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  • FIRST POST
    • aj23
    • By aj23 11th Jul 18, 10:20 AM
    • 713Posts
    • 242Thanks
    aj23
    Chip 3% App
    • #1
    • 11th Jul 18, 10:20 AM
    Chip 3% App 11th Jul 18 at 10:20 AM
    How does this actually work? So you can put up to 10k in it, but can only save manually up to 100 a day, six times a month, so 600 a month. That's 7200k over 12 months, after which is goes back to 0% ?

    It says interest is paid quarterly, so I'm assuming you get a payout of 3% on what you have saved into each three month period?

    1800: 54
    3654: 109.62
    5583.62: 167.50
    7551.12: 226.53

    Giving you a balance of 7777.65 at the end of 12 months

    Sounds too good to be true? Or does it work like a regular saver in which you get 3% on the average balance?
    Last edited by aj23; 11-07-2018 at 11:55 AM.
Page 1
    • Paul_DNAP
    • By Paul_DNAP 11th Jul 18, 11:09 AM
    • 256 Posts
    • 324 Thanks
    Paul_DNAP
    • #2
    • 11th Jul 18, 11:09 AM
    • #2
    • 11th Jul 18, 11:09 AM
    Interest is calculated daily, using a daily rate that would add up to 3% APR. (So yes, like the regular saver thing).
    You don't get 3% on top of the amount added in each transaction, and you don't get 3% each quarter (you could estimate it at 0.75% on top of each quarterly balance as 4*.75 = 3 but the exact interest will depend on the exact date within the quarter each individual credit was made.)
    Last edited by Paul_DNAP; 11-07-2018 at 11:12 AM.
    (Although I could be wrong, I often am.)
    • aj23
    • By aj23 11th Jul 18, 11:20 AM
    • 713 Posts
    • 242 Thanks
    aj23
    • #3
    • 11th Jul 18, 11:20 AM
    • #3
    • 11th Jul 18, 11:20 AM
    Interest is calculated daily, using a daily rate that would add up to 3% APR. (So yes, like the regular saver thing).
    You don't get 3% on top of the amount added in each transaction, and you don't get 3% each quarter (you could estimate it at 0.75% on top of each quarterly balance as 4*.75 = 3 but the exact interest will depend on the exact date within the quarter each individual credit was made.)
    Originally posted by Paul_DNAP
    So what could you expect to get on a deposit of 1800 every three months for 12 months?
    • Zanderman
    • By Zanderman 11th Jul 18, 11:32 AM
    • 1,802 Posts
    • 4,452 Thanks
    Zanderman
    • #4
    • 11th Jul 18, 11:32 AM
    • #4
    • 11th Jul 18, 11:32 AM
    So what could you expect to get on a deposit of 1800 every three months for 12 months?
    Originally posted by aj23
    Your original calculation is way out.

    I think it would be best to forget the quarter bit.

    You're talking of depositing 600 per month - so work it out as if was a reg saver that you were paying into to on one day per month (it will be slightly less as it's actually 100 per day over 6 days) - and use the calculator here: https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/#calculator

    Which tells you the interest earned would be 116.47 if earning 3%.

    That's the equivalent (if you'd put the whole 7200 into one account at the start of the year) of 1.6%, so not actually particularly good. You'd do better with other accounts.

    That's IF your Chip account is at 3%. They start at 0% and you get 1% increments up to 5% if you earn referrals. So not all Chip accounts earn 3%, many earn less.
    • youngretired
    • By youngretired 11th Jul 18, 11:36 AM
    • 229 Posts
    • 124 Thanks
    youngretired
    • #5
    • 11th Jul 18, 11:36 AM
    • #5
    • 11th Jul 18, 11:36 AM
    I took this offer up December last year and the way interest is paid is quarterly but worked out weekly.

    I pay 400 manually every month but the money doesn't clear into the account very quickly and so doesn't earn interest straight away. You request the save and then it take 3 working days to debit your bank account and then sometimes takes a week to clear into your Chip account i.e. my debit from 5/7 still not cleared today.

    Interest that I have earned is 1st quarter 1/4 7.19 and 2nd quarter 1/7 16.23. Interest is normally applied Monday weekly so you can check amount given matches to what you work it out to be, I work mine out by simply total amount in account x 3% divide by 52 and it always matches.
    • aj23
    • By aj23 11th Jul 18, 11:54 AM
    • 713 Posts
    • 242 Thanks
    aj23
    • #6
    • 11th Jul 18, 11:54 AM
    • #6
    • 11th Jul 18, 11:54 AM
    Your original calculation is way out.

    I think it would be best to forget the quarter bit.

