £125.53 interest

All our interest calculations assume you make the maximum allowed contribution monthly, and do so at the start of each month. Should you do that with Chase, owned by JPMorgan Chase, at the end of a year you’ll have saved £3,725.53, including the interest.

Chase say its account is designed to help savers achieve “longer-term ambitions” by “combining a competitive fixed rate with a simple way to build towards their financial goals” – essentially what regular savers do best.

The other important aspects to note for Chase are that you’ll need to open a current account to access any of their savings products (that’s normal), and that this one is an easy access version: you can take cash out if you need it, though of course that would impact the amount of interest you can earn. The 6.5 per cent is fixed – which is not the case everywhere with regular savers.

George Sweeney, personal finance expert at Finder, notes that new customers can also still get the previously market-topping easy access savings account, though since you have to open a current account to access them, some competitors are offering a bigger overall package.

“The move makes Chase an even more tempting destination for savers, as it also has its easy access savings account paying 4.5 per cent, and the cashback offer of 2 per cent on everyday spending,” he said.

“However, the lack of a switching bonus, when so many banks are currently running them, may dampen the incentive to move compared to others on the market.”

First direct: 7% rate, max £136.50 interest

The most interest you can earn in a year on a regular saver right now is with First Direct, owned by HSBC.

That’s due to the slightly higher interest rate, along with the fact it’s a £300-a-month maximum amount you can put in.

Max it out and your savings are £3,736.50 after one year.

Once more the rate is fixed for the full year, but unlike Chase’s, you cannot withdraw cash during the year – it’s locked in unless you close the account early.

There’s one other aspect for those considering first direct – if you move banks there, they will pay you to do so.

“Those moving to first direct can earn up to £136 a year in interest, as well as bagging a £175 switch bonus,” Finder’s George Sweeney added.

Co-op Bank: 7% rate, max £114.21 interest

Here’s the first example of why regular savers aren’t all equal and why you can’t just compare headline rates. Co-op Bank has a higher rate than Chase and the same as First Direct, but you can get less interest overall.

That’s just due to Co-op allowing a slightly lower maximum deposit amount per month, capped at £250.

The maximum saved after a year is therefore £3,114.21.

You can withdraw money along the way and replace it as long as you don’t exceed the monthly cap, but one other wrinkle to notice is that it’s a variable rate, so the 7 per cent could go up and down across the year.

Santander: 8% rate, max £104 interest

The highest interest rate in the regular saver market right now is Santander’s 8 per cent, but it only lets you save £200 a month, so it comes in fourth by interest paid.

Across a year it’s £2,504 saved in total, maxed out.

You can withdraw money and the interest rate is variable. Also worth noting, this one isn’t a 12-month account which closes at the end; it’ll continue beyond a year but at a lower rate (3 per cent) so mark your calendars to withdraw and switch, if you want to keep saving at a top rate.

Progressive Building Society: 7% rate, max £91.79 interest

The highest interest rate among building societies comes from Progressive, where you can save £2,491.79 after a year.

That’s including the interest and saving a maximum of £200 a month.

It’s a variable rate, and you can withdraw money if you need.

Nationwide: 6.5% rate, max £84.50 interest

Finally, Nationwide is another which haa a cash switch offer running to move your current account, which may be a factor for some. But as far as its regular saver goes, it is the lowest-paying of the top contenders.

£200 a month and a 6.5 per cent rate means you can top out at £2,484.50 after a year and once more it’s a variable rate.

You can withdraw cash but only three times across the year. Any more and the interest rate drops from the fourth withdrawal until the end of the year-long term.