What is Chip and how does it work?
Chip is an automatic savings and investing app founded in 2016 by Nick Ustinov and Simon Rabin and has since amassed over 500,000 registered users. Chip's mission is to build the investment super app of the future and to 'build wealth for our generation'. 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 the investment platform BlackRock.
- Automatic saving - Chip uses AI to save automatically but does come with a small fee
- 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 - withdrawals can take up to 2 working days to arrive depending on which account you are trying to access
- Earn Interest - Earn interest on your money with Chip interest accounts
- Access savings instantly - Get up to 3.00% return on money held in a Chip Instant Access savings account* and deposit and withdraw money almost instantly.
- Earn up to £50 bonus for Chip Instant Access deposits - Users depositing money in the Chip Instant Access savings account can earn a bonus of up to £50 depending on the amount deposited. Users must enter an exclusive promo code which can be found here*
- Win Prizes - A chance to win up to £10,000. Get 1 entry for every £10 held in its Prize Savings account
- Invest - Chip has teamed up with investing platform BlackRock
- 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)||£0||£5.99 per month or £4.99 if paying annually upfront|
|Recurring savings fee||£0.25||N/A|
|Choice of Stocks & Shares ISA or General investment account||General Investment account only|
|Access to basic investment funds|
|Access to additional investment funds (e.g emerging markets or ethical funds)|
|Investment platform fee (collected monthly)||0.50% (£1 monthly minimum)||N/A|
|FSCS eligible savings accounts|
How much does Chip cost to download?
Chip is free to use and download from the Apple and Google Play stores. You will be automatically enrolled to the free plan by default but you can upgrade to the ChipX account for a £5.99 monthly fee. Chip says there may also be occasional administrative fees.
Saving with Chip
How does Chip analyse my spending?
You can save into 4 savings accounts with Chip and have the choice between an easy access, instant access*, 90-day notice and prize savings account. Chip users can also save automatically as 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.
How much does it cost to save with Chip?
It is free to download Chip but if you want to benefit from its autosave feature you will need to pay £0.45 per autosave. For example, if you autosave £10.50 only £10.05 will reach your bank account. Chip also charges £0.25 per recurring save and there is a 0.5% investment platform fee with a minimum of £1 a month.
Can I earn interest on my savings?
Yes, Chip offers 4 different savings accounts. It offers an easy-access savings account, an instant access savings account*, a 90-day notice account and a prize savings account that works in a similar way to NS&I Premium Bonds. We provide a summary of Chip's savings account below.
*The return on this account is 3.00% and paid as a bonus and not interest. The bonus is paid by Chip which is not a bank, therefore the return on your money is not FSCS protected but your deposits into the account are.
Investing with Chip
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.
You can invest with Chip via its Chip or ChipX account and we explain each of the accounts in more detail below.
Chip's basic free account gives users access to a general investing account where they can invest in a choice of three funds managed by BlackRock.
Chip fund choice
Chip's free account users can invest in any of the following funds:
- FTSE 100 index fund
- S&P 500 tech fund
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 also invest in any of the following funds, all managed by BlackRock:
- Clean Energy fund
- Crypto Companies fund
- Emerging Markets fund
- Physical Gold fund
- Global Companies fund
How much does it cost to invest with Chip?
Chip investment cost
Chip's basic account is free to download however if you choose to invest in the General Investment Account there is an annual platform fee of 0.50% (taken monthly). There is a minimum monthly platform fee of £1.00 and provided the balance in any investment fund is above £0.50, the platform fee will be charged. Chip also charges £0.45 for autosaves and £0.25 for recurring savings. Finally, Chip free users are charged a fund management fee, which is the fee that BlackRock charges to manage the fund. This is typically around 0.21%. Chip's free account only lets you invest in a General Investment Account which doesn't offer any tax-free allowances. Stocks and shares ISAs are tax-efficient so if you want to invest in a stocks and shares ISA you may wish to look at the ChipX account.
Chip investment fees (Total payable annually)
|General Investment Amount||Platform Fee||Fund management fee (assuming 0.21%)||Total fee (Not including autosave fees)|
ChipX investment cost
ChipX has a subscription fee which is charged at £5.99 every 28 days. Those choosing to pay annually can reduce these by a further £1, working out at £4.99 every 28 days. There is no annual platform fee with ChipX, unlike Chip's basic account. 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 0.21%)||Total fee|
Chip basic vs ChipX cost comparison
|Stocks and Shares ISA|
|Investment choice||2 funds||7 funds|
|Cost to invest £1,000||£14.10||£79.97|
|Cost to invest £5,000||£25.50||£88.37|
|Cost to invest £20,000||£142.00||£119.87|
Is Chip safe to use?
Money held in your Chip savings and investments accounts is covered up to £85,000 by the Financial Services Compensation Scheme (FSCS). Chip is regulated by the Financial Conduct Authority (FCA) and also boasts 128-bit encryption software to ensure your data is safe. Chip also connects to your bank account via open banking with Truelayer which means it does not see any of your personal login information.
Chip customer reviews
Chip currently has 3.8 out of 5.0 stars on Trustpilot from over 1,000 customer reviews. 70% 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'.
19% 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 also be downloaded as an app. 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.
Plum's basic savings accounts are not FSCS protected but like Chip, money held in a savings account that earns interest offers FSCS protection. You can earn interest on your savings with Plum up to 1.95% with Plum 'Pockets' compared to 3.00% with Chip's Instant Access Bank savings account*. You may wish to check out our savings 'best buy' tables for the best savings accounts.
For more information on Plum, read our 'Plum review'.
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 and invest in a general investment account. However, if you wish to invest in a stocks and shares ISA you will need to upgrade to ChipX at a cost of £5.99 every 28 days.
For more information on Moneybox, read our 'Moneybox review'.
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. 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
- Cannot set up standing orders to save
- Auto-saving costs £0.45
- Can take up to 48 hours for the money withdrawn to clear (depending on the account)
- Can currently only connect one bank account to Chip
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 and ChipX.
For the best savings account and Lifetime ISA deals at the moment go to the following links:
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