Chase Bank has warned it will drop rates on two February dates (Image: Getty)
Chase Bank has issued an unwelcome message to customers as it drops payouts twice.
The online-only US bank, which has millions of customers in the UK, has announced it is set to reduce the on its savings accounts.
Currently, Chase pays 3.5% interest but from Thursday, February 13 it will drop to 3.25% on money held in savings accounts.
The bank says the decision comes after the Bank of England cut its base rate by 0.25% to 4.5%. And as announced a few months ago, Chase has also taken the decision to reduce how closely it tracks the Bank of England base rate, so the bank will drop its rates again from Wednesday, February 19.
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From that date, the will move from tracking 1.25% below the Bank of England to 1.5% below. It means on Chase savings accounts will be just 3% from next Wednesday.
Chase said in its message to customers: “On 6 February 2025, the Bank of England base rate was reduced by 0.25%, meaning the new rate is 4.5%
“As the Chase saver rate is tied to the Bank of England base rate, we’ll be updating it. The standard saver rate will change from 3.5% AER (3.45% gross) variable to 3.25% AER (3.2% gross) variable on 13 February 2025.
“In case you missed it: From 19 February 2025, the AER on our Chase saver account will change from 1.25% to 1.5% below the Bank of England base rate. This means the standard Chase saver variable rate will be 3% from that day.”
The reduction also comes at a time when Starling Bank is set to remove the paid on personal and joint current accounts on February 10. People can still earn interest on balances up to £5,000 until that date.
The bank has launched an Easy Saver, which customers can make deposits in from their personal current account, earning 4% AER (annual equivalent rate) variable on balances of up to £1 million. A rate of 3.25% AER has been paid on balances up to £5,000 on its current account.
Starling said customers were notified in November 2024 and can still benefit from the account’s other features.
Customers can definitely get a better deal by switching to another savings account. Right now, Trading212 is paying at least 4.9% on savings, while high street bank Santander offers a 6% regular saver tied to its Edge account.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: “Savers who rely on their cash savings to boost their income are at the mercy of lower .
“It has already been proven that cuts to the Bank of England base rate set the wheels in motion for the biggest banks in the country to cut rates, showing loyalty does not pay.”