Autosaving app Chip to charge new fees from October

The Chip app, which launched in 2016, has previously been one of our top picks for autosaving, as it used to offer a £20 intro bonus for new customers. It works by using an algorithm to calculate how much you can save and sets money aside automatically.

While it'll still be free to have a Chip account and move money manually, from October there'll be a raft of changes to how the accounts work. And crucially, once you've saved a certain amount you'll be charged for every 28-day period where you use its autosaving service – regardless of how much you save over that period.

See our Autosaving Apps guide to find the best apps for saving cash.

What new fees is Chip introducing?

Since June, if Chip's algorithm manages to set aside more than £100 for you in a rolling 28-day period, you're charged a £1 fee (up to a maximum of £13/year).

This charge is now being removed, and instead, from 3 October 2020:

• A higher charge of £1.50 every 28 days will apply if you use Chip's Savings AI and automatic saving service to save ANY amount.If you do not make any autosaves in a 28-day rolling window (for example, because you have paused autosaves, or your bank balance has fallen below your specified minimum level), this charge will not apply.

  The first £100 you automatically save IN TOTAL, rather than during a 28-day period, will be free of charge. If you have already automatically saved £100 in total before 3 October 2020, and continue to automatically save, the AI saving service fee will apply from 3 October 2020 – even if you save less than £100 per 28-day period.

  Autosaving will also change to be opt-out – rather than opt-in – by default, so if you want to avoid the charge you'll need to go into the app and turn this feature off.

• You'll be charged for making multiple withdrawals in a 28-day period. 

  You can make a withdrawal of any value once per 28-day period for free, but Chip says it will charge a fee of up to 50p for each additional withdrawal in that 28-day period.

  Chip says this fee is designed to encourage savers to withdraw less frequently and focus on their long-term saving goals, as well as reducing its own operating costs.

Other Chip features remain free and the app says it will be unveiling a refer-a-friend bonus scheme in the near future.

I want to ditch Chip – what are the best alternatives for autosaving?

Most who save with Chip will be using it because its automated process makes it easy to get into the saving habit. But there are other apps out there that do a similar job for free.

If you're unwilling to pay Chip's boosted fees, here are the top free alternatives:

• Tandem – autosaving and 0.5% interest. App-based Tandem Bank autosaves, similar to Chip, and also lets you set up regular deposits, make one-off deposits and offers 'round-ups' (where transactions are rounded to the nearest pound, eg, buy a £2.70 coffee and it takes 30p for savings).

  Unlike Chip, which doesn't currently offer interest, Tandem pays 0.5% interest on whatever you save. This is easily beaten by normal easy-access accounts – but of course with those, you need to actively save into them. Read more about Tandem here.

• Plum – autosaving and a £5 sign-up bonus. Plum works via an app or Facebook Messenger. Like Chip, Plum works out what you can afford to put away and moves it to an e-wallet.

  It doesn't offer interest, but you can use it to invest in a range of stock market-type portfolios at different risk levels. Of course, if those investments do badly, you could lose money. See full info on Plum and read our New to Investing guide. Read more about how Plum works, including how to get the free £5 sign-up bonus.

However, if you're willing to keep a close eye on your savings, you may be better off ditching autosaving altogether and stashing your cash in a traditional savings account which pays interest instead. See our Top Savings Accounts guide for the latest best buys.