Last year, Chip launched a market-leading instant access savings account with Allica Bank that offered an interest rate of 0.7% AER.
Chip, if you’re not already familiar, is an app that connects to your traditional current account and scrapes off small amounts of money each month into an account created as part of the app.
The exact amount is determined by AI. The idea is that the amounts are so small, you don’t even notice them, which helps you to save more.
At the time (September 2021), the savings account didn’t seem like a great deal as you had to pay £1.50 every 28 days to use Chip, which of course ate into the small amount of interest you would earn.
Plus, when I tried Chip in 2020 (before it became a paid app), I wasn’t a fan.
I didn’t like the fact that I lost control over the amount of money in my account and, because I kept most of my money in a savings account, I was almost overdrawn a couple of times.
But now it seems Chip is offering more of its services for free, including access to the 0.7% savings account, which might make it worthwhile.
The savings account is protected by the Financial Services Compensation Scheme (FSCS) up to the value of £85,000, and you’re allowed unlimited free withdrawals, unlike before (there was a time they charged a fee).
The bonus for me personally is that you don’t have to sign up for the automated savings element anymore – you can now just manually move the funds in, which is what I prefer.
Once you deposit your money, it can take up to four days for it to be allocated to your account (based on what I’m shown in the app).
And the terms and conditions say that if you want to withdraw any money, you have to do it by 12 noon for your request to be processed on the same day.
So if you rely on moving money from your savings account into your current account a la minute, this is not the account for you.
But if you have some extra savings that you’d like to park for a while – as you might do in NS&I’s Income Bonds – this is the best easy access rate out there.
They have a Refer a Friend promotion on at the moment. If you use my code CHIP-UFU409 you get £10 for free (once you deposit at least £1) – as do I.