Every month, the Office for National Statistics (ONS) releases the latest figures on the UK labour market from its Labour Force Survey (LFS). While this data is obviously important news for job seekers and politicians, it is also one of the most closely watched days in the calendar for investors. 

The Unemployment Rate represents the percentage of the labour force that is without a job but is actively seeking work. It’s important to note that this figure doesn’t include everyone who isn’t working. Students, retirees, and those not looking for a job are classified as ‘economically inactive’. 

When investors are interpreting unemployment figures, they’re typically looking for three things:

1. The headline rate: Is this figure going up and down? 
2. Wage growth: Are pay packets getting bigger?
3. Vacancies: Are companies trying to hire?

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Why do investors care?

For investors, employment data is a key economic health indicator and can be a key catalyst for other key indicators. It can have a direct effect on interest rates, consumer spending and inflation. 

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The link to interest rates

This is the biggest reason the markets care about jobs data. Unemployment is a key data point for the Bank of England Monetary Policy Committee when determining their base rate of interest, which determines the cost of borrowing for other banks. 

If unemployment is low: businesses are in greater competition over staff, pushing wages higher. When wages increase, so does consumer spending, and inflation can follow suit. The Bank of England may raise interest rates to stop the economy from ‘overheating’. Higher rates are tougher on borrowers, and cause markets to dip as debt becomes more expensive. 

If unemployment rises: this suggests a potential slow down in the economy, and the Bank of England may cut interest rates to try and stimulate growth. Lower rates are often welcomed by markets and investors, as they make borrowing cheaper and encourage spending.

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The link to corporate profits

The UK economy is heavily driven by consumer spending, and this has strong links to employment.

When jobs are safe (low unemployment): People buy cars, book holidays and subscribe to services. This pushes profits up for consumer goods and services companies like airlines, high-street shops and restaurants.

When jobs are at risk (high unemployment): Consumers tighten their fists and generally stick more to essential spending. In this environment, consumer essentials suppliers like supermarkets and utilities tend to show more resilience, whilst higher end discretionary spending like luxury goods and leisure suffer.    

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The ‘good news is bad news’ conundrum

Drawing a clear link between job growth and a robust economy can be tricky, and the stock market's reaction to positive employment data is not always consistent. 

This often happens due to inflation fears. If the job market is doing ‘too well’, investors’ inflation fears deepen, and predictions of Bank of England rate increases can dampen market spirits. Markets prefer a stable number that shows a strong economy, without being so strong inflation fears creep in. 

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Read our full guide on economic indicators investors should watch out for.

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We want to build something game-changing

We’re working on something exciting at Chip HQ – an AI powered guidance tool designed to give you personalised financial guidance.

Traditionally, financial guidance and advice has been out of reach and expensive. We think that new technology can make financial guidance smarter, faster and most importantly – more accessible to everyone.

In this blog we’ll share with you why we’re building it, what it will mean for your money, and how in the future, this new tool could bring you a level of personalised support that was previously only available to a select few.

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Why we are building an AI guide

One of the most common pieces of feedback we hear is: “I have savings, but I don’t know if I am on the right track to achieve all my plans.”

For over eight years, we’ve been helping people grow their wealth, but we know saving is only the first step. The real challenge is figuring out what comes after.

That’s why we’re building a personalised AI guide: to make financial guidance available to everyone.

With the game-changing power of AI, we would be able to help our customers not just save, but help them achieve their ambitions and goals too.

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The vision: what our AI will do

The concept is to start with an AI guide to help you understand your goals and how you can achieve them faster.

Our ambition will be to evolve it into a powerful tool that can build a personalised guide to plan your entire wealth journey.

However, a quick caveat: there’s no shortcuts to us building this - we’ll need to do a lot of hard work with the regulator to make sure we’re doing this properly and explore the best way to build it (it’s cutting edge stuff!).

But here’s our ultimate vision of where we want to take it.

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Start with a conversation

Imagine this: discuss your goals and ambitions — where you are now and where you want to get to.

