Chip, the savings app that has put aside more than £165 million for its users to date, has launched Chip+1, a new account paying the market’s best return of 1.25% (variable) on savings up to £5,000.
The new account is eligible for the government-backed Financial Services Compensation Scheme (FSCS) up to £85,000, with all the money deposited into Chip+1 held in a segregated trust account with the UK authorised bank ClearBank.
Users can unlock access to the new account by either inviting a plus one or being someone else’s invitee. Chip savers can share their VIP passcode with as many people as they want, but only the first person to sign up using the passcode will become the “+1” and thus get access to the new account - along with the user who originally invited them. Savers can also use the auto-saving feature in order to make tailored automatic payments directly into their new Chip+1 account.
The UK has seen interest rates plummet off the back of the Covid-19 pandemic and its subsequent impact on the economy, with negative interest rates now a real possibility. Most high-street banks currently only offer 0.01% on their savings accounts, whereas those offering higher rates have limitations such as low deposit caps, more stringent eligibility criteria, or very high monthly fees. With the return of 1.25%, Chip is not only offering a return that is 125 times better than the majority of big banks, but is also introducing the highest return a saver can get on money in an FSCS-eligible savings account with easy-access.
The fintech, which saw its user base double and deposits skyrocket in light of the pandemic, is repurposing its advertising budget in order to be able to offer the market’s best return in a time when rates are plummeting. Chip’s Chief Executive Officer, Simon Rabin, explained: “We’re flipping the traditional approach to marketing by prioritising our users and giving a chunk of our advertising budget directly to our savers in return for recommending Chip to their friends. This allows us to grow our user base organically by attracting people who genuinely love Chip and recommend us to their friends, and we think they deserve it more than Facebook and Google do.”
Chip+1 is among a number of new features and accounts launched by the company this year with the aim of democratising savings and helping users put aside money more effortlessly. Earlier this year, Chip launched Interest Accounts, a platform that negotiates better rates on users’ behalf, and prior to that, the company released Save Streaks and Payday Put Away features, with the latter helping users put aside an additional £4.7 million so far. 2020 also saw Chip close its biggest funding round to date and hit a major milestone by securing a full FCA authorisation.
“We are delighted to be able to bring the UK’s best return on easy-access savings to our users”, Simon Rabin continued. “We’re building Chip to be the best place to accumulate long-term savings and build wealth, and part of that is competitive returns. We started with AI-based auto-saving in order to make putting money aside effortless and simple, and now we’re dedicated to finding ways to automatically get the best returns on the savings you already have. Both our Interest Accounts platform and, now, the Chip+1 account represent massive strides towards achieving that goal and also enable us to further democratise savings. We have a lot more in store for 2021, including investment accounts, and plan on bringing more ways to effortlessly grow your money with Chip.”