Chip launches Interest Accounts
Automated savings app Chip has begun the roll-out of Interest Accounts in a move towards what it describes as “democratising savings”.
The first savings account will pay 0.9% AER with more rates and accounts, including notice accounts it promises will be “market leading”, coming soon.
Chip uses artificial intelligence (AI) to analyse your current account spending and save a tiny amount each week in a separate Chip account.
But up until now, Chip has only paid interest on savings balances if you recommend friends to the app and they sign up.
Negotiate competitive rates
Chip says the goal of its new platform is to make interest smarter and to fully automate savings accounts.
Chip will negotiate competitive rates on behalf of its users and combine savers’ money into a trust account. The more money in the trust account, the better the rates Chip will be able to negotiate from the banks.
Chip says that as a result, all the app’s users – regardless of how much they have in their account – will be able to benefit from the services normally only available to high net worth individuals with large deposits.
Interest Accounts are being rolled out gradually. They will allow Chip users to open a new savings account with a bank with just a few taps.
Users can deposit, withdraw, and track the performance of their savings all within the Chip app.
Savers can initially deposit up to £5,000 into their account, but this cap will be lifted to the full £85,000 limit for ChipX users once the update launches later this year.
The interest is paid daily and added to the user’s balance, which they can withdraw as soon as it is available.
Simon Rabin, Chip’s chief executive officer, said: “Millions of people in the UK have less than £100 in savings, leaving a huge chunk of the UK too reliant on credit, unprepared for a financial shock and not sufficiently planning for their financial future. And even if you do have savings, for the last decade it has been all but impossible to find a risk-free savings account that offers any kind of return. You can’t rely on banks to deliver, so this has left a problem for Chip to solve.
“With clever AI and a radical approach to banking technology, we’ve helped tens of thousands of people who couldn’t, or wouldn’t, save up. We’ve reimagined what savings accounts should be, and are now building Interest Accounts. This isn’t just one savings account – it’s a platform that negotiates better rates on your behalf as you sit back, save and earn interest. We don’t think people should have to spend hours trawling comparison sites, filling out form after form, and opening multiple accounts, so we’ve built something that’ll do everything for you at the push of a button.”