With automatic saves, can this app help you put money away?
One of the best savings apps over the years has been Chip. A smart autosave feature and often decent interest rates have meant I’ve often been a big fan.
Note often, not always. That’s because it feels like every few months the proposition (and charges) change. Sometimes it’s free, sometimes it’s not, and in recent years there’s been a move to focus on investments over savings.
And the latest revamp means it (once again) won’t be free to use the auto-saving feature. In fact, it’s never been so expensive!
So is it worth getting or sticking with the app to boost your savings?
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What is Chip?
Chip is an automated saving app for your phone or tablet. It analyses your current account and works out how much you can afford to save – and then does it for you by moving the money to a separate account.
It also offers a savings rate of 1.1% AER or a Prize Savings Account with the chance to win up to £20,000.
There are also an increasing number of investment features, though this article is focused just on savings.
How much does Chip cost?
One issue I have with Chip is how frequently they change the cost of using the app. Sometimes it’s free, sometimes you have to pay.
Currently there’s a free tier called “Chip”, which is all you need to access the savings accounts and features. This is the focus of the review.
There’s an additional paid tier called “ChipX” (at £5 every 28 days) which adds investing functionality.
Auto save charges
Rather than make users pay a monthly charge for the entry-level Chip tier (which has happened in the past) there are going to be charges from 12 October 2022 for using different features – including autosaves.
New savings fees
These new charges begin on 12 October 2022
- 25p per recurring save
- 45p per auto-save
New withdrawal charges
- Two free withdrawals per calendar month
- £1 per withdrawal after this
Are the new charges worth paying?
Andy’s Analysis
I’m disappointed Chip has added charges for using autosaves (again). I get that the app needs to make money, and they can’t offer loss leading products. But it’s ridiculously expensive.
An autosave happens every four days. So unless you turn them off or pause them, they will happen 7 times a month or 91 times a year. At 45p per autosave, you’ll pay £3.15 a month or £40.95 a year.
That’s far more than you’ll have paid for this feature on the pre-2022 model. And it’s something no one should be paying especially since the exact same function is available for free via the Plum app.
You’ll also need to be careful if you do use Chip not to withdraw your money more than twice a month, otherwise you’ll get hit with a hefty £1 fee.
How does Chip help you save?
Chip offers a handful of features to boost how much of your money goes into savings.
Autosaves
I really love the “big idea” behind Chip. With automated savings, the app’s “AI” (artificial intelligence – don’t worry it’s not Terminator) algorithm analyses your spending habits, and based on what goes in and out of your account (along with general data about all its users) Chip will suggest an amount you can afford to save each week.
The amount will vary depending on how much money you have in your account and how often you spend it. It could be just a few quid, or a decent chunk. In theory, you shouldn’t really notice that the money has gone.
This is great for those who always plan to save but never get around to it. The autosaves can quickly add up.
But with a 45p charge for each autosave you’re really wasting cash for using the feature. However, if you want to learn more, keep reading.
How often does Chip save money?
By default Chip will suggest savings for you every four days. You can pause auto-saves for a week, two weeks or a custom date up to three months away.
It can take up to three working days for your money to reach the linked account.
How to cancel autosaves
You have until 3pm to choose to stop this payment if you wish. If you’re happy with the suggested amount you don’t need do anything and the money will automatically be sent to your Chip account.
How much can you save with Chip?
Chip says the average is £20. There are five levels of auto-saves, with one being the lowest. By default, you’re at level 3, but it’s easy to switch between them in the app.
Overdraft savings
I’m not a fan of this feature which allows you to move money from your overdraft into Chip. If you do this you’ll likely end up paying huge overdraft fees. Personally I’d avoid activating it.
Minimum balances
This is a handy cap you can put so that Chip won’t every take money out of your connected bank account past a certain balance. This can ensure you don’t ever go overdrawn or not have enough cash for other payments.
Splitting your autosaves
You have the option to choose how much of your autosaves goes into each savings account or goal (more on these later). So you could put 80% into the main savings account, but 20% into another.
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Recurring Saves
This feature lets you choose when you move a set amount over. It can be weekly, fortnightly, every four weeks or monthly.
It’s basically a standing order – but one that charges you 25p for each transfer. So you’d be better off just setting these up with your bank for free, and moving the money to one of the best paying savings accounts.
Savings goals
The savings goals feature is useful in helping you identify what you’re saving for, and track your progress against the targets you set.
You can enter a name, date and amount to help motivate you to keep saving. You can have as many as you want, and allocate how much of your autosaves goes to each goal.
The app then shows you how realistic it is to achieve your savings target by certain dates in the calendar when you’re choosing your savings deadline. Once you set a savings goal, Chip lets you know whether you’re on track to hit your target.
The money isn’t held in separate pots for these goals (as you would with Starling or Monzo). It’ll still sit in whichever account you’ve chosen for your money.
Save streaks
The more you save without cancelling a transfer or withdrawing cash the longer your savings streak will be. In theory, this keeps you motivated to keep on saving, though I doubt you’ll pay much attention.
Chip’s savings accounts
The money you auto or manually save to Chip sits in one of the connected accounts.
There’s the Instant Access saver, which can pay a decent rate – you can see the latest one in our savings best buy tables.
Alternatively, you can put your money in the Prize Saver account. There’s no interest here but you might win a prize between £10 and £10,000. Here’s my full analysis.
Is Chip any good for savings?
The autosave feature is great, but not at 45p per save. There’s no point paying 25p for the recurring saves either.
That leaves it just as an account to maximise earnings on savings. Does it perform? In the past Chip has offered high-interest rates, but the ones currently on offer can be beaten.
Alternatives to Chip
I’d use Plum for autosavings without a charge, and simply set up standing orders for regular payments for savings. Meanwhile Monzo and Starling let you create goals within their “Pots” or “Spaces” features.
For higher interest savings rates, check out my latest best buys.