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In this Chip review we look at this popular AI savings tool, to see if the Chip app might be the right choice for you.

Saving money has never been easy, as the quarter of the British adults with no savings at all will probably tell you. This is why it is so good to see the latest technology being put to good use in mobile apps that let us stash away some extra cash without even trying.

Chip isn’t the only app to take the AI approach to making an automated savings app, with Plum and Moneybox among the rivals in the UK and a growing list of options elsewhere. But the fact that it has been a big success and apparently has over a quarter of a million users makes it well worth taking a look at.

Will the Chip app let you grab control of your finances in a way that makes saving a pleasure from now on?

Who Are Chip?

Nick Ustinov and Simon Rabin are credited with founding Chip in 2016. They are registered with the UK’s Financial Conduct Authority under the Payment Service Regulations. 

Their blog lets us read more about some of the team members and what they are up to. Their careers section mentions 85 co-workers there, and they name “developers, data scientists, writers, designers, entrepreneurs, marketers and more” as all working for them. They also have a few job openings advertised at the time of writing this. 

What Does the Chip App Offer?

The basic idea is simple, as Chip gives you clever ways to save more money. To see how it does that, we need to take a look at the process.

• Connect your bank to the app. This can be done in about a minute and means that you can move money around securely using an open banking connection. Accounts at most of the major British banks can be hooked up in this way, although some banks aren’t included on their list.
• Auto-saving is done using AI, as the app works out how much you can safely tuck away without missing it. This is the key to the service, as you want it to save as much as possible each month without affecting your life negatively.
• The service works out your spending habits, to calculate how much it thinks you can afford to save that month. If you don’t agree, you can over-ride the auto-save that has been recommended. 
• You can set goals to help you to achieve what you want with your savings. This is where you can work out what you most want to save for and then try to make it happen.
• You are able to earn interest on your savings and can also see what kind of saving streak you have gone on by saving every month with fail.   

What Does Chip Cost?

At the start, this service is free to download and use. If you save £100 in the first 28 days then it starts to charge at a rate of £1.50 every 28 days. The other option is to downgrade to the ChipLite plan, which is free but doesn’t include all of the functions of the paid service.   

At the time of writing this Chip review, interest rates are pretty low, which makes the 1.25% they currently offer look pretty attractive.

What Do Other People Say About It?

As you would expect, there is a fairly wide variety of opinions about the Chip app. The majority of existing users appear to be happy with it. Among the most positive comments, we can see that it does genuinely seem to have helped some people who normally struggle to save.

Whether it is due to a lack of time or some other reason, a lot of people tend to drift along without thinking about putting cash away. It is this type of person that it is mainly aimed at. If you are a steady saver anyway, this app might make life a little bit easier but there probably won’t be any major benefit to be had.

A concern for some savers has been the relatively long time that it can take to withdraw money. This seems to have been due to some sort of technical issue, so it is likely to be sorted out sooner or later. However, if you think that you might need the money quickly then this is definitely a point to bear in mind before signing up. 

How Do You Get Started?

If you haven’t used an open banking app like this before then you will be pleasantly surprised at how easy it is to download the chip app and set it all up. You just need to enter your name and debit card details to be whisked off to your bank’s site. Enter the way you normally would and you will be able to approve Chip on there.

After that, you will want to take a few moments to set everything up the way you want it. So, you can set any savings goals you have and add a picture if that helps to inspire you. You will then want to note how much you plan to save each month.

Carry on with life as normal and Chip will analyse your transactions to see if you can save more than you thought you could. You will then get suggestions for your savings plans that you can accept or reject. The idea is that you will start saving more money without any real effort.

Is Your Money Safe With Chip?

Your money won’t be as tightly protected in here as it is in a High Street bank, though, unless you have an interest-earning account. Online savings apps like Monzo and Starling also give you a similar service to Chip but with protection similar to a bank, as they are part of the Financial Services Compensation Scheme. 

With Chip, you are only covered up to £85,000 under this scheme, and that is if you have an interest bearing account. Otherwise, the only protection offered is that they are a representative of Prepaid Financial Services, which is a firm regulated by the FCA. Chip say that your money is held in a ring-fenced account at Barclays. 

Conclusion

Saving money each month is one of the best habits for us to get into, and it is a shame that too few people do it in a serious way. The recent appearance of automated savings apps like Chip is something that should make it easier for more people to start putting away cash.

The issues that have been mentioned with trying to withdraw cash might people some people off. As for the cost, £1.50 a month is probably fair if it helps you to save more than before.

Overall, the Chip app could be a decent choice for someone who wants to get started with their first savings plan, but the relative lack of financial protection and investment options probably make it of limited use to more advanced savers.

Capital at risk. Investments can go up and down in value, and you may not get back what you put in. This blog does not constitute financial advice. If you’re unsure, seek independent financial advice.