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Understanding the basics of investing

Investing basics

What is investing?

Investing is the act of putting your money into assets – like stocks, bonds, funds, property or businesses – with the goal of growing your wealth over time (we’ll come back to assets).

Unlike saving, which typically means holding cash in a bank account, investing allows your money to work for you, potentially earning returns through compounding – the further returns that your reinvested returns earn, or dividends – payouts of cash from positive returns.

Another key difference is that with investing, your money can go up or down in value, which we’ll explain in more detail.

Whether you're investing for retirement, buying your first home, or building long-term financial security – starting early and staying consistent can make a huge difference.

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How does investing work?

Investing works by buying an asset at its current value, with the aim of selling it at a higher, ‘appreciated’ value, and generating a profitable return.

Depending on the type of asset an investor holds, any potential gains can be ‘realised’ in a number of ways. For the purpose of this guide, we will focus on stock markets, but this concept can be applied to most investments. Learn about stock market basics.

Think of the stock market like a real market: a place where you can buy and sell your shares. If you buy a share for £10, and the value moves up to £15 in the stock market, and you sell, you have made £5. The sale of your share for a profit is called ‘realising’ your gains.

For the period you own your share, you are a ‘shareholder’. You can learn about how stocks work here.

The movement of share prices within the stock market relates to the performance and value estimations of a company. As previously mentioned, these prices can move up or down, sometimes dramatically, and this is an important thing to consider when thinking about investing.

The degree of risk an investor is comfortable with enduring onto assets during price movements, is called ‘risk tolerance’. You can read more about investment risk here.‍

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What are the basic types of investments?

Investors have a number of asset classes they can invest in:

Equities, stocks or shares are a stake in a company or property.
Bonds or fixed-income investments are loans to companies or governments who pay fixed interest as a return.
Cash or cash equivalents, such as money market funds, invest in short-term debts.
Property is where the value of your investment is held within a property’s price.
Commodities are assets such as gold or silver.
Cryptocurrencies are digital currencies created and stored electronically.

A collection of assets is called a portfolio. You can invest in one or more of these assets at the same time, and investors generally choose to hold a mix of asset classes, to make their portfolio diverse. You can read more about asset classes in our full guide.

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Investing vs saving: what’s the difference

As we’ve already touched on, the value of your investments can go up or down. This differs from a savings account, where you are given an interest rate.

This interest rate is a guarantee that the nominal value of your savings will appreciate, and pay out interest within your savings account.

For example, if you save £100 at 5% AER, the value of your savings will be £105 at the end of year one. Simple, right? Well, there is an invisible force at work against your money, called inflation.

Think of inflation, simply, as things getting more expensive over time. If a loaf of bread costs £1, but inflation is 5%, the next year it will cost £1.05.

The same goes for your savings. If inflation is 5%, and your interest rate on your savings is 5%, the purchasing power of your money will remain the same after a year.

With investing, your money is closely tied to the performance of the assets you’ve invested in.

For example, if you bought a share in a company for £100, and after the first year, the value of that company had appreciated 5%, your investment would be worth £105.

Historically, investment returns have outperformed the interest of cash savings accounts, and can act as a better protection against inflation, if your returns are higher than the inflation rate.

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How much do I need to start investing?

With Chip, you can start investing from £1. Traditionally, investing has been viewed as an expensive activity, due to previously high brokerage fees and minimum investments.

The rise of online investing has made investing far more accessible, and sustainable for all of us.

Investing little and often, with a proper investment strategy is the most effective way to grow your money, and this is far more important than having loads of cash to get started.

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Understanding investment accounts

If you’re ready to get started with investing, the first step is to choose which investment account is right for you.

With Chip, you can choose to invest with either a Stocks & Shares ISA, or a General Investment Account. The core difference between these two accounts, is the Stocks & Shares ISA gives you access to tax-free returns (invest or save £20,000 each tax-year across all ISAs) and the General Investment Account does not.