Chip’s AI wealth guide would then build a personalised guide based on this conversation, suggesting which savings and investments accounts to open, how much to put into a pension vs an ISA, what short and long term goals to set, and recommend an automated plan to effortlessly top up your savings.

You would be able to review the suggestions, easily tweak them to fit your needs in an open discussion and when you’re happy, you simply say “make it so” and Chip’s AI could crack on with the leg work – opening the accounts, initiating deposits, transfers, with all the admin done for you.

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You’re in control

Let’s be very clear: this wouldn’t be about surrendering control of your money. You would have complete authority and full visibility in the app, with clear graphs, portfolio views, and progress trackers to keep you on top of your goals.

You’d be able to pre-program nudges for yourself and book in regular reviews, and at any time simply discuss with the AI to update the plan for you if your ambitions grow or circumstances change.

We believe that this will help you achieve your financial goals with greater simplicity and confidence.

And don’t worry, you’ll always be able to interact with a real person at Chip when you need us.

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How we’re building it

You would interact with the tool through a large language model (LLM) – think of it as your conversational guide, ready to answer questions and help you navigate financial decisions.

Behind the scenes, an intelligence layer will analyse your data to provide personalised, actionable recommendations tailored to your situation.

And of course, we’ll be rigorously testing the AI and putting strong guardrails in place, so everything stays compliant, safe, and focused on delivering the best outcomes for you.

We’ve already applied to join the Financial Conduct Authority’s (FCA) development “sandbox”  which would allow us to test it alongside the FCA. If granted approval, we will have support from the regulator and access to the Nvidia AI Enterprise software suite which will accelerate our ability to build and refine our AI tech stack further.

Our ultimate goal, as we say above, is that our AI wealth guide will be able to connect to your accounts, offering actionable recommendations and taking the heavy lifting off your shoulders – bringing you the sort of service that was previously reserved for the very wealthy.

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The wider context: why we’re doing this

There are big changes coming together in our industry right now:

1. A game-changing new technology

The use of AI has exploded over the past couple of years, since ChatGPT first burst onto the scene in 2023.

We believe we can be at the cutting edge of this technology in our sector as we’ve seen a huge opportunity to leverage AI to disrupt the financial advice sector and bring advice to everyone.  

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2. Once in a generation reforms

Adding to the mix, the Financial Conduct Authority (FCA) has just introduced a “once-in-a-generation”¹ reform to the financial advice industry, allowing firms to offer targeted support to customers, opening up the door for innovation here at Chip.

The FCA’s research shows the gap we can close:

• 24% of people with over £10,000 in cash savings don’t invest because “they don’t know enough”
• 12% feel overwhelmed by the number of options
• 8% say they need more support before investing

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3. A legacy industry ripe for disruption

We think the legacy advice providers and currently available wealth services leave a lot of room for improvement.

We’re not alone - you might have heard the term ‘advice gap’ where people who could benefit from advice are not being served by the currently available services.

These services are seen as exclusive, only open to the very wealthy and expensive - typically costing anything between £500 and £5,000+ a year.

Or to quote the 2025 Advice Gap report:

“It seems there are a significant number of people who need advice and would benefit from it, whether that’s financially or from the peace of mind that advice brings.

“But they can’t access it because it either costs too much, or the services they need are just not profitable at those levels for companies. Finding a solution would not only help those people but open up a huge untapped client list.”

Whilst we don’t believe AI can fully replace the world of face-to-face human consultations at the moment, it’s clear that this legacy advice model can’t provide service at scale, and stops many millions of people who could benefit from the advice seeking it out.

We believe we are very well placed to build an AI that can fill this gap in the market – delivering real value to Chip customers while opening the door for millions of people across the UK who want financial guidance, but are currently under-served.

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Where this will take us

We’ve spent much of the last eight years putting as many tools, products and accounts in the palm of your hands as possible, so you can build your wealth at the tap of a button.

But now, we’re presented with a game changing moment to tie it all together with a personalised user experience powered by AI.

Essentially, you’ll have everything you need to build and grow your wealth in a couple of taps across cash, investments, pensions (and eventually even more).

But also, you’ll have a guide that listens to what you want, asks about your goals, and builds a plan around your needs that is personal to you.

