Martin Lewis offers advice on savings and interest rates
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Savers have taken a hit recently, with the Bank of England choosing to continue to keep its Base Rate at a record low of 0.1 percent. This has, in turn, impacted the interest rates more familiar UK providers can offer, meaning it has been difficult to grow one’s money. There is, however, an organisation which is taking a different approach, and has an account likely to entice savers.
Chip is an app which is available on smartphone devices – specifically iOs and Android.
The organisation says it is dedicated to “saving money for you in an intelligent way”.
Every few days, the algorithm used by the app calculates what a person can afford to save based on their spending habits.
This money is then transferred from a person’s current account to their Chip account automatically.
But a particularly attractive offering from Chip comes in the form of its Chip+1 account.
The account is paying the “market’s best return” at 1.25 percent variable.
This is available on savings up to £10,000 for those who pay a fee, or £2,000 on the app’s free plan.
Some may wonder how Chip is able to offer such an attractive interest rate when compared to other providers in the current climate.
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However, Chip is able to do this through a change to its budget.
Its website explained: “We’re simply giving our advertising budget directly to our savers in return for recommending Chip to their friends.
“We think you deserve it more than Facebook and Google do.”
The 1.25 percent bonus is added to a person’s Chip+1 balance every 12 weeks.
This will allow them to grow their money while easily monitoring the performance of their cash.
Chip, however, is unlike some other providers, which is worth noting.
In order to unlock the Chip+1 account, individuals are required to be invited to do so by a friend.
If someone receives an invite, all they will need to do is use the one-off VIP pass code to start their account.
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As an existing customer can only invite one person to this account, they will need to think carefully.
Despite the different approach Chip takes to savings, Britons are reassured their money is safe.
This is because all money deposited into Chip+1 is held in a segregated trust account with the UK authorised bank ClearBank.
In addition, deposits are also eligible for the Government-backed Financial Services Compensation Scheme (FSCS).
This ensures that, should the worst happen, all funds up to a value of £85,000 are protected.
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