JPMorgan’s digital bank Chase has launched a new savings account in the UK as the New York-based firm aims to take on Britain’s challenger and high street banks.
Chase is aiming to win over UK customers with a 1.5% interest rate at a time when inflation and the cost of living are reaching all-time highs.
That rate surpasses the interest offered by high street competitors such as Lloyds Bank and NatWest, which have savings account rates of 0.01% that are set to rise to just 0.1%.
The UK’s neobanks, which have disrupted the world of finance with digital banks accessible via smartphone apps, will also be following the launch of Chase’s savings account closely.
Challenger banks such as Monzo, Starling Bank and Atom Bank have enjoyed growing popularity and soaring valuations as consumers become accustomed to digital-first banking services.
High street banks have been forced to adopt but have often been hindered by legacy technology infrastructure, whereas neobanks have started from scratch and are free from those constraints.
These digital challengers have been bolstered by the 2018 implementation of open banking, which allows third-party developers to build applications and services around securely accessed consumer banking information.
Chase launched with a current account in the UK last year, as part of major expansion goals from the US company into European markets.
It has hired hundreds of staff to help build and scale the digital bank as it looks to gain a slice of the competitive UK digital bank market.
Chase’s new savings account allows users to deposit up to £250,000 in total at any time. Consumers can access their savings as often as they like, with no fees, charges or loss of interest.
Chase does not have a minimum income requirement and only requires a smartphone to use.
“With the cost of living increasing, we know that consumers want to maximise the interest they can earn with the reassurance of being able to access their savings instantly,” said Shaun Port, Chase’s UK managing director for savings and investments.
“We have designed the Chase saver account to provide our customers with maximum flexibility alongside a competitive rate.”
Last week, the UK’s competition regulator recommended the establishment of a new entity to have “regulatory oversight” of the open banking industry.