The savings app Chip has increased the interest rate on its Smart Cash ISA to 4.32% AER, placing it at the top of the flexible cash ISA market. The account is available exclusively through the Chip app to UK tax residents aged 18 and over.
The new rate comprises a standard underlying rate of 3.75% AER, which tracks the Bank of England base rate, plus a promotional boost of 0.57% AER applied for the first 12 months from account opening. The offer is limited to new customers, defined by Chip as those who have never previously transacted in a Chip account and have no other promotional rates applied across any Chip products.
A Flexible Account with Conditions Attached
The Smart Cash ISA is structured as a flexible ISA, meaning savers can withdraw and redeposit funds within the same tax year without affecting their annual £20,000 allowance, subject to ISA rules. Withdrawals can be made as frequently as required, with funds typically arriving the next working day.
Interest is calculated daily but paid annually, and Chip has made clear that any unpaid interest is forfeited should the account be closed or transferred out before the account anniversary. That condition has been flagged as something savers should weigh carefully before committing. According to Caitlyn Eastell, personal finance analyst at Moneyfactscompare.co.uk, “while savers can invest as little as £1 and add to the account at any time, if they wish to close the account or transfer out before the first anniversary, they will not receive their interest payment, which should be considered.”
Eastell also noted that the boost brings meaningful appeal alongside the structural guarantee on the underlying rate. “Adding to its appeal, Chip’s Smart Cash ISA has an underlying gross rate guaranteed to be equal to Bank Base Rate,” she said.
Rate Leads the Market, Though Longevity Remains a Question
According to Moneyfactscompare.co.uk, the updated rate places the Smart Cash ISA at number one among comparable flexible cash ISA products. Eastell described the rate as attractive but urged savers to keep the expiry date of the bonus in view. “This includes a 0.57% AER bonus for the first 12 months, so it’s important savers review once it expires,” she said.
Eligible deposits held within the Smart Cash ISA are protected under the Financial Services Compensation Scheme up to £120,000 per person, per institution. Chip says money is held across a panel of established UK-licensed banks, including Barclays, Lloyds and HSBC, with FSCS protection applying separately to deposits held with each institution.
Chip is not a bank and operates solely through its app, with no physical branches or debit card access. The Smart Cash ISA is provided by Chip Financial (Investments) Ltd, which is authorised and regulated by the Financial Conduct Authority. The company says a cash ISA transfer facility is in development, though no launch date has been confirmed. The account has received an “Excellent” rating on Trustpilot, based on more than 4,000 reviews, according to the company’s website.
