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Chip - Investments and savings
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Red. It can be such a harsh, unnerving colour. Especially when it’s splashed across your bank statement next to words like overdraft and overdue. Green’s better. It’s calmer, reassuring, more in control. Chip’s app icon is green.
That’s not why you should take note of this savings service though. Chip is worth exploring if dealing with finances gives you a headache. It takes all brainpower out of saving money, learning what you can afford to save, automatically moving the money for you. It saves you money without you noticing, and is an app born out of a very real need.
“I found it really difficult to have the self control not to spend the money that I had available to me,” Chip’s co-founder and CEO Simon Rabin tells us. “It is a very common trait; people spend what is available to them. I went through this period of putting away a couple of hundred pounds at the start of every month into a separate savings account, but I would end up pulling it back into my current account partway through the month. That was the initial frustration that led me to think ‘there’s got to be a better way to do this’.”
Chip is that better way. “Traditional savings accounts are just empty buckets that you’re supposed to magically be able to fill,” says Rabin. “Chip has been designed to actually do the saving bit for you.”
It does this by running an algorithm through your past three months of bank transactions (once you’ve granted it encrypted permission, of course), learning your regular monthly outgoings such as rent and bills, and then analysing your average spending patterns. This information, which constantly evolves as you continue to spend, is then used to work out what you can afford to save.
Rabin explains: “If by this point in the month you usually have £400 left in your account, and today you have £423 in your account, Chip will run that calculation, take that £23 and automatically pop it into your Chip savings account.”
“It essentially taps into that human failing, that inability to discipline yourself and not spend the money that you have available to you.”
Despite only adding to your savings money it knows you can afford to put aside, Chip alerts you to the upcoming withdrawals. It gives you a chance to cancel the automatic transfers to ensure you’re not left short if these additional funds are earmarked for an friend’s upcoming birthday or pre-planned weekend away.
Your money is never out of your possession or made inaccessible to you, either. You can remove money from your new savings account, one that’s set up for you at a leading high street bank, as and when you like. Although that’s not the best way to save, right?
Having helped users save close to £12 million during the app’s first year, according to Rabin the app is now “helping people save millions of pounds per month.”
This is money that is helping users exit their overdrafts for good, save for special occasions and holidays, and even put money together for deposits on their first home. And users have been quick to sing Chip’s praises.
“A user, Amy, got in touch recently to tell us her brother was getting married in Germany,” says Rabin. “She didn’t think she was going to be able to afford to make it until she checked her Chip account. She had saved more than enough for the flights and not realised it. That was a nice day for us.”
We’re sure it was a nice day for her too.