Neobanks compete with high interest rates to attract UK savers.

By The Exchange Team

U.K. online banks are competing to increase savings account returns to attract cash-strapped savers.

After the Bank of England raised its benchmark interest rate for the ninth time in a year.

After Thursday's rate hike, Starling Bank and Chase U.K., JPMorgan's U.K. challenger brand, took advantage.

Chase U.K. increased their saved account variable AER to 2.7% from 2.1% on January 4, 2023.

Starling launched its first savings product on Thursday, a fixed-term deposit account that promises 3.25% after a year on balances of £2K ($2,439) to £1M.

The Bank of England raised its main interest rate by 50 basis points to 3.5% on Thursday, the highest level in 14 years.

The Bank of England is attempting to contain soaring inflation, which is approaching 41-year highs.