So, if you have some of your £20,000 allowance to use, a Stocks & Shares ISA could be your best option, and if you have used your allowance this tax-year, you can opt for a General Investment Account.

These aren’t your only options when it comes to an investment account, and our next guide covers what’s out there in the UK, to give you the full picture.

Seccl Custody Limited is the ISA Manager for the Chip Stocks and Shares ISA. Fund management charges apply. ISA limits apply. Invest £20k per tax year. Chip does not provide tax advice or financial advice. Tax treatment depends on individual circumstances and may be subject to change in the future. GIA proceeds are potentially taxable, subject to any annual exemption that may apply.

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What is the Prize Savings Account?

Accounts & Products

What is the Prize Savings Account?

Our Prize Savings Account is an instant access savings account, where instead of earning interest, your cash deposits give you entries into a monthly draw to win tax-free¹ prizes paid directly into your account.

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Is it free to enter?

Yes! Entries are completely free of charge, all you need to do to enter is deposit and hold an average balance of at least £100 at the end of the month.

Note - from 1 December 2025 onwards you will only need to hold a minimum average balance of £10.

Every £10 of average balance gives you one entry in the monthly draw.

But to be clear; entries don’t cost you anything, and any money that you deposit can be instantly withdrawn whenever you want (but note that you will lose entries in the monthly draw).

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Is it a normal instant access savings account?

The Prize Savings Account is an instant access savings account with instant deposits and withdrawals.

It is powered by our partner bank ClearBank, and all deposits are ultimately held by them and covered by the Financial Services Compensation Scheme (FSCS) up to £120,000 (see our ‘how we protect your money’ webpage to learn more about FSCS at Chip).

The only difference between the Prize Savings Account and any other savings account is that instead of earning interest, you will have a chance to win tax-free¹ prizes.

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How much can I save?

The maximum amount of cash you can save into the Prize Savings Account is £85,000. Any prizes won are paid as ‘bonus’ and are paid directly into your Prize Savings Account, and don’t count towards the £85,000 balance limit.

It is not possible to deposit more than this amount, or to open multiple accounts in order to do so. Any attempt by an individual to open multiple accounts would result in a breach of the Prize Savings Account terms and conditions.

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What are the prizes?

All prizes are tax-free¹ sums of ‘bonus money’ we pay directly to your Prize Savings Account.

The prize amounts can change each month and we’ll publish next month’s prizes on this site no later than five calendar days before the start of the next draw.

We commit to always paying at least one Grand Prize of £10,000 and 250 ‘additional prizes’ of £10. Though, generally we pay much more than this!

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What’re the odds of winning?

We can’t be exact with the odds of the next draw, as it depends on how many people enter and how many prizes are awarded. But we can share past odds. Please also note that you can win more than one prize per draw.

The odds of winning per entry (per £10 deposit) in the September 2025 draw were:

1 in 623 to win any prize

The average odds of winning per entry (per £10 deposit) in all 2025 draws were:

1 in 964 to win any prize

Data is based on January - September 2025.

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Are prizes tax free?

All prizes are tax-free sums of ‘bonus money’ we pay directly to your Prize Savings Account.

But note that Chip does not provide tax advice, and tax treatment depends on individual circumstances and may be subject to change in the future.

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‍Can I win more than one Prize?

Yes you can. You can win multiple tax-free prizes in the draw.

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When are the prizes paid?

If you win an ‘additional prize’, it will be added to your Prize Savings Account within five working days after the start of the month (but we aim to do this as close to the 1st of the month as we can).

If you win the Grand Prize, we will contact you before it is paid (see below).

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What happens when you win the Grand Prize?

Grand Prize Winners need to confirm their win before the prize is paid.

We will contact you by email and call you. You’ll have seen the recordings of these calls on our social media accounts.

We will also ask you to take part in reasonable publicity, like being interviewed and filmed. We will obtain your express consent before filming and/or sharing any media.

