The Top Easy Access Savings Discussion Area

friolento

phillw said:

masonic said:
So, for example, if Barclays failed during the processing of your inward deposit, such that Ford Money etc didn't receive it, then you would claim from Barclays and Ford Money would be in for some difficult times implementing a disaster recovery plan,

I think the example that people are worried about is if they sent money to Ford and it was still with Barclays, then Ford failed. The implication that the money already received by Ford is FSCS protected, but that Barclays will say "What money?" Or that somehow because Barclays have a single account for Ford, they will claim "well let's see, Ford were guaranteed up to £85k and so here is your share of that".

Moving it back to Chip, the "Whilst your transactions are pending, your money is safeguarded, but not covered by FSCS" statement on getchip.co.uk is where most of the worries come from.

There’s no limit to the amount protected through safeguarding, but some costs could be taken by the administrator or liquidator if Chip were to fail. This could impact the amount that you receive, and it could take longer to get your money back than if it were held directly with a bank.

What constitutes whether a transaction is pending? More importantly, why would "pending" transactions be stopped?

What would happen if chip were to fail, but before announcing it they just stopped processing incoming transactions?

A Chip transaction which is pending is clearly marked as Pending in the transaction list. Only deposits made by card go into pending status.OB and FP deposits never go into Pending.

Those who are compelled to make their deposits by card should be aware of the risk they are taking. Though it would seem odd to deposit into a savings account when you don't get interest for 3 working days.....I am aware that some people do have a general need for debit card deposits but they have plenty of alternatives which don't carry the same risks.

Note I am talking about the Chip Instant Access account, which I think is the only Chip account relevant for this thread. I believe the same is true for the Chip Prize Savings account, and I have no idea how things work with Chip investments as I have never used them.

masonic

phillw said:

masonic said:
So, for example, if Barclays failed during the processing of your inward deposit, such that Ford Money etc didn't receive it, then you would claim from Barclays and Ford Money would be in for some difficult times implementing a disaster recovery plan,

I think the example that people are worried about is if they sent money to Ford and it was still with Barclays, then Ford failed. The implication that the money already received by Ford is FSCS protected, but that Barclays will say "What money?" Or that somehow because Barclays have a single account for Ford, they will claim "well let's see, Ford were guaranteed up to £85k and so here is your share of that".

If someone sends money to Ford's holding account provided by Barclays, and Ford fails before Barclays complete their processing of the transfer, and Barclays is instructed not to credit any further payments to Ford's holding account, then Barclays should bounce the payment back to the sender unless Barclays is taken down too. People might be worried that this money could disappear into the void, much the same as they worry when any of their transactions don't arrive promptly, but this is a payment infrastructure concern rather than an FSCS concern. It would follow the same principles as a payment that gets lost in the clearing system.

An orderly administration would first shut down receipt of inward payments from the clearing bank, and only thereafter disrupt the flow of payments into customer accounts. One of the objectives of the special administrators is to preserve the functioning of critical infrastructure to avoid such issues.

phillw said:

Moving it back to Chip, the "Whilst your transactions are pending, your money is safeguarded, but not covered by FSCS" statement on getchip.co.uk is where most of the worries come from.

There’s no limit to the amount protected through safeguarding, but some costs could be taken by the administrator or liquidator if Chip were to fail. This could impact the amount that you receive, and it could take longer to get your money back than if it were held directly with a bank.

What constitutes whether a transaction is pending? More importantly, why would "pending" transactions be stopped?

What would happen if chip were to fail, but before announcing it they just stopped processing incoming transactions?

To understand this, it is first necessary to understand that Chip Financial Limited is an Authorised Payment Institution regulated under the PSD. It powers some of the payment services available through the app, namely transactions via debit card and Google/Apple pay. If you scroll down the page, all the way through the savings section, past the S&S ISA/GIA section, to the "where your money is not covered by FSCS" section, this is explained.

It's safe to assume such a transaction remains pending from the point it is authorised by the customer, through to the point it is credited to the customer's savings account and part of the available funds, but for a couple of working days it remains in the customer's linked account. The point where the risk starts is between the transaction showing as complete (debited) by the card issuer and the point it is credited to the savings account. If Chip failed, it would not be subject to the special administration regime, and so there is not an obligation upon the administrators to preserve the functioning of these payment services. I therefore think that there is potential for incoming card transactions to get stuck in the system, potentially not retrievable via chargeback, and not subject to FSCS compensation if not recovered.

If lack of interest while these transactions are pending isn't enough to put you off...

oz0707

For me this whole chip conversation is a bit 'protest too' much people trying to assure you something is safe. I'd rather take a decimal place or two less interest and not deal with the open banking and understanding the whole intricacies of the FSCS protection

jaypers

I have avoided Chip as I simply don’t like the concept of Open Banking…….just a personal view here but I find it a faff, especially having to renew the handshake every 3 months too. Other niggly little things keep cropping up in conversations on here too so although their rates seem very good, for me it’s a no. 

masonic

oz0707 said:

For me this whole chip conversation is a bit 'protest too' much people trying to assure you something is safe. I'd rather take a decimal place or two less interest and not deal with the open banking and understanding the whole intricacies of the FSCS protection

If you don't want to understand the risks, but want to avoid them, how will you do so? It's not as simple as singling out Chip and assuming every other savings account is 100% risk free.

