JP Morgan has launched Chase, the company’s new digital bank, in the UK. This means there is a new JP Morgan current account available. So, is the 5% interest account any good? Read on to find out.
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What are the key details of the JP Morgan current account?
Here are the key benefits of Chase, the new JP Morgan current account:
- Customers receive 1% cashback on all spending for 12 months
- It offers 5% interest on all round-up savings for 12 months
- You can use it abroad with no fees and get the Mastercard exchange rate
- The app offers different pots for separating your spending into different categories
What are the positives of the new JP Morgan current account?
The new JP Morgan current account has many positives, for certain customers at least.
The 1% cashback on savings will work best for big spenders. This is not capped, so you can gain cashback on everything you spend for 12 months. This is more generous than most other current accounts. There is also no fee on the account that will eat into this cashback.
The savings interest is a positive too. When you spend money using the Chase account, you get the option to round your spending up to the nearest £1. This money then goes into a separate pot, which pays 5% interest.
For those that struggle with saving, this could painlessly help build a savings habit. The rate is also much higher than most regular savings accounts and alternative current accounts.
However, other current accounts work differently, which means some people will still get more interest in an alternative account with a lower rate. It’s important to look at your specific requirements and spending habits and work out which account is best for you.
Another benefit of the new JP Morgan current account is that you can use the account abroad without paying a fee – this includes cash withdrawals. Customers also get the Mastercard exchange rate when they are overseas.
For app lovers, there’s an added benefit. The Chase app offers separate pots for different kinds of spending. This can help you manage your budget more effectively. However, you will need to use the app whenever you want to switch the pot you’re taking money from.
What about the negatives?
There are negatives to the new JP Morgan current account too.
Firstly, the big draws – the 5% roundup interest and 1% cashback – only last for 12 months. If these offers entice you to get the account, you’ll need to remember to switch after a year. But, if you know you often forget to switch accounts, it might not be the account for you. When these benefits disappear after a year, the new JP Morgan current account could be less attractive than other current accounts available.
It is also unclear how long these perks may be on offer. It’s not unusual for new accounts to offer lots of perks to attract customers. They might then scale them back once they’ve attracted enough users. If Chase becomes too popular in the UK, the benefits may well be scaled back sooner.
Certain rules and regulations were brought in after the 2008 global financial crisis to help protect customers. They include separating retail banking from wholesale banking. Banks like JP Morgan that straddle both retail and wholesale banking must follow the ringfencing rules.
To comply with these rules, Chase has to keep its balance sheets under £25 billion. To do this, the new JP Morgan current account may have to cut some of its most attractive features in due course.