Winners have 10 working days to respond to us and claim their prize (we reach out by email, push notification and phone, leaving voicemails and even SMS).

If we can’t reach the Grand Prize winner, the prize will be deemed forfeit and the amount will be added to the following month’s prizes (i.e. like a ‘rollover’).

For example, if a winner wins a Grand Prize of £10,000 in January but does not claim it, the Grand Prize available in February’s draw (for this example, also £10,000) would become the value of both January and February’s Grand Prizes combined (i.e £20,000).

Rest assured, we make every effort to contact the Grand Prize winner and we haven’t had a single Grand Prize unclaimed yet!

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How are the prizes awarded?

Prizes are paid as a bonus, not cash, directly into your Prize Savings Account.

Please note, the prizes do not become cash until your full Prize Savings Account balance is withdrawn back to your current account, or if you transfer your balance to another account in Chip. Also note, when withdrawing prizes to your linked bank account, this can take up to five working days.

Prizes also do not count towards additional entries, unless you withdraw and redeposit. Prizes are not FSCS protected until they are withdrawn and redeposited.

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How do you enter?

Each month you will be entered into the prize draw provided you have an average balance of £10 or above in the Prize Savings Account (and have not opted out).

Every full £10 of average balance = one entry.

The average balance you have on 11:59pm on the last day of the calendar month is what gets counted as your entries.

For example, if you have an average balance of £10 on 11:59pm on the last day of the calendar month you’d get 1 entries each calendar month (unless you opt out).

If your average balance drops below £10, and remains at that level at the end of the calendar month, you’d have 0 entries in that month’s prize draw (if you choose to opt out of the draw, you’ll have 0 entries, regardless of your balance).

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How does average balance work?

Before we get into the detail of how average balance works, the important things to take away are:

The earlier you deposit in the month the more entries you get.
In the month after you deposit, every £10 of your balance = one entry in the draw (provided you don’t withdraw).
Use the calculator to see how many entries you’ll get.

Your average balance is calculated by your daily balance divided by the number of days in the month.

When are my entries counted?

Your entries will be taken at the end of the calendar month, but the draw will take place in the first week of the following month (no later than five working days after the end of the calendar month).

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Where can I see my entries?

You can see your entries in your app, on the Savings tab under “Prize Savings Account”

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Can I get extra entries?

You can occasionally earn extra entries through promotional offers. You might be able to double your entries, or earn entries for completing actions like referring a friend.

These are one-off promotions and will have their own eligibility and terms and conditions. Extra entries can count above the deposit cap of £85,000 (8,500 entries)

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How and when are the winners picked?

The draw will take place within five working days after entries close (the first five working days of the following month). Winners are selected using randomised draw software.

The Grand Prize winner will be paid within 5 working days of them accepting the prize (see above), and we aim to pay ‘additional prize’ winners within the same timeframe, but it’s normally much quicker.

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Can I autosave into this account?

Yes, you can autosave directly into this account (Savings Plans settings can be found on the profile tab) and also deposit one-off amounts at any time by selecting the Prize Savings Account in the Savings tab and tapping ‘deposit’. Saves into this account also count toward your in-app savings goals that you can set up in the ‘Goals’ tab.

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Is this gambling or a lottery? Can I lose money?

The Prize Savings Account is not a lottery or gambling and it’s completely free to enter. You can’t lose money. You are depositing money in a FSCS protected account for the chance to win prizes. You can withdraw for free at any time.

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Can I open a Prize Saving Account for my child?

Unfortunately not, The Prize Savings Account is only available to the named individual who must be a UK resident over 18 years of age.

Understanding the Base Rate

Rates, Tax & Economics

The Bank of England Base Rate, also known as Bank Rate, holds significant influence over the UK's financial landscape, impacting borrowing costs, mortgage rates, and savings interest.

It's important to understand the Bank of England Base Rate and how it affects your financial decisions. In this guide, we'll explain what the Bank of England Base Rate is, how it influences interest rates, its impact on the economy, and why it plays a role in influencing spending and inflation.

