Chip savings app review
The Chip savings app will connect to your current account and stash money away for you automatically.
Connect Chip to your current account and the app will use AI-powered algorithms to calculate how much you can afford to put away, without having an impact on your day-to-day life. You can leave it going in the background, and make some serious savings without (hopefully) feeling the pinch.
What's in this review?
- Who is Chip for?
- How does Chip work?
- Banks that you can connect to with Chip
- How to set up a Chip account
- How the app looks
- What is Chip+1?
- Is Chip safe?
- How much does Chip cost?
- Customer reviews for Chip
- Alternatives to Chip
- Pros and cons of Chip
- Our verdict
- Compare Chip against its competitors
- Frequently asked questions
Who is Chip for?
Chip is designed for people who may struggle to put money to aside if left to their own devices – and their own bad budgeting habits! By using artificial intelligence (AI) to work out how much you can easily afford to save, Chip will move small amounts of money from your current account into a Chip account at regular intervals (which you can control). The idea is that you won’t notice a dent in your everyday disposable income, but before you know it, you’ve created a little savings pot for yourself.
Chip is managed through an app, which is fee to download and use. But it does charge £1 if you save more than £100 with Chip in a 28-day period (more on this below). This means that Chip is best suited to people who want to save small amounts or would ordinarily lack the financial discipline to set money to one side each month.
How does Chip work?
Using Chip is simple, you can view and manage your savings all from its mobile app. This is how is works:
- Connect Chip to your current account. Chip will have “read-only” access to your current account via Open Banking (and your details are protected by 256-bit grade encryption – the standard for banks).
- Have your spending analysed. Chip uses artificial intelligence-powered algorithms to analyse your spending behaviour, and calculates how much you can afford to save based on your banking transaction data.
- Start building up savings. Chip autosaves money from your current account into your Chip account once every few days. If for some reason there is not enough money in your current account, then the autosave won’t go ahead – although there is the option to give Chip permission to continue autosaving while you’re in your overdraft (but Chip will remind you that you’re liable for any overdraft charges resulting from this).
- Check on your spending. Chip uses analytics to compare how your spending compares to the previous month. You can also check your savings balance at any point.
- Withdraw your money at any time. The total savings, or specific amounts, can be withdrawn at any time, with no restrictions. If you withdraw your money before 5pm on a working day, you’ll get it back on the very same day.
- Control your savings. You can cancel any transaction before it goes ahead and you can pause Chip altogether at any time. You can also ask Chip to increase or decrease the amount it stashes away automatically, as well as manually deposit money into your Chip account (to do this, click on “save” within the app and then select an amount up to £100).
Banks that you can connect to with Chip
- Bank of Scotland
- Danske Bank
- First Direct
- Lloyds Bank
- M&S Bank
- Ulster Bank
If your bank is not on this list – for example Metro Bank, Tesco Bank or Co-operative Bank – then you won’t currently be able to connect to Chip.
How to set up a Chip account
Here at Finder, we set up a Chip account to document the process and see how long it took. Within 5 minutes we had a fully verified account and were ready to start saving.
- Download Chip.
- Verify your identity providing your name, date of birth and your address.
- Provide your debit card details from your current account.
- You card will be charged a £1.01 fee to validate your account (this will be refunded within 3 days).
- Allow and grant Chip permission to connect to your own bank’s website or app automatically through the Open Banking protocol.
- You’re all set!
- Use the code FINDER20 to access Chip+1 where you can earn a market-leading bonus on your savings.
How the app looks
What is Chip+1?
Chip+1 is an additional account that Chip launched at the end of November 2020, which provides a 1.25% return on savings of up to £10,000. Chip says this is a market-beating return for easy access savings right now, although rather than being described as interest, the 1.25% will be paid out as bonus every 12 weeks. Money in these new accounts will be covered by the Financial Services Compensation Scheme (FSCS), as customer funds will be held in a trust account at ClearBank.
If you’re already a Chip saver, you can find Chip+1 in the “Accounts” tab in your Chip app. There are then two ways to get into Chip+1:
Once you’re all set up, you’ll be able to choose to autosave straight into your Chip+1 account.
Is Chip safe?
Chip is not a bank, but it is authorised by the Financial Conduct Authority (FCA) to provide payment services in the UK, which includes “e-money wallets”. Customer money held in a main Chip account is stored as e-money and is therefore not covered by the Financial Services Compensation Scheme (FSCS), which protects deposits of up to £85,000. But these funds are kept in a ring-fenced account at a major UK bank, which means customer money is stored separately from Chip’s own finances, and is protected should the company go bust.
It’s a slightly different story with the Chip+1 account, as customer money stored in one of these bonus-paying accounts is protected by the FSCS. This is because Chip+1 accounts are powered by ClearBank, a registered UK bank that is part of the FSCS scheme and is partnering with Chip to provide these new accounts.