    You're talking of depositing 600 per month - so work it out as if was a reg saver that you were paying into to on one day per month (it will be slightly less as it's actually 100 per day over 6 days) - and use the calculator here: https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/#calculator

    Which tells you the interest earned would be 116.47 if earning 3%.

    That's the equivalent (if you'd put the whole 7200 into one account at the start of the year) of 1.6%, so not actually particularly good. You'd do better with other accounts.

    That's IF your Chip account is at 3%. They start at 0% and you get 1% increments up to 5% if you earn referrals. So not all Chip accounts earn 3%, many earn less.
    Originally posted by Zanderman
    Well that's why I asked. Using the MSE code it's 3% straight away. So that's why I incremented it at 1800 every three months as interest is paid quarterly. But if it works more like a regular saver in that you get 3% on the average balance, it would be about 3600 you'd get 3%, no?
    • Riff Raff
    • By Riff Raff 11th Jul 18, 12:02 PM
    • 28 Posts
    • 16 Thanks
    Riff Raff
    • #7
    • 11th Jul 18, 12:02 PM
    • #7
    • 11th Jul 18, 12:02 PM
    How much control do you have over the automatic sweep function? Can you turn that off completely?
    • DennisTenus
    • By DennisTenus 11th Jul 18, 1:06 PM
    • 235 Posts
    • 22 Thanks
    DennisTenus
    • #8
    • 11th Jul 18, 1:06 PM
    • #8
    • 11th Jul 18, 1:06 PM
    How much control do you have over the automatic sweep function? Can you turn that off completely?
    Originally posted by Riff Raff
    I was wondering this too but I guess it allows you to save more than 600 a month?
    • Zanderman
    • By Zanderman 11th Jul 18, 2:44 PM
    • 1,802 Posts
    • 4,452 Thanks
    Zanderman
    • #9
    • 11th Jul 18, 2:44 PM
    • #9
    • 11th Jul 18, 2:44 PM
    Well that's why I asked. Using the MSE code it's 3% straight away. So that's why I incremented it at 1800 every three months as interest is paid quarterly. But if it works more like a regular saver in that you get 3% on the average balance, it would be about 3600 you'd get 3%, no?
    Originally posted by aj23
    Er, No! How on earth would you get 3600?

    The 3% is an annual interest rate. Forget quarterly interest payments. The rate is annual.

    You're depositing 7200 gradually over a year. So it gradually gets interest, with the full 3% only on the very first part of the deposit. The later deposits get a progressively smaller proportion of 3%. Simples.

    I've already shown you how to calculate the interest and how much you'd get. What is the problem?
    • Zanderman
    • By Zanderman 11th Jul 18, 2:47 PM
    • 1,802 Posts
    • 4,452 Thanks
    Zanderman
    How much control do you have over the automatic sweep function? Can you turn that off completely?
    Originally posted by Riff Raff
    I was wondering this too but I guess it allows you to save more than 600 a month?
    Originally posted by DennisTenus
    It can be turned off for set intervals, the longest being 90 days. So to keep it off all the time you have to reset it to off every 90 days.

    Not sure what it will do if you manually save the max 600 in any given month. Perhaps it won't autosweep anything in that month.
    • aj23
    • By aj23 11th Jul 18, 3:14 PM
    • 713 Posts
    • 242 Thanks
    aj23
    Er, No! How on earth would you get 3600?

    The 3% is an annual interest rate. Forget quarterly interest payments. The rate is annual.

    You're depositing 7200 gradually over a year. So it gradually gets interest, with the full 3% only on the very first part of the deposit. The later deposits get a progressively smaller proportion of 3%. Simples.

    I've already shown you how to calculate the interest and how much you'd get. What is the problem?
    Originally posted by Zanderman
    I said that if it works like a regular, you'd get 3% on about 3600, the average balance. I did use the calculator. I didn't say there was a problem?
    • DennisTenus
    • By DennisTenus 11th Jul 18, 3:32 PM
    • 235 Posts
    • 22 Thanks
    DennisTenus
    Oh right so the max is 600 a month? I misunderstood, thinking it was max 600 manually a month + sweeps?

    So if you put it in max 600 a month how much interest will you earn over the year? Would it be 116.47?
    • Zanderman
    • By Zanderman 11th Jul 18, 3:37 PM
    • 1,802 Posts
    • 4,452 Thanks
    Zanderman
    I said that if it works like a regular, you'd get 3% on about 3600, the average balance. I did use the calculator. I didn't say there was a problem?
    Originally posted by aj23
    Ok, apologies. It was just the way you worded it, saying "it would be about 3600 you'd get 3%" which made me think you were wrongly working the interest. I see what you mean now though it is (in my view!) an odd way of looking at it.
    • Zanderman
    • By Zanderman 11th Jul 18, 3:39 PM
    • 1,802 Posts
    • 4,452 Thanks
    Zanderman
    Oh right so the max is 600 a month? I misunderstood, thinking it was max 600 manually a month + sweeps?