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What are Interest Rates?

Interest rates refer to the percentage charged or earned on borrowed money or invested funds.

Lenders charge interest on loans as compensation for the risk and opportunity cost of lending money, while savers earn interest on their deposits as a reward for entrusting their funds to financial institutions. Learn more about interest rates.

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What is the Bank Rate?

Bank Rate, often referred to as the Bank of England Base Rate, is the key interest rate set by the Bank of England. It acts as a tool for controlling inflation and stabilising the economy.

The Bank of England assesses economic conditions and adjusts Bank Rate accordingly to support the government's inflation target and ensure economic stability.

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How Bank Rate Affects Your Interest Rates:

Changes in Bank Rate have a ripple effect on various interest rates throughout the economy. Here's how it influences your financial decisions:

Mortgage rates: Bank Rate influences the cost of borrowing for banks, impacting the interest rates they offer on mortgages. When Bank Rate rises, mortgage rates tend to increase, making borrowing more expensive. When Bank Rate decreases, mortgage rates may go down, providing potential savings for homeowners.
‍Savings interest rates: Bank Rate also affects the interest rates offered on savings accounts. Higher Bank Rates generally result in higher savings interest rates, potentially increasing the returns on your savings. Lower Bank Rates may lead to reduced savings interest rates.

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How Changes in Bank Rate Affect the Economy:

Changes in Bank Rate have a significant impact on the broader economy. Here are some key effects:

Borrowing costs: Changes in Bank Rate directly influence the cost of borrowing for individuals, businesses, and financial institutions. Higher rates increase borrowing costs, potentially curbing spending and investment. Lower rates encourage borrowing and stimulate economic activity.
‍Inflation: Bank Rate plays a crucial role in managing inflation. When inflation is rising, the Bank of England may increase Bank Rate to reduce spending and control price increases. During economic downturns, lowering Bank Rate can encourage borrowing and spending, boosting economic activity.

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Why Does Bank Rate Influence Spending and Inflation?

Bank Rate influences spending and inflation primarily through its impact on borrowing costs. When borrowing becomes more expensive due to higher interest rates, individuals and businesses may reduce their spending, leading to a potential slowdown in economic activity and inflation.

Lower interest rates make borrowing cheaper, encouraging spending, investment, and economic growth. How do interest rates affect inflation?

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Bank Rate Summary

Understanding the Bank of England Base Rate is crucial for making informed financial decisions in the UK. The rate directly affects interest rates on mortgages and savings, impacting borrowing costs and potential returns.

Changes in Bank Rate have far-reaching effects on the broader economy, influencing spending, investment, and inflation levels.

Pensions

Private pensions

Pension basics

What is a private pension?

A private pension is a pension you build yourself, separate from your workplace pension. tIn most cases only you contribute, though limited company directors can also receive employer contributions from their own company." Either way, you’ll still receive tax relief on qualifying contributions and you decide how much to pay in and where the money is invested.

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The main types of private pensions

‘Private’ or ‘personal’ pension is often used as a blanket term for all of these options, there are actually three distinct types of pension ‘wrappers’. They all offer the same tax-relief, they differ in fees, investment choice and flexibility.

What is a personal pension?

Sometimes called a standard personal pension, this is the most common off-the-shelf option offered by large providers such as Aviva, Royal London etc.

You pay into a pot which is invested in a range of funds managed by the provider.
It’s a straightforward option for those who want a hands-off approach, as the provider handles your investments based on your risk profile.
You’ll have less control and a narrower choice of investments compared to a Self-Invested Personal Pension (SIPP).

What is a stakeholder pension?

A stakeholder pension is a specific type of personal pension that has to meet strict government rules around fairness and accessibility.

Providers can charge a maximum of 1.5% (drops to 1% after 10 years), and they must accept low minimum contributions (£20).
They are a popular choice for people on lower incomes or those who need to stop and start payments frequently without penalties.

What is a SIPP?

