Fee for saving more than £100 per month?

I note that the proposed functionality for Chip 3.0 includes a fee for saving over £100 a month. There is however no proposed way to make sure you dont go over that limit other than dial the autosaves back to minimal or cancel lots of saves if you are in the fortunate position of being able to afford to save that much. To me thats all a negative user experience and counters the original key selling point of Chip; namely set autosaves up that will allow me not to have to think about it and how much is taken. I’m not sure why this decision has been taken and it seems a bit short sighted. To help manage that will there be functionality to specify a max monthly save limit to avoid incurring these fees? The save streaks “bonus” proposed means you’d need to save nearly £400 a month at current interest rates proposed of 0.25% to cover the monthly fee of £1 , which means that if the monthly saves ever take you over £100 it’s actually costing you money to save. It all seems a bit backwards and badly thought out from an end user perspective; especially as the key selling point of Chip used to be, set up autosaves, let it work out how much you can save and then dont have to worry about it.

Is this really what is going to be implmented ?

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https://community.getchip.uk/t/chipx-fees-who-do-they-apply-to/3395/42?u=gkputzy

Same thing discussed here too

Link doesnt work for me

I think that the link will not be working because the discussion is in the “investor” section, which requires some sort of invitation or status change (to “investor” ) to view.

I agree that paying to save doesn’t sit well when we have faster payments that banks provide for free - people aren’t used to paying to transfer money.

I also take your point that if you are having to intervene in order to cancel saves that will take you over £100, that detracts from the “set it and forget it” idea behind AI savings.

However…

If you find the app autosaves £100 per month or thereabouts (or more), you could do a manual save to prevent this. With the “payday put away” (standing order) feature, this manual save can also be set it and forget it. (NB: I asked in a separate thread whether amounts saved with payday put away would count towards this £100 limit, but have not been answered yet - if it does, then you obviously can’t use it in this way).

I also think there should be a setting that allows the user to prevent their autosaves going over £100 to avoid fees. Not having such a setting would seem grossly unfair since the user would not be in control of whether they incurred fees or not.

I suspect (but have no evidence) that the majority of users autosave less than £100 per month. If a user is able to save more than that consistently, they could pay for chipx (which has its own fee but avoids this £1 fee).

I don’t like the idea of the fee, but I accept it on the basis that I think it will affect a minority of users and is easily avoided.

Hope that makes some sense,
Ben

If a,fee is implemented then i for one will be looking to use something else

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I think this is a poor idea and have to say I’d leave Chip if it’s implemented

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This has alarmed me.

I will be looking for this to be addressed before I continue with new Chip.

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I agree with the points raised - it seems counter productive to pay to save, and the auto save feature that makes Chip attractive would mean you’d need rk constantly keep and eye to cancel any saves that would take you over £100 in the month which, again, makes it pointless!

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So I suggested it should be free up to £100 of AI saves and then you get no more auto saves unless you pay the 1GBP. With a message every so often saying, “if you’d paid a pound you could have saved xxx additional in June” or “for just 3gbp you could have saved an additional £xxx this last quarter”

But not so regular they annoy you. But to temp you to pay. I also understand if you are paying for ChipX there is no 1GBP charge which is good.

I guess we will see what they show in their final plan.

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Well as soon as a charge hits me for saving I will cancel my saves take my money and move it eles whereand never use chip again
Great idea thanks for your £450 this month no interest but we’re going take of you £££ for letting us use your money as if.

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Hi all!

Thanks for the feedback and the comments on the thread. I’m Alex (CMO) here at Chip.

So really interested in all your thoughts on this. Over the coming months we’re launching a lot of new features - these will include Interest Accounts (access to market leading interest rates through Chip), SaveStreak Bonus (Returns based on maintaining a streak) and a whole new Ai which saves far more intelligently. Most importantly though, ChipX will be the product for those looking to get market beating returns.

You can see more info about these here:


Some features will be within the ChipX membership and others will be free to use for Chip customers. If you’re using Chip for returns ChipX will be the natural choice for you - and give you access to market leading rates and deposit up to £85,000. We think the most transparent way possible to charge for the membership is a small monthly fee - and once you have access all returns are yours. We think taking a % of what you earn isn’t transparent and can leave you vastly out of pocket. SO for those looking to “make the most of their money” ChipX is built for you.

For those who are using Chip to save more automatically (and usually money they would have otherwise not saved) we think Chip should be free. However if our algorithm and Ai can genuinely save you £100 without noticing then a £1 fee (to cover our costs from our third parties) we think is fair. There is an interface in the app that will show you how much you have saved in the period and at what point you would get charged (if at all). Again, we want to be as transparent as possible.

So TL;DR: For savers motivated by returns ChipX is a no brainer and designed for you. NerdWallet did an excellent article on why membership is better than %: https://www.nerdwallet.com/blog/investing/millennial-retirement-fees-one-percent-half-million-savings-impact/

For savers using the automation we think with all the new features coming £1 if you save over £100 is fair.

I would you love your thoughts on this! Cheers and have a great day,

Alex

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I don’t actually think £1/month is that bad. But if people are really annoyed about it, would it be worth maybe looking at scales of charges? Eg. If you save over £100, it’s 25p, save over £150 it’s 50p.

