I noticed in one of your Snoops, a recommendation for Chip autosaving app.
The writeup suggested if you kept your autosaves to less than £100 a month then there was no charge. Should you save more than 100 a month you’d be charged £1.50
On checking, this would seem to be wrong.
You’re charged once you’ve autosaved more than £100 in total.
By my reconning you’d need to be autosaving more than £240 a month just to cover their £1.50 charges
You can manually add money to any amount without charge but then I think you only get their 1.25 interest on the first 2000.
Chip currently offers 2 membership types – ChipAI and ChipLite:
The ChipAI plan gives you access to Chip’s AI auto-saving feature, which works out how much you can afford to save, and automatically moves this for you from your connected bank account to your Chip account. The ChipAI plan gives you access to the Chip+1 account and the 1.25% rate on balances up to £5000. This plan is available on a free trial which lets you auto-save up to £100 for free – after this, the ChipAI account costs £1.50 every 28 days.
Users can downgrade to Chip’s free plan - ChipLite, at any time. You’re absolutely right about this plan – their Lite plan also gives access to the Chip+1 account but only offers the 1.25% rate on balances up to £2000, however ChipLite is free. ChipLite doesn’t include the AI auto-save feature, but you can manually move money into this account.
If you’re looking to save over £3,600 across the year, the extra interest you earn will cover the fee of the Chip AI account, otherwise:
Saving up to £2k? Opt for the free version. (You get a free trial of the paid version, but you can upgrade or downgrade anytime in your settings).
Got between £2k and £3,575 to save? You’re better off saving the maximum with the free plan (£2,000) and saving the rest elsewhere as the fee you pay won’t be covered by the extra interest you earn.
Got between £3,575 and £5,000 to save? Take the paid plan as the fee you pay will be covered by the extra interest you earn.
If you’re interested in signing up to Chip, make sure to use Snoop’s VIP code as this is needed to unlock access to the Chip+1 account and the 1.25% savings rate!
So you have to save over 3600 before you actually start earning money? Surely there’s better options for savings? What you need to compare is the next best savings account and find out what level of savings you need before chip makes you more money.
It’s Archna here from the editorial team. I thought I’d jump on and explain our thinking.
First of all the 1.25% is significantly higher than the easy access savings available right now.
As Laura mentioned above there are two plans you can sign up to with Chip - the free one which pays you 1.25% on anything up to £2,000 and the one that costs £1.50/mth which pays 1.25% on balances up to £5,000. (When you sign up to Chip you’re automatically put on the paid plan, though charges only kick in after you’ve auto saved £100 and you can downgrade in the settings).
If you saved £2,000 you would earn £25 across the year (based on 1.25% interest)
If you saved £5,000 you would earn £62.5 across the year (based on 1.25% interest)
But in order to earn 1.25% on a balance of £5,000 you have to pay £1.50/mth or £18 across the year, so you’re gain becomes £44.50 when you factor in the fees.
So we’ve calculated that the sweet spot in terms of deciding whether to pay for Chip + or not is if you have above £3,575 to save. If you have this amount or more the extra interest you’d get with Chip vs a different account (at say 0.5%) even after you factor in the fee would be more than you’d get elsewhere.
If you have between £2,000 and £3,575, you would be better off using Chip for the first £2,000 (for free) and then using another savings account for anything up to £3,575. Given where savings rates are and because Chip is so much better than what’s out there, this would be the geekiest way to maximise interest.
The recommendation initially gave the impression that you only got charged if you autosaved over 100 each month. But it’s basically £1.50 a month come what may. You’ve altered the description better now but it still doesn’t explain about the sweet spot etc
As its designed to be a “sneak a few quid away each week that you won’t notice” style app, it’d take years before you hit the sweet spot. Meanwhile you’d never be anywhere near £18 in interest. Oh and it’s actually £19.55 a year fees as they’re every 28 days not once a month.
So, it’s good as a manual savings option. And it’s good for autosaving once over the sweet spot but it’s abysmal for autosaving tiny amounts initially.
Yes, you’re totally right. If you want to use the autosave AND have less than £2,000 you won’t be maximising the interest.
I guess we’re trying to suggest you don’t go for the paid version if you have less than £2,000 - i.e. don’t autosave but I’m going to have a think about how we can tweak further to make the manual vs autosave point clearer. While autosaving is a big feature in the Chip app, it’s actually the manual functionality that works best for this deal as you say. Thanks for the feedback, really appreciate it!
A simple note that, although chips main selling point is autosaving, and you’ll be put on autosaving by default, unless you have £3600 handy to boost your balance, you should immediately move to the manual only tier. Staying on high tier and just turning off autosave doesn’t work, you still get charged.
What I’ve done is utilise Plum to autosave and set it at highest level of autosaving. Then once a month empty plum and add it to Chip. That way I’ll never have fees but get better interest. Once chip is at 2000 I’ll look for another account / just leave gaining plums rate until I hit sweet spot. I’m saving about 100 a month using autosave so won’t have to panic for a long time yet
It should be noted that if you withdraw anything you lose the ‘bonus’, or certainly the bonus for that period or cycle.
I suppose it depends on the linked external account, but in my experience the auto save amounts were tiny (£2/3), even though there are 5 (?) levels to choose from.
I suppose it depends on what it feels is “spare” to autosave, but the “bonus” from Plum is tiny amount of interest. Chips is much more. So the sooner its in Chip the better IMHO. So long as your not paying Chips fees
Sorry, but you are wrong about Chip. It can be better than you make out! I followed the recommendation nearly 3 months ago and moved £5000 from an account paying 0.5% into Chip+. I expected to only get the equivalent of 0.86% after the £1.50 fees but, hey, still better, right?
Actually, I haven’t paid any fees at all! Not one single £1.50 charged. It turns out you only pay that if you use the rather pointless AI autosave ‘feature’! Kill it, or make sure it doesn’t save more than £100 in any 28 day period, and you simply don’t get charged. Even if you have £5000 sitting there earning £1.20 every single week!
Which level are you on in Chip? Their website says, to get the high interest on 5000 you have to be in the level that charges £1.50. Otherwise you just get high interest on £2000.
When I asked they said this was payable even if you didn’t use the AI.
I have just opened a Chip+1 AI account but ‘paused’ the Autosaves and lowered the level to 1, so will see if I get any charges! I could only pause until end-May though rather than switch off the feature entirely (unless I’m missing something).
In the Product Roadmap is showed that Snoop is going to add savings account (great news!) so I assume this will include Chip?
This is going to be a bit more like a Savings monitor where we can keep an eye on the interest you’re earning and whether there could be better rates out there. So definitely Chip will be included in that for sure.
Hi Charlotte. I think you will be okay! I’ve not had any charges in nearly three months. It seems that, even as an AI member, if you limit the autosaves to less than £100 in any 28 day period, they do not charge the £1.50 fee, no matter how much you have saved. And it’s just increased to pay the 1.25% on £10,000!
I have my level set to 1 as well but, even though I don’t allow much spare cash to linger in my current account, I found it was still trying to save enough to take me over the £100 level! So I also paused until May, and that seems to be the best solution. You should only have to do it four times a year…
Don’t forget that you have to keep the funds deposited for a certain period of time (that I can’t remember atm), to qualify for the bonus/interest. For example, if you deposited today and withdrew in a fortnight, you would not qualify for the bonus.