We’ve already covered the Self-Invested Personal Pension, but here’s a quick reminder in the context of other private pensions.

This is the ‘DIY’ version of a personal pension, where you can select your investments yourself and have full control over your investment decisions. You typically aren’t limited to a standardised set of investment options, you can choose what works for you, and keep full oversight.

What is a junior SIPP?

A junior SIPP is a tax-efficient way to save for a child’s retirement. A parent or guardian can open the account, but the money belongs to the child.

You can pay up to £2,880 a year into the account. The government adds tax relief of £720 to this bringing the total to £3,600. The child cannot access the money until they reach age 55 (rising to 57 in 2028).

What is a Lifetime ISA?

A Lifetime ISA (LISA) is not technically a pension, but it is often used as an alternative for self-employed people.

You can save or invest up to £4,000 a year, and the government adds a 25% bonus (up to £1,000 free).
You must open a LISA before your 40th birthday, and can only continue making contributions until age 50.
You can withdraw the money tax-free after age 60. If you take it out earlier (unless buying a first home), you pay a 25% penalty. Note that the 25% penalty claws back more than just the government bonus — on a £100 contribution you'd receive £125 with the bonus added, but the penalty takes £31.25, leaving you with just £93.75. You effectively lose a small portion of your own money, not just the bonus.
Pension vs LISA: A pension is often preferred by higher-rate taxpayers (because you get 40% relief), while a LISA can be excellent for basic-rate taxpayers who want tax-free access at 60.

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Private pensions for the self-employed

If you’re self-employed your income may fluctuate, and pension saving can seem daunting if you’re unable to commit to a fixed monthly Direct Debit. A SIPP can give you:

Flexibility to adjust contributions to your pension. You can pay in lump sums when you have a good month, and pay nothing if you need to take a break.
Full transparency and low fees make SIPPs a good option if you aren’t ready to invest immediately.

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Private pensions for a limited company director

If you run your own limited company, a good way to save is actually through employer contributions:

Instead of paying yourself a salary (which is taxed) and then paying into a pension, your company pays directly into your pension.
This counts as an allowable business expense. Your company saves Corporation Tax on the contribution, and you pay no Income Tax or National Insurance on the money entering your pot.

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What age can I draw my private pension?

Private pots are designed to support you in later life, so the government has set rules for when you can start withdrawing the money from your pension.

Under current rules you can access your pension from age 55.
From 6 April 2028, the minimum pension age will rise to 57.

This applies to almost all private pensions (SIPPs, stakeholder and personal). The main common exceptions are if you are unable to work due to serious ill health, in which case you may be able to access it earlier.

Also, if you joined certain pension schemes before 3 November 2021, you may have a 'protected pension age' allowing you to access that pension from 55 even after the 2028 change.

Read our full guide on retirement ages.

Pensions

Understanding Self-Invested Personal Pensions (SIPPs)

Intermediate

Pension basics

What is a SIPP?

A SIPP is a private pension ‘wrapper’ that gives you flexibility over both your investments choices and how you manage old pensions. With a SIPP, you can:

Consolidate: Combine old workplace pensions that you no longer contribute to and may not be working for you into a single account. Read our full guide on pension consolidation.‍
Invest with control: Get full visibility and control over your investments within your pension.

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How does a SIPP work?

A SIPP works in a similar way to other defined contribution pensions, but with added flexibility and often a wider range of investment choices. It functions like a tax-efficient retirement savings account. You contribute, and the government tops your contributions up with tax relief.

Tax relief bonus: If you pay in £80, the government adds £20 in basic-rate tax relief to make your total contribution to£100. Higher and additional rate taxpayers can claim extra relief.
Investments: Your contributions are then invested into your chosen assets with the aim of growing your money.‍
Tax-efficient growth: As long as investments are held inside the SIPP, you pay no Capital Gains Tax or Income tax on any growth generated in the pension.

