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? 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 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. You can read more about the charges for this further down the article.
October 2022 price changes
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?
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?
There are a handful of features 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.
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.
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.
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.
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.
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 1.1%, which is a variable rate held in an account with Chip’s partner Allica Bank. There’s also a 95-day notice account. There are much better ones available right now.
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.
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. The speed depends on the account.
Sadly it isn’t instant for the easy access account. 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.
For the Prize Saver withdrawals are instant, though if you win a prize you need to take all the money out to access it.
Remember there are only two free withdrawals a month. So to avoid £1 charges beyond this you need to plan when you take your cash out.
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.
Chip Membership levels
There are two options that 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. However, as detailed there could be additional charges, depending on how you use it. With this you get:
- Access to savings accounts
- Auto savings (additional fees are charged)
- Basic investing options (additional fees are charged)
There is a £5.99 fee for this, charged every 28 days (so you pay 13 lots in a year, not 12). It’s reduced to £4.99 if you pay annually. This gives you access to advanced investing functions.
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
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 as a way to maximise earnings on savings. Does it perform? In the past Chip has offered high-interest rates, but the ones currently on offer can easily be beaten. So even straight deposits are better off elsewhere. I can’t see the Prize Saver being a worthwhile alternative either.
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.
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. From January to April 2022 there was also a £20 welcome offer.
To enter a code:
- Go to the profile tab
- Select “Promos and Rewards”
- Choose “Enter a code”
- Type in your code
Chip: £20 welcome bonus (expired)
The Autosavings app Chip is offering new customers £20 if they sign up with the code CLEVER22 before 29 April 2022. You’ll need to then save at least £1 by 7 May 2022, and leave it in the account until 7 June 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.