In this Chip app review, I’ve taken a detailed look under the hood of this automatic saving app which claims to make saving easy and accessible to everyone, regardless of your current financial circumstances.
Saving money doesn’t always come naturally to everyone, however, a new generation of saving apps are using artificial intelligence to analyse your income and spending habits in order to help you squirrel away money without even noticing it.
Having thoroughly tested this method of saving over a considerable period of time, I can confirm that it is an effective and painless way to put money aside, but that being said, Chip isn’t the only saving app on the market so I’ve taken the time to test this offering against its main competitors to find out if Chip’s 300,000 users have chosen the best saving platform available.
Following my conversation with customer service, as well as my foray into the app itself, I am under the impression that this saving platform is still very much in the development stage. One of the accounts they offer is currently unavailable, and information on their website is out of sync with the app itself. Whilst I always approve of platforms that are continuously improving their service, it didn’t feel like Chip had managed a seamless transition, and the lack of cohesion or continuity only served to knock my confidence in the product itself.
That being said, I would encourage you to read my entire Chip app review, in order to obtain a completely impartial account of the savings app and whether it would be a good option for you.
How Does The Chip App Work?
Chip works by connecting to your main bank account, where it analyses your income and expenditure and automatically takes small and seemingly unnoticeable, amounts of money, out of your bank account and stores them securely in your Chip account. The act of connecting to your main bank account takes around 60 seconds, but you will need to have your bank app already installed on your smartphone device. Chip will automatically link to your banking app, meaning you won’t need any of your online banking login details.
Once this is complete, Chip will use your transaction history in order to identify small amounts of money that can be taken out of your account to help you save money. This will happen every four days unless Chip decides that there are inadequate funds in your account, in which case the automatic saves will not go ahead. You will also get notifications of any saving activity before it happens so you can easily cancel before the transaction takes place.
There is also the option to set savings goals and Chip will automatically assign funds to these goals where you will easily be able to track your progress. You have the ability to set several of these goals, whether it be a car or holiday, and Chip will effectively help you painlessly reach these goals.
In order to take advantage of this great autosave feature, you need to have the ChipAI plan.
There are two Plans on offer at Chip:
After speaking with a Chip customer service representative, it became clear that there are several changes currently taking place at Chip which I will go into in more detail in this review.
You can also see how the Chip app works in the following 60 seconds video below.
Chip Product Range Overview
Chip offers savers the following products to help generate great saving habits:
1. Chip+1 Easy Access Savings Account
Chip+1 is the savings account that Chip claims is offering market-leading interest at 1.25% on funds up to £10,000 using the ChipAI plan at a cost of £1.50 for every 28 days.
In order to access the Chip+1 account, the Chip website states that you need to recruit a friend. However, customer service have informed me that the plan is to roll this option out to all Chip users regardless of the referral program. That being said, as of May 2021, this option wasn’t available to all customers, and you would still need to refer a friend in order to skip the queue and obtain access to this account.
2. HTB Bank Account
There is little to no information on the HTB account on the Chip website and with good reason. With enough digging around I managed to discover that this account pays interest at a rate of 0.3% AER which is fairly unremarkable in the current climate. This account is in partnership with Hampshire Trust Bank and all your funds are held in a trust account with them. However, HTB are no longer accepting deposits into this account which is paramount to say, that whilst it’s there on your Chip dashboard as an option, you will be unable to select this as the account of your choice.
3. Instant Access Chip Account
This is currently the only account that can be accessed with Chip outside of the referral program. As you can see it offers nothing in the way of interest and in order to utilise the auto-saving feature offered at Chip, you would be forced to pay an account fee of £1.50 every 28 days. Whilst the autosave feature is a handy little tool, and you will almost certainly end up with a little pocket of savings, at Plum you would be able to access the exact same auto saving feature, without the account fee.
NEW – Allica Bank Easy Access Savings Account
As of August 2021, Chip have launched their new easy-access savings account with an AER of 0.70% with FSCS protection for your funds. Interest is paid daily, so you can take advantage of compounding and you can access your funds whenever you like.
This is a decent interest rate at the moment, and Chip have suggested there are more savings accounts to come.
Chip Payment Plans
ChipLite is the free plan. You can earn a great interest rate of 1.25% on funds up to £2,000 using this plan and the great thing is that it is completely free of charge, however, that is where the good news ends. This plan offers nothing in the way of autosave features and in fact, offers little more than traditional savings accounts in which you would have to manually save money.
This is the plan that unlocks the autosave feature, at a cost of £1.50 per 28 days. You will still be taking advantage of the 1.25% interest rates but this time on funds up to £10,000 and there are a few other features such as the ability to automatically put aside funds on payday. Chip AI also provides access to the investment funds offered at Chip, however, this comes with its own cost of 0.75% platform fee in addition to the account fee.
Chip have partnered up with BlackRock in order to provide their investment offering, however, whilst you are led to believe from their marketing materials that this is currently available, the only option at present is to register your interest.
