Chase Bank cuts rate for savings from next Thursday in message to customers

Chase Bank is cutting its savings rate from next Thursday (August 14) following the Bank of England's (BoE) decision on interest rates.

The BoE reduced the base interest rate by 0.25 percentage points from 4.25% to 4% on Thursday, marking the lowest level for more than two years. The base rate helps to dictate how expensive it is for people to take out a mortgage or a loan, but savings rates are also linked to the figure and will now be reduced over the coming weeks. Many variable and tracker savings accounts closely follow the base rate which means customers with these accounts face a drop in the amount of interest they will earn thanks to the cut.

Chase Bank has a saver account with a variable interest rate that currently tracks at 1.5% below the base rate, but this is set to drop from next Thursday, August 14.

Chase's terms and conditions explain that the interest rate on its saver account will automatically change five business days after the BoE announces a change to its base rate.

As the BoE has confirmed a cut to the base rate down to 4%, it means Chase's saver interest rate will drop from 2.75% to 2.5% next week, as it always tracks 1.5% below the base rate. Customers who have a Chase saver account will be contacted by the bank to inform them of the new rate.

In a message to customers on its website, Chase explains: "This account has a variable interest rate. The annual equivalent rate (AER) tracks at 1.50% below the Bank of England's base rate (also known as the Bank of England's bank rate which is available on the Bank of England website).

"For example, If the Bank of England's base rate is 4.00% we will track below this rate by 1.50%, resulting in a Chase saver interest rate of 2.50%. The current interest rate applicable can be found in the app or on our website (or you can contact us). Interest is paid on the first calendar day of the month and is calculated on a daily basis.

"The interest rate we'll pay on this account will automatically change five business days after the Bank of England announces a change to its base rate.

"For example, if the Bank of England announces that they are decreasing the base rate by 1.00%, the AER on this account will decrease by 1.00% five business days later. We will contact you to let you know the new rate applicable to this account."

Chase said the interest rate on its saver account will never go below 0% and if the BoE's base rate goes below 1.5%, the interest it will pay on this account will be 0%.

The bank adds: "We may also change the rate below which this account's interest rate tracks the Bank of England's base rate. We will give you at least two months' notice before making this change."

Customers who wish to close their account can do so at any time without a charge and Chase will transfer any funds held within it, including interest, to you.