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Is this new bonus from the AI savings app worth it?

I’ve been using the auto-savings app Chip for years. It’s a great way to help you get saving. Recent charges have made it less appealing – but they’ve added a new free account to the app which will allow you to earn interest on the money saved there.

Here’s what you need to know, plus the VIP promo code you need to access Chip +1.

(This article was originally written in December 2020 but has been updated to reflect changes Chip has made to how much you can save in the account in March 2021).

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What is Chip +1?

Chip +1 is a savings account that sits within the Chip app. You can keep up to £85,000 in the account, but you’ll only earn money on the first £2,000 or £10,000, depending on which level of Chip you are signed up for.

Though it’s part of Chip, it works very differently to the existing Chip accounts. For example it doesn’t have the autosaving features. You can read my review of Chip here.

Keep reading for more or watch my video review from YouTube

Is Chip +1 free?

Two days after launching Chip+1, Chip changed their fee structure for using the app. Why they couldn’t do this all at once I don’t know. But it’s a significant change that you need to know about before opening the account.

To get interest on the full £10,000 you now have to pay £1.50 every 28 days for ChipAI (previously this could be avoided by pausing auto-saves). As the name suggests you also get access to the AI auto-saving algorithm.

Alternatively you can opt for a new free version of Chip (ChipLite). This limits the balance you can earn interest on to £2,000. But you won’t get the auto-saving feature.

You can move between the two tiers each month if you wish.

A third tier, ChipX, will be introduced on April 25th 2021 that costs £3 a month and provides access to investment funds. Be careful here as all ChipAI customers are set to be given a 28-day free-trial of ChipX and at the moment it says you’ll have to choose to downgrade back to ChipAI rather than opt-in staying with ChipX.

BONUS £10 IN APRIL

You can also get a bonus £10 if you open a Chip+1 account in April 2021 with the VIP code CLEVER10.

To qualify you also need to sign up to the ChipAI subscription (£1.50 every 28 days) and stay on it until at least 8th July 2021. You get the first month free, so depending on when in April you sign up, you could pay:

  • Before 15th April you’ll pay £4.50
  • Between 15th April and 10th May you’ll pay £3
  • After 11th May you’ll pay £1.50

The bonus is paid in July. You can read the full terms and conditions here.

How much does Chip+1 pay?

At launch, the rate is 1.25%. Though this sounds pretty rubbish, it’s actually one of the leading rates right now, with only a couple of places beating it.

The rate is variable, which means it could change at any time. And of course, Chip could decide to stop offering this bonus completely.

But if you want to earn interest on more than £2,000 you need to factor in the £1.50 every four weeks, or £19.50 a year.

Initially the most you could earn interest on was £5,000, but as of mid-March 2021, that was increased to £10,000. I’ve updated the tables below and my summary to reflect this.

Amount SavedInterest EarnedTotal return after feeReal interest rate
£1,000.00£12.50£12.501.25%
£2,000.00£25.00£25.001.25%
£3,000.00£37.50£18.000.60%
£4,000.00£50.00£30.500.76%
£5,000.00£62.50£43.000.86%
£6,000.00£75.00£55.500.93%
£7,000.00£87.50£68.000.97%
£8,000.00£100.00£80.501.01%
£9,000.00£112.50£93.001.03%
£10,000.00£125.00£105.501.06%

As you can see that the fee makes a big difference to the interest you can earn, though you’re still beating the rate at most other savings accounts.

But it’s more complicated than that – especially if you have between £2,000 and £3,560 saved.

To get a true reflection of what you’ll earn I think it’s best to treat any money in Chip+1 as sitting in two distinct pots.

The first £2,000 which you can earn the 1.25% on fee free via ChipLite, and then any money above this is you’re signed up to ChipAI.

This table treats shows the cash saved above free threshold once the fee is deducted, showing you what you’d really earn if you deposited more and paid for ChipAI.

Total savedAmount Saved above £2,000Interest EarnedTotal return after feeReal interest rate
£3,000.00£1,000.00£12.50-£7.00-0.70%
£3,560.00£1,560.00£19.50£0.000.00%
£4,000.00£2,000.00£25.00£5.500.28%
£5,000.00£3,000.00£37.50£18.000.60%
£6,000.00£4,000.00£50.00£30.500.76%
£7,000.00£5,000.00£62.50£43.000.86%
£8,000.00£6,000.00£75.00£55.500.93%
£9,000.00£7,000.00£87.50£68.000.97%
£10,000.00£8,000.00£100.00£80.501.01%

As you’ll see when compared to other available accounts, it only really becomes something worth considering if you put an extra £2,500 extra in (meaning there’s £4,500 in total saved with Chip+1). This gets you the equivalent of 0.47% – beating other accounts.

And the more you save, the higher the real interest rate gets, giving you more opportunities to beat inflation.

