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Chip to launch cash ISA and fixed term bonds
Chip plans to launch a cash ISA and fixed term deposit accounts later this year, as it reveals it achieved profitability in May 2023 for the first time since launch.
The savings and investment wealth app confirmed that as part of plans to “build out Chip”, it will launch “exciting offerings” on a cash ISA and fixed deposits in the second half of the year.
This will allow customers to transfer from existing cash and investment ISA products to all Chip ISA products. It currently offers a stocks and shares ISA but no cash alternative.
On the fixed term deposit side, Chip plans to offer six-month and 12-month products which will aim to track the Bank of England base rate, “and be instantly adaptable when the base rate moves”.
Currently Chip offers four savings products, including its popular Instant Access Account which pays 3.82% AER (variable) on a minimum £1 deposit.
If the cash ISA and fixed term bonds follow in the footsteps of its Instant Access Account, savers may see near top or market-leading deals as it’s often led or hovered in the best buy tables in this product category.
As part of its latest shareholder update, Chip said its Instant Access Account “has without doubt been an incredible success”.
It also runs the Prize Savings Account, Easy Access Account (1.10% AER variable) and a 90-Day Notice Account (2.95% AER variable).
Across all its products, it reported 645,000 registered users as at March 2023. This represents 14% growth since December 2022, with the average balance per new active account at £13,900 within their first month.
Chip records profit for the first time
Chip turned profit for the first time in the month of May – six years after launching in the UK (2017). However, it wouldn’t disclose this figure to YourMoney.com. It did say it’s now setting its sights on 2024 being its first profitable year though.
It said December 2022’s strong momentum continued into Q1 2023, where Chip recorded £1.47 million of revenue in the first three months of the year, and ended the quarter with £9m annual recurring revenues, representing a 171% increase on Q4 2022.
The growing customer base since December 2022 has also bought £2bn in deposits.
A statement from the shareholder update to its 27,000 investors, read: “These exceptional achievements in both customer growth and revenues enabled the business to exceed November 2023 forecasts by March 2023, and reach profitability earlier than anticipated.”
Simon Rabin, CEO, said: “We are on a mission to build wealth for our generation, with the super app for saving and investing.
“Profitability is a huge moment for any scale-up. It means the business is essentially self-sufficient and can drive profits into faster, more aggressive growth.
“While our incredible savings offering has provided us with a launch-pad, we’re delighted to see many customers begin to diversify their portfolio across our range of products.
“We’ve demonstrated exactly why the world of saving and investments needs innovators who can move at the speed of the market and offer simple solutions. We consistently move faster and go further than legacy providers and this recent success is just the start.”
Rabin added that the “best is yet to come”.
He said: “We have many further improvements and products lined up as we prepare to challenge the big legacy names in our industry. The next 12 months are set to be really special with more exciting news just around the corner.”
Related: Video: How to build long-term wealth, starting with ISAs
