What is Chip and how does it work?
Chip is an automatic savings app founded in 2016 by Nick Ustinov and Simon Rabin. It is designed to help make saving money as easy as spending money. Over 250,000 people currently use Chip to save and there is a ChipMunk community page on Facebook where users can share their ideas for the app's improvement. Chip uses artificial intelligence (AI) to calculate an affordable amount that can be saved automatically without affecting your usual day-to-day spending habits. Chip works by connecting to your bank account via Open Banking. Chip also allows users to invest via the app and has teamed up with investment platform BlackRock.
£10 cashback offer with ChipAI
Chip has partnered with Allica bank to offer its customers a market-leading easy-access account that pays interest of 0.70%. In order to access the market-leading savings rate, Chip users are required to sign up for the ChipAI plan at a cost of £1.50 every 28 days. However, Money to the Masses has secured a £10 cashback bonus which covers the fees for ChipAI for 6 months. Simply download the Chip app, select the ChipAI account and ensure that you use the code 'MASS10'. Then, so long as you have saved at least £1 by 21/10/21 (and remain an active ChipAI customer), you will receive the £10 bonus on 21/12/21.
Those interested in investing with Chip may want to check out our £20 cashback offer below.
- Automatic saving - Chip uses AI to save automatically
- Spending analysis - By analysing your spending Chip can save amounts automatically
- Set savings goals - Track how well you are doing towards achieving your goals
- Easily withdraw your money - (Same day if requested before 5pm or next working day if requested after 5pm or on a weekend)
- Earn Interest - Earn interest on your money with Chip interest accounts
- Invest - Chip has teamed up with investing platform BlackRock.
- Save streaks - see how long you have gone without missing an automated save and even predict how much you could have saved in a number of 'saves' time
- Payday Put Away - pay yourself first each payday by setting a regular amount to save every time you get paid
- FCA regulated - Chip is regulated and authorised by the Financial Conduct Authority
- FSCS protection - your money is protected up to £85,000 in a Chip Interest or Investment account
In the below comparison table we compare the different Chip accounts.
|Cost (payable every 28 days)||Free||£1.50 (28-day free trial)||£3.00|
|Unlimited manual deposits|
|Payday Put Away|
|Choice of Stocks & Shares ISA or General investment account|
|Access to Cautious/Balanced/Adventurous BlackRock investment funds|
|Access to additional investment funds (e.g emerging markets or ethical funds)|
|Investment platform fee (collected monthly)||0.75% (min £0.50)||0.25% (no minimum)|
|Priority access to new features|
How to connect to Chip
Once you have downloaded Chip you will be asked to provide your name, D.O.B and address for your identity to be verified. Once verification has taken place (this only takes a few seconds) you are asked to connect your bank via Open Banking. You will be directed to your banking app to log in and approve Chip's access to your account, logging in with Open Banking will not share your account passwords with Chip. Your card will be charged £1.01 which will then be refunded within 3 days.
Currently, you can only connect one bank account to Chip however Chip says it is working to change this in the future. If you need to change your bank account you can do this by contacting someone through LiveChat via the Chip app. Chip will close down your current bank connection and will need to refund any money in your Chip account in order to satisfy money laundering regulations.
Which banks are supported by Chip?
- Bank of Scotland
- First Direct
- Lloyds Bank
- Marks & Spencer
- Starling Bank
- Ulster Bank
If your bank isn't on the above list then, unfortunately, you cannot connect to Chip at this time.
Saving with Chip
How does Chip analyse my spending?
Chip analyses your spending using artificial intelligence (AI) and looks at your previous spending history. It does this by checking your transaction data that it has access to via Open Banking. If you are unable to connect via Open Banking and instead have to manually connect, Chip generates a suggested autosave amount via analysis collected from transaction data from its current users.
Chip autosaves money into your Chip account every 4 days. You can adjust the save level and there are 5 levels to choose from so you can choose to save money at a slower pace or faster if you want to save more. Chip may decide on some occasions that there is not enough money in your account and if this is the case, the autosave may not go ahead. You also have the opportunity to adjust and approve autosaves before your money is moved and if you don't want to save money altogether you can also choose to skip the save. Chip learns from your habits and will tweak its autosaves depending on your saving habits.
There is an overdraft feature with Chip that allows you to continue to contribute to your savings pot even if your current account is in the red, however, Chip will remind you that you are liable for any overdraft charges. Saving while in your overdraft can be turned on and off at any time. (Overdraft saving is only available with accounts that are 'fully connected' to Chip with Open Banking).
