CHIP and ClearBank

Fluidlevel

I have a CHIP instant access savings account and some money in their 10K monthly prize draw account but have more or less drawn down all my funds despite the attractive 3.4% as I read a report on one of their banking partners, ClearBank, which left me in a cold sweat....

CHIP are not FSCS protected it is their banking partners that are, fair enough. I only found out today after years of using my account that funds held in a Revolut account are likewise not FSCS protected. Panic not, I still have my Revo account as it is so more competitive than the likes of the Starling bank foreign exchange service...but I keep very little in it. 

I have tried to access a statement of my accounts on the CHIP App but on my Android it does not work, I have requested a response, none here yet.

Now no panic monger me as I hate all that stuff but has anyone done their research on where the CHIP account money is held, or read the small print to confirm what happens to us savers and our money if CHIP or their partners go belly up?

Band7

The CHIP instant access account is provided by Clearbank and you have FSCS cover up to £85K. I think the same might be true for the prize draw account but I have never looked at it so I don't know what the T&Cs say.

Clearbank are also the bank of choice for some other account. E.g. Raisin and Emma.. The £85k cover applies at Clearbank level, not individually to their concierges.

CHIP also have accounts that are not provided by Clearbank and which do not have FSCS cover.

I have no idea why you are panicking if you are within the FSCS limits. Perhaps you can share the report which spooked you?

VXman

So, if I have money in another organisation that uses clearbank this £85k protection is shared between chip and those other accounts?

Band7

VXman said:

So, if I have money in another organisation that uses clearbank this £85k protection is shared between chip and those other accounts?

FSCS is always max £85k per person and per financial institution

The financial institution is Clearbank, not CHIP or other concierge services for Clearbank. 

masonic

The prize saver account is FSCS protected, but far inferior to premium bonds, so you could ditch for something better.

VXman

Band7 said:

Clearbank are also the bank of choice for some other account. E.g. Raisin and Emma.. The £85k cover applies at Clearbank level, not individually to their concierges.

However, you do not generally keep money with Rasin for long. It is transferred to the bank/product you have chosen through the Raisin website. You need to check the status of the actual bank that Raisin put your money into.

masonic

VXman said:

Band7 said:

Clearbank are also the bank of choice for some other account. E.g. Raisin and Emma.. The £85k cover applies at Clearbank level, not individually to their concierges.

However, you do not generally keep money with Rasin for long. It is transferred to the bank/product you have chosen through the Raisin website. You need to check the status of the actual bank that Raisin put your money into.

You should probably check both. Should Clearbank go bust, then funds currently held with partner savings providers would be safe, but what happens at maturity? It may be the case that funds would be returned to the Raisin's Clearbank holding account, which may be kept open under the Special Administration regime. Otherwise, it may be frozen in place until alternative arrangements are put in place for the  money to be paid out (similar to what happens when the account holder dies). Given the nature of this arrangement, savers could be waiting longer to be reunited with their money than funds directly held with Clearbank.

Personally, I would avoid having >£85k distributed between providers such as Chip and Raisin, but it is a hypothetical for me as I don't have >£85k cash savings.

Band7

VXman said:

Band7 said:

Clearbank are also the bank of choice for some other account. E.g. Raisin and Emma.. The £85k cover applies at Clearbank level, not individually to their concierges.

However, you do not generally keep money with Rasin for long. It is transferred to the bank/product you have chosen through the Raisin website. You need to check the status of the actual bank that Raisin put your money into.

Sure, the Raisin money is only transient, on the way in an on the way out. Fact remains that it counts towards your Clearbank balance during such times.

There are also others who have a concierge arrangement with Clearbank. Emma seems to be one of them, and I wouldn't be surprised if there were / will be others, as the concierge approach appears to be Clearbank's business model. 

Brillo21

I had money in the CHIP instant access savings account until a few minutes ago, after a call from my Bank (First Direct) who raised red flags with regard to the Account as there is no sort code or account number peculiar to your/my account with CHIP the only sort code and account number that you send money to is listed as Bank : Clearbank Ltd  and Branch : Chip Financial Ltd it appears that CHIP have an account with Clearbank Ltd and all deposits from CHIP Financial are held there, But you (or me) have no actual account number with Clearbank Ltd.

Also on the FCA site there are three companies registered with the Name "Chip Financial Services Ltd" two of which are current and one that is no longer registered with the FCA and a further worry is the two current companies neither have a contact telephone number so you will never be able to talk to anyone if there is an issue.

Trying to contact CHIP representatives via the app is protracted as your messages can be "not seen yet" and not replied to for well over a day. all a bit of a concern.

I appreciate that all of us should do our own checks, the fact that Martin Lewis endorses a financial product by listing it as a "Good buy"  would lead simple people like me to think that all the necessary checks on its legitimacy would have been done, but when other members of the Financial community are dubious about this company concerns me 

Band7

There is no need to panic just  because First Direct CS are clueless about Open Banking. Your funds in Clearbank via CHIP are as safe as your funds in First Direct. FSCS protection does not depend on a sort code and account number. There are countless Building Societies and smaller banks where you don't have a sort code and account number in your name, Yet nobody, not even First Direct CS, would raise red flags about that.

You can read up about Open Banking here: https://www.moneysavingexpert.com/banking/open-banking/

As an aside, I believe your Clearbank deposit account does actually have a sort code and account number BUT you cannot use this to make any deposits or withdrawals, and you don't need to know about it. You can probably see it, though, when you make a deposit. Truelayer displays a Clearbank sort code and account number when I make deposits in to CHIP. Though I make these from Santander, and I don't know whether Truelayer behaves the same with all banks.

masonic

First Direct called me some time ago about Open Banking deposits into a different savings provider (Tandem I think). That turned out to be a one-off and I've had no trouble since. As Band7 suggests, it is very common for savings accounts not to be directly reachable by bank transfer.