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They’re making things more and more complicated. I really don’t understand why anyone would save into an account that pays no interest anyway - that defeats the object for me. And as for paying a fee for the privilege of Chip X, it will have to give me access to interest rates higher than any I can access elsewhere which more than cover the fee otherwise why would I bother?! I’m waiting with curiosity to see whether Chip can pull a rabbit out of a hat but I’m not holding my breath…

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My understanding is, once the new accounts are up and running they’ll pay more in interest that you can get anywhere else, and they’re aimed at those who have a decent pot of savings to actually get a return on.

For everyone, the AI can help you put away up to £100 a month that you wouldn’t otherwise (if you can, great, but then you wouldn’t need Chip if you can already do that), which is still a pretty good deal in my opinion.

Looking at Alex’s first post above, the free (there is still a FREE version!) will pay “competitive interest rates” (so, that is a return), and on top of that extra bonus interest for save streaks, so the returns can be higher still.

Just looking at MSE for a comparison of top savings rates, and the best instant-access one pays a whopping…1.16%.

Let’s say over 1 year, you put away £100 a month. At 1.16% interest, paid monthly, you’ll earn £7.57 in interest on that money. That’s the BEST instant-access savings account out there at the moment, and relies on you opening the account, and then setting up a standing order to pay in the £100 a month.

The beauty of Chip, is that it’s all automatic, and it moves money without you noticing, rather than the psychologically eye-watering sum every month in one go. If your situation changes or you have unexpected costs, you then have withdraw money or cancel the standing order etc, none of which is as easy as using Chip, which will adapt for you based on your spending.

Until we know what the rates are on the free account, we can’t say for certain if it’ll be better-value than that one above - however, it will pay interest, it will be competitive, and you don’t HAVE to pay a fee. If you are doing well enough to put away more than £100 than I think £1 for all of the above is fair.

At the moment because interest rates are so low, the £1 charge proportionally is a bigger cut of any interest returns, but people are arguing over pennies. There’s barely any value in actually having money saved in an interest-paying account at the moment, it’s just good for convenience.

When you are at the stage when either your pot is getting large (i.e close to the £5k limit), and/or you’re consistenly putting away larger amounts per month, that’s when moving to ChipX would be a logical next step.

TL;DR - FREE Chip accounts will still pay interest, but as you put more away it’ll make more sense to move to ChipX. Charges only seem more expensive because nowhere’s paying much interest at the minute.

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For me the point of Chip is not having to think about it. I don’t mind the fact that there is no interest because that is the trade off for the convenience of not thinking about it and easily saving for little luxuries every now and then. If I have to start managing the process, and/or paying a fee, then I will boot myself up the backside, put a teenytiny bit of effort in and save myself into an account that pays some interest. Chip would lose its purpose for me.

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I understand that there is a large group of savers who particularly appreciate the auto save aspect and Chip works really well for them, but there is also a group who joined up because of the returns that were on offer. Chip has chosen to prioritise the first group, they’ve been upfront about that, which is fair enough I suppose - I get the feeling they dismiss the second group as ‘Boomers’ whose circumstances they don’t really have any sympathy for. I agree that current interest rates on offer are pitiful and hardly worth the bother, but for those of us (Boomers, probably!) who rely on interest from savings in order to make ends meet it is crucial for us to ensure we get the best rate we possibly can. We will just have to wait and see whether whatever rate Chip is able to offer, after taking into account any charges they levy, will beat the best instant access rate available elsewhere. If they can do that then I’ll be delighted to continue to save with them, but if they can’t then I don’t see any reason why savers who fall in the second category would stay.

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I am more worried as an investor about the £1 fee putting people off initially. Sure if you really think about the £1 a month charge its reasonable, but if you stumble across chip on the play store financial apps and see that cost I think it may just put people off even downloading it

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@actlatham

“For those who are using Chip to save more automatically (and usually money they would have otherwise not saved) we think Chip should be free. However if our algorithm and Ai can genuinely save you £100 without noticing then a £1 fee (to cover our costs from our third parties) we think is fair”

I think the fundamental thing you hint at but dont really address here is that if i can save over £100 a month I WILL get charged and there is no way to stop that or control it without manually interferring with the maigcal AI that was supposed to make Chip essentailly a set and forget proposition. I’m not curently bothered about returns, so ChipX’s fancy offers and the fees there, which seem more pertinant if the proposition is really as good as its being hinted at (we’ll see though), dont cover me or a bucnh of other people i suspect. What I’m bothered about is putting away cash for emergencies or a rainy day by saving here and there. Your original USP is being undermined and you aren’t being quite as up front about it as you like to think. I only noticed the small print about the fee in a font and colour that made it hard to spot in the docuemtnation, by chance. If there isn’t functionality to stop me getting charged , why use Chip to save? I may as well just go and manually save in another account myself becuase i know I wont be charged.

Saving over £100 may be a rare occurrence and only cost me £12 a year if i did it every month. But by introducign a charge at the basic offering you are abandoing your original user base in the drive to monetise. Do so at your peril.

Anyone know how i sell my investment in Chip ?

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I agree with a lot of what you’re saying Ben - but the bit I agree with most is that it will likely affect a minority of users. In which case, how much revenue is the fee really likely to raise and is it worth it when set against how it damages some key functionality of the free (not anymore) product? Personally I’d prefer that those costs were absorbed from the ChipX customers.

And the asterisk thing just isn’t on. It makes it look even worse. How can you have “£0.00 a month” in big bold letters and put the £1 a month in tiny grey small print? For all that’s been said about it being a “fair cost”, that presentation just makes it look like you don’t think it’s fair and justifiable at all, and are hoping people don’t notice - I’m absolutely not accusing anyone of that, that’s just how it appears. Not “as transparent as possible”.

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