Chase removes interest on current account - is it time to switch?

The app-exclusive provider also plans to cut rates on its easy access account.

Chase has stopped offering interest on its current account as of 5 August 2024.

Since April 2023, its Chase Current Account had offered customers 1.00% AER on funds, as well as access to its Chase Saver Account, making it a sought after deal.

“While it is disappointing to see Chase remove the credit interest, the current account still offers a fuss-free banking experience and some perks,” explained Rachel Springall, Finance Expert at Moneyfactscompare.co.uk.

Benefits include up to £15 in cashback during the first year, and no transaction fees for purchases abroad.

Chase savings rates also to be cut

In response to the Bank of England base rate being lowered for the first time in over four years, Chase also plans to cut rates on its linked Chase Saver Account.

It offers a variable tracker rate set 1.15% AER under the base rate and pays 4.10% AER, but this is set to fall to 3.85% AER on Thursday 8 August 2024.

“There are only a handful of easy access accounts that have the interest rate paid tied to the Bank of England base rate, but even so, it’s important savers check the terms and conditions carefully of their account so they can be prepared for any rise or fall,” commented Springall.

Despite this, those taking advantage of Chase’s 1.00% AER fixed bonus (now closed to new customers) will still be able to enjoy the added interest, though this is slated to end on 16 January 2025.

Is it time to switch?

With Chase customers seeing their interest earnings squeezed on multiple fronts, many may now be seeking alternative options.

Nationwide’s FlexDirect current account pays a market-leading 5.00% AER fixed for 12 months on balances up to £1,500 before reverting to a 1.00% variable rate.

This may provide a welcome boost to those who can meet the minimum £1,000 a month deposit but note that interest is worked out monthly whereas Chase’s account is calculated daily.

Alternatively, TSB recently unveiled its £190 switching incentive on its Spend & Save or Spend & Save Plus current accounts.

While these accounts don’t pay interest, they do offer access to TSB’s Monthly Saver that offers 6.00% AER for the first year for those depositing £25 to £250 each month.

“Customers need to weigh up any desirable perks they want from their main bank account as not every account out there can necessarily match all their expectations, which is why the Chase account could always sit alongside their existing account,” said Springall.