Chip advises it is important to keep the app up to date to avoid any issues with autosaving. If you would like to manually deposit money into your Chip account, you can do so by clicking on 'save' and then selecting the amount.
Can I earn interest on my savings?
Your money with a regular Chip account is saved as 'e-money' which means you cannot earn interest as it isn't an official savings account. However, in September 2021 Chip introduced a market-leading easy-access account that pays interest of 0.70%. Chip users will need to sign up to the ChipAI plan at a cost of £1.50 every 4 weeks in order to get access to the account. Money to the Masses readers can however get £10 cashback when they sign up via this offer, effectively making it free for the first 6 months. Simply enter the code 'MASS10'.
Money held in a Chip interest account is FSCS protected. Chip is currently only offering one interest account but hopes to add more rates and providers soon.
Investing with Chip
You can invest with Chip via its ChipAI or ChipX account and we explain each of the accounts in more detail below.
If you choose to invest with Chip you can invest with as little as £1 and you will need your National Insurance number to sign up. You cannot yet currently auto-save into a Chip investment account, but Chip says this is something it is looking into for future versions of the account. In order to invest with Chip you will need to move the money directly from your connected bank account into your Chip investment account, you cannot move the money from any of your Chip cash accounts. If this is something you would like to do, you will need to withdraw the money from your Chip account and then move it from your connected bank account.
The money in a Chip investment account is held with Seccl Custody Limited and they are responsible for holding your cash and investments.
ChipAI gives Chip users access to a general investing account where they can invest in a choice of three funds managed by BlackRock.
ChipAI fund choice
ChipAI users can invest in any of the following funds:
- BlackRock Cautious
- BlackRock Balanced
- BlackRock Adventurous
ChipAI has a subscription fee which is charged at £1.50 every 28 days. In addition, ChipAI users will be charged an annual platform fee of 0.75% (taken monthly). There is a minimum monthly platform fee of £0.50 and provided the balance in any investment fund is above £0.50, the platform fee will be charged. Finally, ChipAI users are charged a fund management fee, which is the fee that BlackRock charges to manage the fund. This is typically around 0.22%.
ChipAI investment fees (Total payable annually)
|Investment Amount||Subscription fee||Platform Fee||Fund management fee (assuming 0.22%)||Total fee|
In addition to its general investment account, ChipX* gives Chip users access to a Stocks and Shares ISA, meaning users can invest their money in a tax-efficient way. ChipX also gives Chip users access to a greater choice of investments, detailed below.
ChipX fund choice
ChipX users can invest in any of the following funds, all managed by BlackRock:
- Clean Energy
- Healthcare Innovation
- Emerging Markets
- Expert Managed Cautious
- Expert Managed Balanced
- Expert Managed Adventurous
- Ethical X
ChipX* has a subscription fee which is charged at £3.00 every 28 days. In addition, ChipX users will be charged an annual platform fee of 0.25% (taken monthly). ChipX is currently offering a £20 bonus to new users that sign up via this link* (capital at risk). Unlike ChipAI, there is no minimum monthly platform fee. Finally, ChipX users are charged a fund management fee, which is the fee that BlackRock charges to manage the fund. This ranges from 0.17% to 0.97% depending on the fund you are invested in.
ChipX investment fees (Total payable annually)
|Investment Amount||Subscription fee||Platform Fee||Fund management fee (assuming 0.22%)||Total fee|
ChipAI vs ChipX
|Stocks and Shares ISA|
|Investment choice||3 funds||7 funds|
|Cost to invest £1,000||£29.20||£43.70|
|Cost to invest £5,000||£92.27||£62.50|
|Cost to invest £20,000||£213.50||£133.00|
Is Chip safe to use?
Chip automatically saves your money into a separate account within the Chip banking app. Customers' money is currently saved in a Barclays ring-fenced account and is stored as e-money. You can have up to three savings goals with Chip (Chip recommends setting up short, medium and long term savings goals) and you can allocate a percentage of your autosave to go to each goal. This, however, is entirely up to you as the saver and you can save as much as you like for each goal or just one goal.
Money held in your main Chip account is not covered by the Financial Services Compensation Scheme (FSCS) however it is an appointed representative of the e-money firm Prepaid Financial Services (PFS) Ltd, which is regulated by the Financial Conduct Authority (FCA). Chip says that PFS store your money in a ring-fenced Barclays account which therefore means it is not used for any trading activities. Chip also boasts 128-bit encryption software to ensure your data is safe.
If you hold money in an interest or investment account with Chip, your money is protected up to £85,000 by the FSCS.