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How to set up a SIPP

Setting up a SIPP is simple:

Choose a provider: Look for a provider that offers clear fees and an investment offering that’s right for your retirement goals and level of experience.
Fund your account: You can transfer your old pensions, set up monthly recurring contributions, or pay in a lump sum.‍
Stick to your strategy: Choose investments that align with your goals and risk appetite. Some SIPPs require you to choose individual stocks, while many also offer ready-made solutions such as Target Date Funds. These funds automatically shift from higher risk to lower risk investments as you approach retirement.

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Can I have a SIPP and a workplace pension?

Yes, you can have both at the same time. A common strategy used is to keep current workplace pensions to benefit from employer's contributions, but use a SIPP to consolidate all previous workplace pensions that are no longer being paid into.

Having a SIPP with those old pensions generally makes it easier to keep track of where each old pot is and more control on how it is invested

Read our full guide on workplace pensions.

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How many SIPPs can I have?

Savers are not limited by the number of SIPPs they can hold. However, some people find it easier to keep everything in one place. Having a single SIPP can make it easier to get a better picture of retirement wealth and can often reduce the fees paid.

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How much can I pay into a SIPP?

The two main limits you need to be aware of when paying into a SIPP are:

The earnings limit: You can usually only receive tax relief on personal contributions up to 100% of your relevant UK earnings each tax year. For example, if you earn £30,000, you cannot personally contribute more than £30,000 and still receive tax relief
The annual allowance: There is also a total cap of £60,000 per tax year (or 100% of your earnings, whichever is lower). This allowance includes all contributions - from you, your employer, and the government’s tax relief.

Read our full guide on pensions tax, relief and allowances.

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What age can I draw my private pension?

The trade-off for the tax benefits of a SIPP is that your money is locked away until a set minimum age.

Currently you can access your SIPP from age 55.
From 2028 this will rise to age 57.

Once you reach this age you’ll have the options to:

take 25% of the pot as a tax-free lump sum,
buy an annuity (guaranteed income plan), or;
leave the rest invested and withdraw the cash as you need (drawdown).

We’ll come back to each of these three scenarios later.

Read our full guide on retirement ages.

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The State Pension

Whilst your workplace pension and SIPP help serve as your tools for building your personal retirement pot, you may also be entitled to the State Pension, provided you meet the qualifying criteria. This serves as a guaranteed foundation to your retirement income, with the amount you receive based on your National Insurance record.

In the next guide we’ll cover how the State Pension system works, and what you can expect to receive if you qualify.

How Do Interest Rates Affect Inflation?

Learn more about interest rates here.

Intermediate

Rates, Tax & Economics

Interest rates and inflation are closely linked in the UK economy. Inflation, measured by the Consumer Price Index (CPI) and the Retail Price Index (RPI), is the rate at which the prices of services and goods are rising.

The Bank of England (BoE) is responsible for setting the base rate to help control inflation and maintain price stability.

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What Causes Inflation?

When the BoE raises interest rates, borrowing becomes more expensive. This can slow down economic growth and curb inflation. This is because higher interest rates make it more expensive for businesses to borrow money, which leads to slower growth and fewer job opportunities.

Consumers also have less money to spend because they are paying more interest on loans and mortgages. As a result, demand for goods and services decreases, which can lead to lower prices.

On the other hand, when the BoE lowers interest rates, borrowing becomes cheaper. This can help stimulate economic growth and fuel inflation. When interest rates become lower, it makes it cheaper for businesses to borrow money, which can lead to more investment and create more jobs.

Consumers also have more money to spend because they are paying less on loans and mortgages. This means the demand for goods and services increases, which can lead to higher prices.

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How Does the Bank of England Control Inflation and Interest Rates?

The Bank of England uses monetary policy to control inflation and interest rates. The bank sets interest rates, which influence the cost of borrowing and the rate of growth in the money supply.

When inflation is too high, the bank raises interest rates to reduce spending and slow down the economy.
When inflation is too low, the bank lowers interest rates to encourage spending and growth.

