BoE raising interest rates to 0.25%

Would this change in interest rate effect the Allica Bank account positively or not change it at all?

From my understanding, mortgage rates will increase and saving rates will increase as well.

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Happily I’ve just received the ‘big news’ from Chip, to let me know that the base rate has just been raised…and to remind me that the interest/bonus I’ve been receiving has dropped from 1.25% to 0.7%. Should have called it ‘Great News’. Or ‘Happy Christmas’.

This is a question I have asked a couple of times over the last few months but still no answer from Chip management. So I have to assume the interest rate with Allica is fixed and won’t change. The risk is that as other savings accounts increase their rates, Chip will be left behind.

Its not a tracker account so there is no guarantee if or when it will increase in response to base rate rises or decrease in response to base rate falls.

The market will probably trend upward, but on an individual account basis changes are only guaranteed with tracker accounts.

Hi everyone,

We wrote up what this means for savings here: The Base Rate is up. When will your savings rate go up? have a read.

@w2h1982 Savings work differently from mortgages with regards to fixed vs. variable. But we answer most questions in the blog post.

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Thanks for the update Alex.

The comment about mortgages rates however did not come from me but I am sure @Spur will read the response too

In the article it says, “If rates increase as expected, rest assured we’ll be at the front of the queue aiming to deliver the best possible returns to Chip savers.”?

You’re not really at the front of the queue though, are you? Tandem has increased to 0.77%, Virgin just went up to 1%, and plenty of other savings accounts are now equalling Chip’s unexceptional 0.7%

So you’re quite a long way down the queue…

I think the biggest challenge Chip has is that these interest rates with other financial institutions are taking too long to negotiate and are fixed rates that do not change, so that by the time a rate is announced and a product is launched, it is likely it will no longer be competitive or if it is, with rates increasing so frequently at the moment, it will lose its competitiveness very quickly.

I think Chip are preparing to launch a 90 day notice account, currently the best rate in the market is 1.02%.

There are predictions the BoE will increase rates again this Thursday and then are likely to see savings rates increase again. The question is can Chip keep up?