Chip App Review 2024 (2024)

Chip app at a glance

Chip is a digital savings and investment app, founded in 2017 with the help of crowdfunding. It is not a bank but it is fully regulated by the Financial Conduct Authority (FCA) and has around half a million active accounts.

Customers can open and manage their account through the app and it is linked to their main bank account via open banking communications technology.

Chip offers four savings account options: instant access, easy access, a cash ISA and a ‘Prize’ savings account that offers the chance to win up to £75,000 each month. It also offers investment accounts and a stocks and shares ISA. Savers can get started with deposits from just £1 and invest up to a maximum of £250,000.

The Chip app offers an artificial intelligence (AI) tool called autosave via the app. It’s built on an algorithm which analyses a customer’s spending habits and bank balance and estimates how much they can afford to save or invest.

Chip’s autosave function then automatically transfers small quantities of money on a regular basis into the relevant accounts. The idea is that savers don’t miss the small amounts of money leaving their account – and it doesn’t impact their budget or spending – but over time their savings or investments will build up.

Chip membership plans

Chip offers two membership options: a free to use ‘Basic’ plan, and the paid-for ‘ChipX’ plan.

Chip Basic

This plan offers access to all of Chip’s savings accounts, plus its General Investing Account and Stocks & Shares ISA.

Although there’s no monthly fee, you’ll be charged 45p for each Autosave transaction, and 25p for each Recurring save transaction.

If you invest through the app, there’s also a platform fee of 0.25% (minimum £1 per month), and you can only access five funds (the FTSE 100 index fund, S&P 500 tech fund and three Blackrock all-in-one portfolios at varying risk levels).

ChipX

In exchange for a fee of £5.99 per month, ChipX customers can access all investment funds available through the platform (more on this below.)

ChipX members can also use the Autosave and Recurring saves features free of charge, and don’t pay any platform fees when they invest with Chip.

Along with these benefits, they receive access to the same savings products as Chip Basic customers.

What interest rate is paid on savings deposits?

Chip offers four deposit savings accounts:

• Instant access – 4.58% AER variable (paid monthly). With this account you can withdraw and pay in money instantly. You can deposit up to £1 million, but only the first £85,000 will be covered by the Financial Services Compensation Scheme (FSCS). If you refer a friend and you both deposit at least £5,000, you’ll both receive a 0.26% AER boost for 90 days, taking the account rate to 4.84%
• Cash ISA – 4.84% AER variable (paid monthly). Money can be added or withdrawn at any time. As an ISA, and interest earned is not liable for tax. Transfers are also accepted from existing cash ISAs
• Prize Savings Account – offers the chance to win a prize of up to £75,000 each month. Every £10 held in the account equates to one entry into the monthly prize draw. To be eligible for the draw, you’ll need to maintain an average balance of at least £100. There is one grand prize (£75,000) in each draw, plus one £10,000 prize and 250 £10 prizes. Deposits and withdrawals from the account are instant and penalty-free
• Easy Access Saver – 4.84% AER variable (pid monthly). This includes a bonus rate of 0.77% AER, which drops off after 12 months. The underlying interest rate moves in line with the current Bank of England Bank Rate, minus 1%. There’s no minimum opening deposit, and savers can make three penalty-free withdrawals each year. From the fourth withdrawal, the interest rate drops to 3.74% AER if the bonus rate is still in effect, or 2.79% AER if the bonus rate has expired.

*Savings rates are accurate at the time of writing (September 2024), but rates are variable and subject to frequent change.

What fees and charges apply with Chip?

There are no monthly or annual fees on any of Chip’s deposit savings accounts. But if savers want a regular recurring saving amount there is a 25p per save charge, and the autosave feature (which uses AI) charges 45p per save transaction.

The charges could be disproportionately high if you are only saving small amounts.

As mentioned earlier, there’s also a monthly fee of £5.99 if you upgrade to ChipX. This membership can be added or removed from the account at any time.

How does Chip’s investment account work?

Chip offers two investment account options:

• General investment account (GIA)

• Stocks and Shares ISA (ChipX customers only)

Both accounts allow customers to invest from £1. Customers on the fee-free plan pay a platform fee of 0.25% (minimum £1 per month) to invest. However, ChipX users do not pay any platform fees.

Selection of investments

ChipX customers can choose from a selection of 19 funds. These funds range in theme, focusing on a specific sector, geography, or stock market index.

Users on the free plan, however, can only choose between two tracker funds.

Fund management fees vary, but you can expect to pay between 0.15% and 0.20%.

What are the benefits of the Chip app?

Chip’s instant access saver account saves the research and time of moving money around to get the best interest rates, as it seeks out the best providers with market-leading deals for all its customers.

The autosave and savings goals features may also appeal to time-poor consumers who can rely on the AI technology and automation to ensure they’re saving as hard as possible.

The autosave and recurrent saving features have charges for both savings and investment accounts, but these functions can be paused or stopped at any time.

There are platform charges for investors who use the free Chip plan, though this is waived for ChipX customers.

All Chip savings and investment accounts are covered by the Financial Services Compensation Scheme (FSCS), which gives up to £85,000 protection per person (not per account) in the event the provider goes bust.

Who is the Chip app suitable for?

If you’re someone who struggles to save regularly, the Chip app could help remove some of the planning and discipline needed to build up a good savings habit. It also offers consistently competitive cash savings rates.

But this comes at a cost. The autosave AI feature, which Chip prides itself on, carries a 45p per save charge. And, as autosave can typically take money from an account holder’s bank every four days or so to put into their Chip savings pot, the fees could soon mount up.

The premium investment offering, ChipX could appeal to those who want to invest in alternative assets, such as cryptocurrency and gold funds, and on the plus side there are low platform charges and an ISA option is available. But investors must pay around £65 a year for the service.

The basic investment account has no monthly or annual charge but does charge a platform fee, and offers a more limited range of funds.