It’s important to note that you cannot use the autosave feature directly into your investments, and you can’t move money from your Chip savings account, into your investments. Currently, the only way to fund your investment account at Chip is to move your savings back into your linked bank account, and then fund your Chip investment account from there. This seems overly complicated and not quite as streamlined as we would like from an offering of this nature.
Chip are currently offering three portfolios with varying risk levels to suit your appetite. BlackRock have a great past record with their funds so there is little need for concern here. Three funds isn’t exactly a huge choice for investors, however, some people may be grateful for the simplicity of this offering. I would have liked to have seen some options for ethical investments or something like the 12 funds currently on offer at Plum.
It is important to note that Chip does not offer any financial advice and investing is entirely at your own risk. The value of your investments can go up as well as down and you may not get back the original amount you invested.
Chip Savings App Review
The Chip app is slick with a modern interface and great usability. One of the things that really stood out for me when using the Chip app was that security was an optional extra that you have to manually set yourself from within the Chip app and not part of the onboarding process. Given that Chip links to your main bank account, I would have been more comfortable knowing that this was an automatic part of opening an account with Chip. That being said you can opt to have both a passcode and biometric authentication as security measures.
Once you have downloaded the app Chip will start doing calculations on how much money you can afford to save, assuming you are paying for the plan that allows automatic saving. If not you will need to manually deposit money into your Chip savings account.
Chip Customer Service Review
Customer service was frustratingly slow at Chip. Upon making contact via live chat, I was quickly informed that the typical waiting time for a response was one day. They did on occasion get back to me sooner than this, however, it was still off par with other providers and some of the information I received was copy and pasted and out of date with recent developments to the service provided. I felt Chip have really let themselves down in this regard.
Opening a Chip Account
Downloading the Chip app and linking to your bank account takes moments with Chip, however, they do now ask for your debit card details first, and will take a small payment (£1.01) which is refunded to your card at a later date. They claim this is to support instant saves and withdrawals, however, other saving apps such as Plum are able to do this without the debit card details so this seemed like an odd addition to the process here.
Firstly, Chip are offering all new customers a free trial period of their ChipAI plan for the first 28 days of opening your account. After this time you will start to incur a cost of £1.50 every 28 days in order to continue using the autosave feature. In addition to this cost, should you decide to utilise the Chip investment funds, you will incur an additional platform cost of 0.75% of your investment amount.
Whilst none of these sound like significant costs, a flat fee such as the ChipAI £1.50 can soon start to erode away at any gains you might make from the 1.25% interest rate. Of course, the full impact of this is heavily reliant on the value of the funds you hold at Chip, however, it is safe to say that small pots will feel the brunt of this fee more keenly.
It is also worth noting that Chip charge a withdrawal fee of £0.50 should you withdraw more than once in any 28 day period.
Which is Better Chip or Plum?
Having used both of these offerings it is my view that Plum is currently the better savings app available for the following reasons:
- Plum allows you to access automatic savings free of any charges.
- Plum currently has access to 12 investment funds offering a greater scope of choice.
- Outside of the free account, the premium Plum account comes at a cost of £1 per month, compared to Chip’s premium account which costs £1.50 every 28 days and currently requires you to refer a friend.
- Plum can link to more than one current account.
- Plum also offers users the ability to save extra using roundups.
- Chip charges a withdrawal fee of £0.50 should you make more than one withdrawal in any 28 day period.
That being said it would be wrong not to point out that the Chip interest account earns 1.25% compared to Plum where the maximum interest is 0.40%.
Chip App FAQs
How safe is Chip?
Given the link to your current account, it is important that Chip provide a level of security that you can rely on. In this respect Chip have you covered with complete cover by the Financial Services Compensation Scheme, earning you a guaranteed return of £85,000 on any money held within your Chip interest accounts and Chip +1 account should something go wrong. In addition to this, funds held in your e-money wallet are safeguarded with Prepaid Financial Services Limited.
Chip is now also authorised and regulated by the Financial Conduct Authority.
How do I withdraw money from my Chip savings pot?
Withdrawing your money from your chip account can be done from the ‘Accounts’ tab in the app.
How long does it take to withdraw money from Chip?
The length of time it will take for your withdrawal to take place will depend on the type of account you have. However, instant access account holders can expect to receive the withdrawal into their current account on the same day, provided you have requested the withdrawal before 5.50 pm on a weekday. Chip+1 withdrawals take 3 working days to complete.
How does chip work out how much I can afford to save?
Chip uses artificial intelligence and complex algorithms to work out exactly how much you can afford to save without placing too much pressure on your finances. You have the option to manually pause or stop your saving activity so ultimately, the control is still in your hands.
Which banks can Chip connect to?
Chip can connect to most high street banks including; Barclays, Co-operative Bank, First Direct, Metro Bank.
For a full list of supported banks please visit the Chip website.
Can I save extra into my Chip account?
Yes, there is always the option to manually transfer money from your bank account into your Chip savings accounts. You can do this as often as you like should you wish to give your savings a boost.
Can I link a new bank account to my Chip account?
Currently, Chip only supports the linking of one account, although they claim adding the ability to link more than one account will be coming soon.