What’s really important to spot here though is that if you have less than £3,560 total in the account and are actually losing money by having cash saved.

So I’d go with the free account if you have less than £4,500 (but only save £2,000 there), and potentially consider for the paid account if you have more than £4,500 and £5,000.

Also, technically it’s not interest! The money is paid from Chip’s marketing budget so really it’s a bonus you get for putting cash in the account.

It’s calculated every Tuesday, but you won’t get it added to your account that frequently. The bonus is instead paid every 12 weeks.

However, the bonus doesn’t compound, so you won’t earn on top of the money you make. So if you have £5,000 saved, and earn around £15 after 12 weeks, that £15 won’t earn anything at all.

Is the account easy access?

Chip +1 is easy access which means you can take the money out when you need it.

But there is a slight catch. If you choose to close your account before a bonus is paid you’ll lose it.

You also can’t withdraw the bonus until you’ve emptied out the money in your savings.

So let’s say you have £5,015 and withdraw £15. You’re effectively reducing the balance you’ll earn “interest” on to £4,985.

Is the money protected?

The Chip +1 account has full protection under the Financial Services Protection Scheme (FSCS) via it’s partner ClearBank. So if Chip was to go bust you’d be able to claim up to £85,000 back from the UK government.

If you have any money held with ClearBank then that too will count towards that £85k total.

How to add money to your savings

With Chip you need to connect to your current account via open banking. The bank you’ve chosen for this is the same one you’ll use for Chip+1.

Banks that work with Chip:

  • Bank of Scotland
  • Barclays
  • Danske
  • First Direct
  • Halifax
  • HSBC
  • Lloyds
  • Marks & Spencer Bank
  • Monzo
  • Nationwide
  • Natwest
  • RBS
  • Santander
  • Starling
  • Tesco
  • TSB
  • Ulster Bank

Once this is done you can add money from this linked account. It’s easy to do, and takes just a few clicks. The limit you can move in one go is £5,000.

It’s not instant though. When I tried it said it would take three days for the money to reach the Chip +1 account.

You can’t move money from other Chip accounts, which means you can’t use it alongside the Chip AI to automatically move money from your linked account to the Chip +1.

How to withdraw money

Money you take out of the account goes back to your linked current account. It takes one or two working days. That means it’ll take longer over weekends or bank holidays.

Remember, you’ll withdraw your initial balance first, then once that’s gone any bonus payments.

Should you use Chip +1?

Well, if you want to earn money on your savings right now there aren’t many better options. But there are some.

You can earn 2% (fixed for one-year) with a Nationwide FlexDirect account on savings up to £1,500. And you can get 2.02% (Variable) with a Virgin Money current account. There are also regular savers paying up to 1.5%. These should be your priority for your cash.

But if you’ve got money left after this, Chip is currently the next best bet – but only for up to £10,000 in savings. Anything above this won’t earn you a penny. And that’s only with the paid tier of Chip.

But even factoring in the monthly fee for the full Chip it still currently beats the best rates elsewhere. But that could change, so keep an eye out. You might also want to compare it to putting the cash in Premium Bonds.

And remember, you need at least £3,560 in the top tier for the interest to even equal £2,000 in the free tier.

You also need to be aware of some of the restrictions I’ve mentioned above, such as needing to withdraw the initial deposit in full before you can withdraw your bonus. Or that it can take five days for your money to reach your linked current account if you do it just before a weekend.

So it’s not perfect, but for now it’s an OK place to hold your savings.

How to get Chip+1

You have to have an account with Chip to get Chip +1, which means downloading the app and connecting it to a current account.

New Chip Customers

New customers can only get Chip +1 via a referral code. This could be from an existing Chip customer or by using the code provided below.

If you have more friends who want to open an account, get them to use the BCLEVER21 code.

You can download the app for both iOs and Android.

Download Chip and enter the code BCLEVER21 to join Chip +1

Existing Chip Customers

Existing Chip users will need to refer a friend who is new to Chip. You can find your own referral code in the app. You can only share it with one other person.

Chip +1 VIP promo code

April £10 bonus

You can get a bonus £10 if you open a Chip+1 account in April 2021 with the VIP code CLEVER10.

To qualify you also need to sign up to the ChipAI subscription (£1.50 every 28 days) and stay on it until at least 8th July 2021. You get the first month free, so depending on when in April you sign up, you could pay:

  • Before 15th April you’ll pay £4.50
  • Between 15th April and 10th May you’ll pay £3
  • After 11th May you’ll pay £1.50

The bonus is paid in July. You can read the full terms and conditions here.

Access to 1.25% interest

This is the ongoing offer to get the interest account. New Chip users can access Chip +1 with the code BCLEVER21 when they sign up.

Download Chip – don’t forget to use the code BCLEVER21 at sign up to get access to Chip +1