How much does Chip cost?
Chip is free to use and download from the Apple and Google Play stores. You will automatically be enrolled on a free 28 day trial for the ChipAI plan. Once the trial has ended you will be charged £1.50 every 28 days. Alternatively, you can upgrade to ChipX* at a cost of £3.00 every 28 days. New ChipX users can get a £20 bonus if they sign up via this link* (capital at risk). If you do not wish to pay the monthly fee of £1.50 you can easily downgrade to Chip Lite but you will not be able to take advantage of Chip's auto-saving feature.
Chip says there may also be occasional administrative fees and currently a £5 fee applies every 28 days if you have any amount of money over £0 in your old e-wallet. To avoid the admin fees you will need to withdraw any money from the e-money account. Chip says it is in the process of closing the old e-money accounts and replacing them with savings accounts that have FSCS protection. Chip says that anyone whom this charge applies to has already been informed and once the balance in your e-wallet reaches £0 the account will be closed.
Chip customer reviews
Chip currently has 4.1 out of 5.0 stars on Trustpilot from over 800 customer reviews. 72% of those have rated the app as 'Excellent' saying it is 'a really easy and effortless way of saving money'. Customers also say that they have 'saved far more money than I ever would normally'.
16% rate the Chip app as 'Bad' and most refer to experiencing issues when it comes to withdrawing the funds. There are numerous reviews mentioning technical problems when it came to withdrawing the money they had saved with Chip.
Alternatives to Chip
There are various alternatives to the savings app Chip and we summarise a few of those below. For more information on savings apps available in the UK at the moment visit our article, 'The best savings apps in the UK'.
Chip vs Plum
Plum is another app that uses AI to track users spending habits and like Chip, it can be downloaded as an app but it can also be used via Facebook messenger. Plum allows you to adjust your automatic saving amount depending on your saving 'mood' which can also be done on Chip by speeding up or slowing down your AI saves.
Both Chip and Plum are appointed representatives of an FCA registered company but neither are covered by the FSCS themselves for their basic accounts (you may have FSCS protection with some of the saving and investment accounts). You can earn interest on your savings with Plum up to 0.40% with Plum 'Pockets' compared to a 0.70% with ChipAI. You may wish to check out our savings 'best buy' tables for the best savings accounts.
Chip vs Moneybox
Moneybox is another app that helps you to automatically save your money, however it goes one step further in that it invests the money it saves for you. Moneybox rounds up your spare change when spending and invests it automatically on your behalf. This comes at a cost however as Moneybox charges a monthly fee of £1 as well as additional investment costs such as platform fees. Chip is currently free to download and save for 28 days and once your free trial expires you will be switched to ChipAI which is £1.50 every 28 days. Alternatively, you can upgrade to ChipX at a cost of £3.00 every 28 days.
In comparison to Chip, Moneybox is FCA registered and any money held with chip is protected by the Financial Services Compensation Scheme (FSCS). Money held in the main Chip account is held as e-money and is not covered by the Financial Services Compensation Scheme, however it is safeguarded in a 'ring-fenced' account. Any money held in a Chip investment account (ChipAI and ChipX) is covered by the Financial Services Compensation Scheme.
Chip vs App-only Banks
A lot of the app-only banks on the market such as Monzo and Starling offer solutions to help you save (similar to Chip), such as savings goals and automatic saving. Monzo and Starling Bank also offer a round-up feature that saves your spare change which you can set aside into dedicated savings pots.
Monzo and Starling are banks and are therefore registered and regulated by the FCA. They also offer protection on up to £85,000 of your money under the Financial Services Compensation Scheme.
You can find out more in our article, 'The best app-only banks in the UK.'
Pros and cons of Chip
Pros of Chip
- Easy to set up
- Analyses spending
- Set savings goals
Cons of Chip
- No FSCS protection (unless you have an interest/investment account)
- Cannot set up standing orders to save
- Can take up to 48 hours for the money withdrawn to clear
- Can currently only connect one bank account to Chip
- £5,000 saving limit on interest accounts
- Have to pay £1.50 to take advantage of the AI saving features
Overall, Chip offers an automated solution and can be good for those that struggle with saving. Chip can be good for both short term savings goals such as a new coat or towards a holiday as well as long term savings goals such as a house deposit using its savings and investment accounts ChipAI and ChipX.
For the best savings account and Lifetime ISA deals at the moment go to the following links:
If a link has an * beside it this means that it is an affiliated link. If you go via the link Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. But as you can clearly see this has in no way influenced this independent and balanced review of the product. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Chip