JP Morgan Chase, one of the largest consumer banks in the US launched a new digital bank that will provide cashback and money management offerings in the UK.
The neobank provides 1% cashback on everyday spending for the first 12 months, free card use abroad, including at ATMs, and 5% interest on limited savings. The 1% cashback is payable when customers use their Chase debit card in person or online and will be offered at retailers at home and abroad.
The users will not get cashback on big-ticket purchases such as cars, or on money spent on other luxuries. There’s no fee in opening a current account and customers can start earning cashback rewards as soon as they open.
Customers will receive the cashback rewards without the need to switch their banking provider, and they don’t have to maintain a minimum account balance or set up direct debits. When customers spend money, they can round up purchases to the nearest GBP1 ($1.38) using a setting that can be switched on and off with the app.
The account also comes with a numberless debit card, with the details stored behind a secure login on the app. This means a new card number can be generated straight away if it is reported lost.
This JP Morgan Chase is a digital-only, app-based banking account, making it a rival to firms such as Monzo and Starling in the UK.
Chase provides a broad range of financial services to over 60 million consumers
Chase is the largest consumer bank in the US providing a broad range of financial services to around 60 million American households. Chase further plans to introduce a broad range of banking products in the future, including new current account features, savings and investment accounts, and lending products.
Sanoke Viswanathan, CEO at JP Morgan Chase said, “We’re offering people in the UK the opportunity to experience Chase for the first time with a current account that’s based on simplicity, a fuss-free rewards programme, and exceptional customer service”.
Laura Suter, head of personal finance at AJ Bell said, “First impression is that this new account will blow the competition out of the water, with an attractive cashback deal and a market-beating interest rate on its savings feature”.
The 1% cashback is better than rivals as it’s on spending, rather than just certain bills or direct debits, and it doesn’t require a minimum monthly deposit or come with a fee.
“A cash round-up feature has become fairly commonplace with banks now, and it means each transaction is rounded up to the nearest pound, with the difference siphoned off into a savings account. Chase is paying 5% interest on its round-up savings which makes it very attractive,” she added.
Suter said there will be some drawbacks for the account for some customers, as it doesn’t have any bank branches. All the help and customer support are online or on the phone, and it must be run from an app. Some people might be wary of the name as it’s new to the UK market, although it has a long history in the US.