    So if you put it in max 600 a month how much interest will you earn over the year? Would it be 116.47?
    Originally posted by DennisTenus
    I didn't say whether it was 600 max, I was just speculating that it might be!

    Re interest, yes, as already discussed higher up the thread.
    • DennisTenus
    • By DennisTenus 11th Jul 18, 3:41 PM
    • 235 Posts
    • 22 Thanks
    DennisTenus
    I didn't say whether it was 600 max, I was just speculating that it might be!

    Re interest, yes, as already discussed higher up the thread.
    Originally posted by Zanderman
    Yes thats where I got the interest amount from but was just confirming as its quite confusing

    There is no withdraw restrictions with this is there?
    • Zanderman
    • By Zanderman 11th Jul 18, 3:44 PM
    • 1,802 Posts
    • 4,452 Thanks
    Zanderman
    Yes thats where I got the interest amount from but was just confirming as its quite confusing

    There is no withdraw restrictions with this is there?
    Originally posted by DennisTenus
    Don't think so. But I only use mine as a manual DD to satisfy DD requirements on other accounts, so I only pay in a small amount at a time and have never actually withdrawn any yet!
    • aj23
    • By aj23 11th Jul 18, 4:49 PM
    • 713 Posts
    • 242 Thanks
    aj23
    Ok, apologies. It was just the way you worded it, saying "it would be about 3600 you'd get 3%" which made me think you were wrongly working the interest. I see what you mean now though it is (in my view!) an odd way of looking at it.
    Originally posted by Zanderman
    Well that's just how regular savers work. It says it on the RS page on here too. Whatever the rate is, you get that on the average balance. Easiest way to work it out.

    Say it's 5% on 300 a month, you'd get 5% on 1800, not 3600.

    The Chip 3% sounds appealing but 600 a month just on that is a lot I guess. It's not very clear how you operate it. Like, how do you only do manual saves?
    Last edited by aj23; 11-07-2018 at 4:53 PM.
    • youngretired
    • By youngretired 11th Jul 18, 6:04 PM
    • 229 Posts
    • 124 Thanks
    youngretired
    You can do 6 x 100 manual saves a month and also auto-saves. MSE says maximum of 10000 can be saved a year so I would guess that when you come close to this amount then it will stop the auto-saves and prevent you from doing the manual saves.

    If you only want to do manual saves then you pause the auto saves and this can be up to 90 days and then you need to reset it again. I've done this every time so far and haven't had any auto saves. You know when you need to reset it as you will get an email saying you are about to save x-amount (a auto-save) so cancel this and then reset otherwise you can put it on a calendar.
    • ValiantSon
    • By ValiantSon 11th Jul 18, 7:32 PM
    • 2,537 Posts
    • 2,509 Thanks
    ValiantSon
    How does this actually work? So you can put up to 10k in it, but can only save manually up to 100 a day, six times a month, so 600 a month. That's 7200k over 12 months, after which is goes back to 0% ?

    It says interest is paid quarterly, so I'm assuming you get a payout of 3% on what you have saved into each three month period?

    1800: 54
    3654: 109.62
    5583.62: 167.50
    7551.12: 226.53

    Giving you a balance of 7777.65 at the end of 12 months

    Sounds too good to be true? Or does it work like a regular saver in which you get 3% on the average balance?
    Originally posted by aj23
    Regular savers don't pay interest on the average balance. They pay whatever the rate is on all the money in the account, calculated daily. This is not the average balance, and it is the way all simple interest works, whether it is a regular saver, easy access account, notice account, fixed rate savings bond, or current account.
    • aj23
    • By aj23 12th Jul 18, 10:17 AM
    • 713 Posts
    • 242 Thanks
    aj23
    You can do 6 x 100 manual saves a month and also auto-saves. MSE says maximum of 10000 can be saved a year so I would guess that when you come close to this amount then it will stop the auto-saves and prevent you from doing the manual saves.

    If you only want to do manual saves then you pause the auto saves and this can be up to 90 days and then you need to reset it again. I've done this every time so far and haven't had any auto saves. You know when you need to reset it as you will get an email saying you are about to save x-amount (a auto-save) so cancel this and then reset otherwise you can put it on a calendar.
    Originally posted by youngretired
    I don't know why the max. is 10k when the most you could save in it at 600p/m is 7200.
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