The bank also uses other tools, such as quantitative easing, to influence the money supply and control inflation.

Quantitative easing (QE) is a monetary policy used by central banks to stimulate the economy by increasing the money supply and lowering interest rates.

This is typically done by purchasing government bonds or other financial assets from banks, which increases the banks' reserves and makes it easier for them to lend money.

The goal of QE is to encourage spending and investment, which can help boost economic growth and reduce unemployment.

This can help to stimulate economic growth and curb inflation by making it cheaper for businesses and consumers to borrow money.

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What You Need To Remember

When interest rates are high, borrowing becomes more expensive and can slow down economic growth whilst curbing inflation. When interest rates are low, borrowing becomes cheaper and can stimulate economic growth.

Learn more about how our instant access savings account.

Chip

Blog & News

The FSCS limit for savings is changing to £120,000

Accounts & Products

From 1 December 2025, the Financial Services Compensation Scheme (FSCS) guarantee limit for savings is increasing from £85,000 to £120,000 per person, per bank.

The FSCS guarantee for investments is not changing and is remaining at £85,000.

You do not need to do anything to benefit from this change, it will be applied automatically by the FSCS.

We will update our content and materials shortly after 1 December 2025 to reflect the new limits.

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What does this mean for my money held in Chip?

The FSCS guarantee for savings is managed by the Bank of England and FSCS agency directly and they have stated the new limit will be in effect from 1 December 2025.

So, from then on, in the unlikely event that Chip, or our partners (ClearBank for savings and Seccl Custody Ltd.) should fail, you will be covered up to:

£120,000 of eligible deposits in your savings accounts, and;
£85,000 of eligible deposits in your investment accounts.

You can read more about how your money is protected at Chip here: https://getchip.uk/how-we-protect-your-money

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Your savings accounts

Four of Chip’s savings accounts are provided by our partner bank, ClearBank.

This means your FSCS cover across all savings you hold in Chip is £120,000 in total across all accounts from 1 December 2025. Please note, FSCS cover applies per person, per bank, so if you hold other accounts powered by ClearBank outside of Chip, your cover will also be shared across them.

You can hold larger deposits than the FSCS protection cover amount. Chip savings accounts balance limits are currently:

Chip Cash ISA: unlimited, but new deposits capped at £20,000 per tax year depending on your individual circumstances and subject to change in the future
Instant Access Account: £1 million
Easy Access Account: £1 million
Prize Savings Account: £85,000

You can read more about how ClearBank protects your money here. Please note that the Chip Cash ISA isn't available for new customers.

For the Smart Cash ISA: Money deposited into the Smart Cash ISA is held across established UK licensed banks, such as Barclays, Lloyds and HSBC and is eligible for cover by the Financial Services Compensation Scheme (FSCS), subject to FSCS conditions.FSCS limits of £120,000 per person, per bank apply, subject to eligibility. As funds may be held across multiple UK licensed banks, protection applies separately to deposits held with each bank.

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Your Chip investment accounts

The money in Chip investment accounts sits with a different firm (Seccl Custody Ltd.) than our savings accounts, so you enjoy separate FSCS cover for this money.

Your FSCS cover for investments is unchanged by this news and remains up to £85,000 of eligible deposits across all your investment accounts in Chip, so if you have both a Stocks & Shares ISA, and a General Investment Account (GIA) open, your cover is spread across both of those accounts.

As with savings, FSCS cover for investments applies per person, per institution, so if you hold investment accounts with Seccl Custody Ltd. outside of Chip, your total cover of £85,000 will also be spread across those.

You can hold more than the FSCS protection limit in Chip investment accounts. The total balance limits per account are currently:

Stocks & Shares ISA: unlimited, but new deposits capped at £20,000 per tax year depending on your individual circumstances and subject to change in the future
General Investment Account (GIA): unlimited

Remember, FSCS doesn’t cover you for investment performance, or in the event that your investments go down and you get back less than you put in.

