Chip - Is this company FCA regulated and safe to use for savings?

tomla

Chip haven't settled on what they offer and how they make money from "it" yet.
They move the goalposts all the time and quite frankly it's in their interest to save your money and take a fee every time they do...makes no sense..there are better ways to save...such as any other way.

mrkds

In what way have they changed the goal posts? 

richardnadin7

So, the general consensus that it is safe to save with them, but just a bit of hassle depositing the funds? The rate seems better than the rest of market even with the fee, so worth it overall?

DireEmblem

mrkds said:

In what way have they changed the goal posts? 

They implemented a £1 fee earlier this year, chargeable every 28 days so £13 a year potentially to auto save into one of their accounts.  First £100 is free.

A couple of months later, they increased that fee to £1.50, so a potential £19.50 a year.

To avoid fees, you could pause the auto saving AI, but it would switch back on after 3 months.  They have now fixed that  by introducing ChipLite(free) and ChipAI after some pressure from their investor community.

There was also talk of charging 50p for more than one withdrawal a month, not sure if that has been scrapped.

Then there is the investor perks (or lack thereof) for anyone that helped fund them since 2016? through crowdcube.

All that being said, they can now hold your money in an FSCS account, but any bonus interest is not garaunteed, nor paid to you, until you withdraw your funds from the account.

For a new Fintech savings company, how does that actually encourage users to grow their savings with them?

mrkds

Thanks @DireEmblem. It sounds like you have to keep an eye on them. The phrasing of interrest as a "bonus" does seem a bit sneaky! I am only planning on holding some money in there a few months so still willing to give them a go and they seem better than any of the current alternatives. 

richardnadin7

It would be good if you could message the MSE team direct to get a response from them or for them to send something out on the next newsletter as it is a bit worrying when the fraud team at a bank say that payments to chip are at your own risk.

richardnadin7

I have had a response from Chip ...

"Whilst your Chip autosave account is not currently FSCS protected, we are an authorised agent of Prepaid Financial Services (PFS) – you can find us listed on their website. PFS has an E-Money licence and is regulated by the Financial Conduct Authority (FCA). This means that your funds are safe with us (the only exception being the very unlikely scenario in which Barclays going bust!

Our separate 'Interest Accounts' are fully FSCS protected."

Thoughts???

eskbanker

richardnadin7 said:

It would be good if you could message the MSE team direct to get a response from them or for them to send something out on the next newsletter as it is a bit worrying when the fraud team at a bank say that payments to chip are at your own risk.

Even if you understood them correctly, a bank's fraud team isn't in any position to comment authoritatively on the legitimacy or reliability of another institution!  It may be that they were actually referring to a Confirmation of Payee mismatch, which does put the onus back onto the sender to decide if they're happy to accept the consequences, but doesn't actually signify a risky destination as such.

colsten

richardnadin7 said:

So, the general consensus that it is safe to save with them, but just a bit of hassle depositing the funds? The rate seems better than the rest of market even with the fee, so worth it overall?

Their "interest account" are FSCS protected; their other account is not.

Whilst their rate is, on the face of it. attractive for an instant access account, there are possible alternatives at present which might suit some people. Virgin, Halifax, some Regular Savers, and some would say even TSB, are all possible options for making at least as much as £5K could make in Chip over a year. I for one will pass on Chip.

mrkds

I'm confused about the names. What is the "Chip autosave account" and the "interest account"?  I see "Chip" and "Chip+1" accounts in my app. Chip+1 is where my money is. I was under the impression all their accounts were FSCS protected...  Should I be worried now? I'm more confused now!