When it comes to data, Chip has a data control licence. This means it is legally obliged to act in full compliance with the Data Protection Act. Your online banking login details are protected using 256-bit encryption and Chip does not store your data.
How much does Chip cost?
- There are no fees for opening or having a Chip account.
- Chip charges a £1 fee if it sets aside more than £100 for you during a 28-day period, meaning your maximum charge over one year could be £13. You can check in the app how close you are to your £100 limit during any given period.
- If Chip causes you to go accidentally overdrawn, it will deposit £10 into your account to cover any fees you’ve incurred.
- The deposit limit with Chip is £100 per day, six times per month (so a maximum monthly limit of £600).
- The minimum transfer is £1.
Customer reviews for Chip
On customer reviews platform Trustpilot, Chip as a company has 4.3 out of 5 stars and a rating of “Excellent”, based on more than 440 reviews.
The Chip app has 4.5 out of 5 stars based on more than 2,700 reviews on the Google Play store. On the App Store, Chip also has 4.5 out of 5 stars, based on more than 6,900 reviews.
Customers love how easy the app is to use and praise the good customer service, but many complain about the charges involved with some actions (updated December 2020).
Alternatives to Chip
If you have not enjoyed what you have read so far about Chip then there are a number of alternative apps. Below we have highlighted some and the features.
Plum – Standalone automated savings app
Plum is a standalone automated savings app that works similarly to Chip. It makes calculated withdrawals every few days based on your previous spending.
It offers up to 0.6% AER on its savings account. You can also put your savings into an investment fund, which has delivered an annual return of 8.51% over the last five years.
Plum gives you a lot of freedom to tinker with its algorithm. You can set it to “Ambitious” or “Beast Mode” if you want to save more, or “Shy” to save less. You can set Plum to round up your purchases and save the change, or even to save whenever it rains in the UK.
Just like with Chip, you can withdraw your funds at any time.
Moneybox – Savings rounded up to your nearest pound
Moneybox is another standalone savings app.
The main difference compared to Chip is that Moneybox rounds up all of your spending to the nearest pound. So, if you buy a coffee for £2.40, Moneybox will transfer 60p into your savings.
There isn’t as much flexibility here to choose how much money goes into savings, compared to Chip. However, the simplicity and certainty of this automation has made Moneybox very popular with UK consumers. More than 450,000 people are using Moneybox to help them save more regularly.
You have a lot of choice on what type of account you can transfer your savings into. You can choose a stocks and shares ISA, cash lifetime ISA, personal pension, general investment account or junior ISA.
Tandem – Mobile-only bank with automated savings
Tandem is a mobile-only bank that includes the opportunity to make automated savings.
You’ll earn 0.5% AER on money kept in its instant-access savings account. You can also withdraw or pause the automated saving whenever you like.
There are some “rules” that you can tweak depending on how much you want to save, but there isn’t as much flexibility as Chip.
Monzo – Managing money, rounding up and easy savings
Monzo is another online-only bank, and it gives you a lot of options for managing your money, including the ability to round up your purchases and transfer the money into a savings account. Monzo has partnered with various savings providers, meaning you have a choice of ISA or traditional savings accounts to deposit your money into.
Pros and cons of Chip
While there are many benefits of a Chip account, money moving automatically may be more suited to some than others. It’s important to consider whether the benefits suit you personally.
- Your money is held in an instant-access account.
- Chip enables you to gradually build up savings hassle-free.
- You have control over the automatic transactions. Deposits can be decreased, increased or cancelled before they go ahead.
- Live chat customer support 8am-5pm Monday to Friday.
- Option to open a Chip+1 account to earn a bonus on your savings.
- It isn’t possible to set up a standing order.
- You won’t earn interest on your savings in a general Chip account
- Larger lump sums cannot be deposited into the account. Deposits are limited to £600 per month.
If budgeting and saving effectively is a bit of a sore point for you, Chip can be a quick and potentially free solution – you won’t have to think about how much to put aside or when, because the app will do it for you. Ah, the joys of tech.
Chip doesn’t offer much in terms of budgeting features (for example, you can’t categorise your transactions), but you do now have the option of earning a return on your savings with the new Chip+1 account. However, the fee of £1 for saving more than £100 with Chip over a 28-day period means you are being charged to deposit funds of over £100 a month into your standard Chip or Chip+1 account (which could eat into that 1.25% bonus, even if it is currently at the top end of the instant-access earnings market). So if you’re planning to save large sums of money, a different type of savings account might be more cost-effective for you in the long run.
With Chip, you can set saving goals and achieve them without going through the trouble of doing the maths. There’s now also the option of earning a return on your savings with Chip+1. While it doesn’t offer too much else, Chip is a great app to improve your saving habits and put aside some money, be it to go on a well-deserved holiday or put together the deposit for a house.
Frequently asked questions
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