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The savings FSCS limit increase comes into effect on 1 December 2025

The new £120,000 FSCS limit comes into effect on 1 December 2025.

You don’t need to do anything to benefit from this change, it will automatically be applied by the FSCS.

The Bank of England has set financial firms a deadline of May 2026 to update all their content, marketing materials and disclaimers to reflect the new limit.

However, we aim to update all of our content across our app, website, documents and automated emails as close as possible to 1 December 2025.

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The details

On midnight 18 November 2025 the Prudential Regulation Authority (PRA) from the Bank of England (BoE) announced the FSCS limit will increase from £85,000 to £120,000 from 1 December 2025.

The PRA is responsible for oversight of FSCS protection in respect of deposits for banks.

The PRA does not govern FSCS limits for investment accounts, which are determined by the FCA and there have been no announcements from the FCA about increasing the limits for investments.

If this changes, we will also update you.

Insights

The multi-account strategy: Maximising your savings potential

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Accounts & Products

Why use multiple accounts?

Each type of savings account offers different perks. By splitting your money across several accounts, you can:

Maximise interest: Some accounts offer better rates for certain types of savings.
Keep your money accessible: Different accounts offer varying levels of access to your funds.
Meet different savings goals: Whether it’s an emergency fund, retirement savings, or a holiday fund, separate accounts can help keep your financial goals on track.
Benefit from tax perks: Some accounts offer tax-free savings, giving you more return on your money.
Reduce risk: Spreading your money across different accounts means you’re less exposed to market changes or poor interest rates in one area.

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How to leverage UK savings accounts

Now, let’s explore the key UK account types and how to build them into your multi-account strategy:

1. ISAs (Individual Savings Accounts)

ISAs allow you to save up to £20,000 a year tax-free. This makes them an essential part of any savings strategy. Max out your ISA allowance if possible to shield more of your savings from tax.

2. Instant access accounts

Instant access accounts let you withdraw money whenever you need it. While the interest rates are (generally) lower, the liquidity makes them perfect for short-term goals and emergency funds. Try to keep 3-6 months of living expenses here to cover any unexpected costs.

3. Fixed-term savings accounts

These accounts offer better interest rates if you’re willing to lock your money away for a set period, typically ranging from one to five years. Use fixed-term accounts for medium- to long-term goals, such as buying a house or a big future purchase.

4. Prize-linked accounts

Instead of traditional interest, accounts like the Chip Prize Savings Account offer the chance to win tax-free prizes. Though there’s no guaranteed return, the prospect of winning big can be an exciting addition to your savings.

Prizes are not cash and are applied to your Chip account as a bonus. Prizes become cash once you withdraw your entire Prize Savings Account balance into your linked bank account.

T&Cs, eligibility criteria and minimum average balance of £10 applies. For current prize values, entry and eligibility criteria and how to opt-out see our full terms”. FSCS limits of £120,000 apply to eligible deposits. Prizes are not eligible for FSCS protection.” (if mentioning the FSCS scheme).

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Structure your savings

Here’s how a typical multi-account setup might look:

Emergency fund: Instant access account for peace of mind.
Short-term goals: Cash ISA or high-interest instant access for a holiday or new car.
Medium-term goals: Fixed-term accounts for savings you don’t need immediately.
Long-term goals: Stocks & Shares ISA or a Cash ISA for retirement or a future property purchase.
“Fun” money: Prize-linked accounts for a chance to win big.

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Tailor your strategy

The multi-account strategy is about building a system that works for your unique financial needs. Whether you’re saving for a rainy day, a dream holiday, or retirement, using multiple accounts lets you optimise every pound.

Make sure to review your strategy regularly, keeping up with the latest offers and adjusting your approach as your financial situation evolves. With a tailored multi-account system, you’re not just saving – you’re setting yourself up for financial success.

Note: Chip does not provide financial or tax advice. Tax treatment depends on individual circumstances and may be subject to change in the futureAlways consult a professional for personalised recommendations.

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