With automatic saves, can this app help you put money away?
FinTech – or financial technology – is big businesses. Every week a new app launches which promises to revolutionise your finances. And every month or so another one disappears (Yolt, OneDox and more).
One that’s been around for a good few years now is Chip. I was a big fan, until the addition of a fee dented its appeal. But that’s now changed, with a revamp that brings the core features back for free users.
And though it’s a lot less than previous rates, the linked 0.7% savings account isn’t actually bad in comparison to other options.
So is it worth getting or sticking with? Here’s my review of how Chip works.
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 0.7% AER on up to £85,000, which is pretty good for easy access accounts right now, and a £20 welcome bonus with the code CLEVER20.
How much does Chip cost?
In January 2022 Chip changed the fee structure, and I hope this one sticks (there were three changes in six months in 2020!). There are now just two options (which apply to new and existing customers):
This is the free tier and the default one when you sign up. I think this is the option most of you will need. With this you get:
- Access to 0.7% AER savings account
There is a £3 fee for this, charged every 28 days (so you pay 13 lots in a year, not 12). My review won’t look at these features as they’re only worth it if you are investing, and even then might not be the best option for you.
In addition to the free features, ChipX users get:
- Cheaper investment charges (0.25% rather than 0.5% if you invest via the basic Chip plan)
- Access to specialist investmenet funds
How does Chip help you save?
There are a couple of ways you can use Chip to boost how much of your money goes into savings.
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.
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.
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.
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.
I’m always encouraging you to set up a standing order to move money to a savings account just after payday. This means you will always put aside the amount you know you can afford early on – and not “accidentally” spend it without realising.
Ideally you’d move this money to your savings account that offers the best interest rate. But if that account is with Chip then you’d need to use the inbuilt Payday saves feature.
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 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.
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. Right now there’s only one, though Chip says it has plans to bring customers more accounts with competitive rates in the future.
How much interest can you earn?
When Chip started it offered up to 5%, which was a huge plus for me. This then dropped to 1.25% via the now-defunct Chip+1 account. Not great, but better than elsewhere. Those accounts are a thing of the past.
Now it’s 0.7%, which is a variable rate held in an account with Chip’s partner Allica Bank. This rate sounds awful when compared to the past options. But actually it’s one of the best ones available right now.
Interest is compounded daily and added to your balance. You can save up to £85,000 in the account.
Is it really the best paying savings account?
I have slight issues with Chip sometimes promoting this rate as “market-leading”, even when competitors were offering slightly more on their easy-access accounts. But this is splitting hairs when those differences are so marginal. That could however change when (not if) other banks beat this rate.
Indeed, it can be beaten, with some accounts elsewhere offering 2%, but only on limited balances. This means if you have more than a few grand then this would likely require you to split that money across multiple accounts. If you just want a single account then Chip is a decent option.
How do you withdraw your money?
It’s easy to withdraw your money, with just a few clicks in the app to send the money to your conneted account.
Sadly it isn’t instant. It’ll take two working days to reach your current account, though if you submit the withdrawal before 11am, it’ll move the next day.
Bear in mind that deposits take three working days to clear. So if you just put some money into the account and go to withdraw it on the same day, you’re looking at five working days. If that’s over a weekend you’ll need to add two days on top.
The only exception is if you don’t keep your money in one of the interest paying accounts. There is a Chip Savings Account option, but I’d avoid this since there’s no interest.
Is your money safe in Chip?
Yes. If you put the money in one of the interest paying accounts you then get FSCS (Financial Services Compensation Scheme) protection. This means if the bank goes bust the government guarantees up to £85,000. Great.
Is Chip safe?
This all comes down to how comfortable you feel with sharing your data. The open banking connection gives Chip access to the details in your account, but there is bank-level encryption security put in place.
In terms of accessing your money, it can only move money between your Chip account and your connected bank account.
How do you set up Chip?
To start you must have a smartphone. Once you’ve downloaded the app, sign up and don’t forget to enter a promo code if you have one (more details on this below).
You then connect to your bank. It’s actually quite easy to set up thanks to Open Banking which will take you through to your banking app to authorize permissions. It’ll take maybe 30 seconds.
Once set up make sure you turn notifications on. This will allow the app to alert you when it wants to start saving for you and give you instant notice if you want to cancel an autosave.
If you want to open the connected Allica savings account, you don’t get it automatically. You will need to do this in the app. It’s easy to do with a couple of clicks.
Which banks work with Chip?
- Bank of Scotland
- First Direct
- Lloyds Bank
- Marks & Spencer
- Ulster Bank
Changing your bank
You can only link one bank account to Chip and it’s a bit of a pain to change it. You just need to go into the live chat and ask them to cancel the connection to your current bank. But doing this will mean any money you have saved will be sent back to the initial account and you’ll have to start again
Chip promo codes
Since Chip started there have been a few different promo codes. First you could get up to 5% interest with a code, and then in 2019 and early 2020 there was a £10 bonus for signing up. Here’s the latest offer.
£20 Chip promo code for new users
The welcome offer can change, but right now a welcome bonus is available to newbies worth £20. You have seven days after signing up to enter your code.
To enter the code:
- Go to the profile tab
- Select “Promos and Rewards”
- Choose “Enter a code”
- Type in your code
Chip: £20 welcome bonus
The Autosavings app Chip is offering new customers £20 if they sign up with the code CLEVER20. You’ll need to then save at least £1 by 5 February 2022, and leave it in the account until 6 March 2022 when the bonus will be paid.
To avoid any charges make sure you select the free “Chip” membership tier. This is the default option when you sign up.
You’ll be able to earn 0.7% AER (variable) in the Allica account accessed via the app, and you can save up to £85,000 in there. From mid-January you’ll also be able to get access to the free AI autosaving feature which is a great way to top up your pot without any effort.
This code ends 5 February 2022 but will hopefully be replaced by a new one after this date.
Is Chip any good?
I’m a fan of the auto-savings feature so I’m delighted it’s free again to all Chip users. It can be a great way to boost your savings without any effort.
Though it works in the same way as Plum, it has the added advantage (for now at least) of offering a hard to beat interest rate. So I’d personally switch my autosaving over to Chip.
And it’s also a good destination for larger savings – though make sure you check out my top savings account guide first of all.
The main negative though is that it can take time for any deposits to clear in Chip and for withdrawals to reach your connected account.