If the FSCS intricacies aren't the issue and you are just expressing a preference for accounts that don't use Open Banking, or aren't App only, or which meet some other criteria, then fair enough.

friolento

oz0707 said:

For me this whole chip conversation is a bit 'protest too' much people trying to assure you something is safe. I'd rather take a decimal place or two less interest and not deal with the open banking and understanding the whole intricacies of the FSCS protection

If I have posted something that is incorrect, I apologise and would ask if you could please point out what I got wrong, so people aren't misled.

oz0707

lcooper said:

oz0707 said:

For me this whole chip conversation is a bit 'protest too' much people trying to assure you something is safe. I'd rather take a decimal place or two less interest and not deal with the open banking and understanding the whole intricacies of the FSCS protection

If I have posted something that is incorrect, I apologise and would ask if you could please point out what I got wrong, so people aren't misled.

masonic said:

oz0707 said:

For me this whole chip conversation is a bit 'protest too' much people trying to assure you something is safe. I'd rather take a decimal place or two less interest and not deal with the open banking and understanding the whole intricacies of the FSCS protection

If you don't want to understand the risks, but want to avoid them, how will you do so? It's not as simple as singling out Chip and assuming every other savings account is 100% risk free.

If the FSCS intricacies aren't the issue and you are just expressing a preference for accounts that don't use Open Banking, or aren't App only, or which meet some other criteria, then fair enough.

I'm not saying anything that has posted has been wrong. Just my basic understanding is no direct fscs protection, atleast not as clear cut as other institutions. Im sure the risk is tiny but i cba to delve into the specifics or research so ill just use other providers. I did open an account but also wasnt comfortable with open banking. 

where_are_we

Skipton Bonus Saver Issue 8 has a good rate at 4.45% variable and allows unlimited withdrawals and £1 minimum balance. It is useful for those that want to benefit from the Halifax Reward Current Account monthly £5 reward,in that you can make deposits using a debit card. A downside of this account is deposits made on a non banking day show up online almost immediately but are not accredited for earning interest until the next working day - "Please note payment transactions made to this account on a non-working day will start earning interest from the next working day"

Withdrawals on a non banking day suffer the same fate and do not take place until the next working day.

A benefit for new Skipton customers is after a years membership you might qualify for a similar product to their current Loyalty Regular Saver @7.5%.

ForumUser7

where_are_we said:

Skipton Bonus Saver Issue 8 has a good rate at 4.45% variable and allows unlimited withdrawals and £1 minimum balance. It is useful for those that want to benefit from the Halifax Reward Current Account monthly £5 reward,in that you can make deposits using a debit card. A downside of this account is deposits made on a non banking day show up online almost immediately but are not accredited for earning interest until the next working day - "Please note payment transactions made to this account on a non-working day will start earning interest from the next working day"

Withdrawals on a non banking day suffer the same fate and do not take place until the next working day.

A benefit for new Skipton customers is after a years membership you might qualify for a similar product to their current Loyalty Regular Saver @7.5%.

15.1 Other than cheques, payments made into your account will be credited to your account, will earn interest and be available for you to use on the day we receive the money. This also applies to Skipton Building Society cheques. Please note that if you pay money into your account using your debit card, we don’t receive the money until 2 business days after you carry out the transaction.

The wording in bold in your post I think applies to faster payment deposits predominantly.

Also, worth noting Skipton has been warning customers who cycle debit card payments through to stop, or action would follow (likely account closure).

PixelPound

oz0707 said:

lcooper said:

oz0707 said:

For me this whole chip conversation is a bit 'protest too' much people trying to assure you something is safe. I'd rather take a decimal place or two less interest and not deal with the open banking and understanding the whole intricacies of the FSCS protection

If I have posted something that is incorrect, I apologise and would ask if you could please point out what I got wrong, so people aren't misled.

masonic said:

oz0707 said:

For me this whole chip conversation is a bit 'protest too' much people trying to assure you something is safe. I'd rather take a decimal place or two less interest and not deal with the open banking and understanding the whole intricacies of the FSCS protection

If you don't want to understand the risks, but want to avoid them, how will you do so? It's not as simple as singling out Chip and assuming every other savings account is 100% risk free.

If the FSCS intricacies aren't the issue and you are just expressing a preference for accounts that don't use Open Banking, or aren't App only, or which meet some other criteria, then fair enough.

I'm not saying anything that has posted has been wrong. Just my basic understanding is no direct fscs protection, atleast not as clear cut as other institutions. Im sure the risk is tiny but i cba to delve into the specifics or research so ill just use other providers. I did open an account but also wasnt comfortable with open banking. 

It doesn't help when there's "what if" type posts that seem to muddy the water. I guess some don't like chip but as they offer different products it's easy to say you aren't protected and it be right, in some sense.

The bottom of every email they send out has
Note that Chip is not a bank. Only the money held in our Interest Accounts, Prize Savings Account, Chip+1 and Chip Instant Access account is covered by the Financial Services Compensation Scheme (FSCS) for deposits. To find out more and to check your eligibility please visit: www.fscs.org.uk.

So as in this thread we are really talking about Chip Instant Access, surely there isn't a worry so long as the normal provisos are in place - i.e. your total investment is less than £85K across any accounts covered by clearbank.

I use OB to deposit, which is instant, and withdrawals are by Faster Payment so usually within minutes maybe an hour. It is instant banking in a time when many of the competitive rates providers are still "by the end of the next working day". I used to keep above £2K in by current account earning nothing (or a pittance) and only put into savings what I was unlikely to need.

I get the debit card deposit risks (IIRC you are told about it on application), and surely the same would apply to YBS or Skipton that allow deposits by debit card. I've opened a TSB account, so doing some low value transfers across and finding they are quite quick (usually showing as cleared after a day, whilst TSB still showing as pending).

I used to be reticent of Open Banking - don't want any robot app managing my money, but so long as you leave the optional parts (like transaction history) turned off, which they are by default, they really are only getting that you have enough balance to allow the transfer.

It really is DYOR rather than rely on a forum post.