There’s many people who are ready for better guidance and as one the UK's fastest growing companies, we are built to move quickly and capture a share of this £2.4 trillion² financial advisory market.

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Please note it will not have direct control over your finances and all of Chip’s AI solutions will operate exclusively inside our own infrastructure.  This will be an optional in-app service.

Source:

1 Financial Conduct Authority

2 St. James's Place

Climbing the property ladder

For many, buying their first home is a major achievement, but it’s rarely the “forever home.” As careers evolve and families grow, the need for a larger or different space often arises. Here’s how to successfully navigate moving up the property ladder:

Step 1: Assess your position

• Home valuation: Get your home valued by at least three estate agents to ensure accuracy. Ask them to explain how they arrived at their figures.
• Mortgage check: Review your current mortgage balance and term. Determine if it's portable if you have several years left.
• Equity calculation: Decide whether to sell your current home or keep it as an investment. Calculate the equity you can leverage for your next property.

Step 2: Set your target

• Define requirements: List what you want in your next home and prioritise your needs—e.g., is a south-facing garden more important than a new kitchen?
• Research areas: Investigate property types and average prices in your desired locations, considering factors like proximity to transport and schools.

Step 3: Create your savings plan

• Deposit target: Aim to save at least 20% of the new property's value for your deposit.
• Budget for costs: Account for legal fees, stamp duty, and moving expenses. Always set aside a contingency fund for unforeseen repairs.

Step 4: Optimise your savings

• Savings accounts: Utilise high-interest savings accounts or short-term  cash savings bonds.
• Mortgage offset: Consider an offset mortgage to reduce interest payments and build equity faster.

Step 5: Boost your borrowing power

• Credit score improvement: Regularly check and improve your credit score.
• Overpayments: Consider overpaying on your current mortgage to increase equity.

Step 6: Time your move

• Market awareness: Watch the property market and interest rates. The market tends to slow down in winter, which can be a good time to make offers.
• Acting on opportunities: Be prepared to act when conditions are favourable.

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Funding your child’s education

Education can be a significant financial commitment, whether you're covering private school fees, university costs, or extracurricular activities. Here’s how to effectively save for your child's education:

Step 1: Estimate the costs

• Research fees: Investigate current and projected costs for schools and universities, factoring in annual increases of 3-5%.

Step 2: Set your timeframe

• Funding timeline: Determine when you'll need the funds, whether it's for school in five years or university in 18 years.

Step 3: Choose your savings vehicles

• Short-term options: For savings needed in 5-10 years, consider cash ISAs or fixed-rate bonds.
• Long-term investments: For longer horizons, explore Stocks and Shares ISAs or Junior ISAs.

Step 4: Create a regular savings plan

• Direct debits: Set up monthly contributions to your chosen accounts, aiming to cover at least 75% of projected costs through savings.

Step 5: Explore additional funding options

• Scholarships and bursaries: Research available funding opportunities.
• Funding strategies: Consider how much you'll contribute through income or loans when necessary.

Step 6: Review and adjust regularly

• Annual Reassessment: Review your savings plan each year and adjust contributions to keep pace with inflation and fee increases.
  

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Planning for early retirement

The FIRE (Financial Independence, Retire Early) movement encourages individuals to save aggressively to retire well before the state pension age. If that appeals to you, here’s how to plan for an early retirement:

Step 1: Define your early retirement

• Target age: Decide on your ideal retirement age based on your lifestyle and career goals.
• Desired income: Estimate how much income you'll need, aiming for 25 times your expected annual expenses.

Step 2: Assess your current position

• Pension review: Calculate your current pension pot and growth projections, including your State Pension forecast.
  

Step 3: Identify the shortfall

• Gap analysis: Determine the difference between your current savings trajectory and your retirement goals, considering inflation and market fluctuations.

Step 4: Maximise your pension contributions

• Employer benefits: Take full advantage of workplace pensions, especially if your employer offers matching contributions.
  

Step 5: Diversify your retirement savings

• Flexible savings: Utilise ISAs for tax-efficient savings and consider property or managed funds for additional growth.
  

Step 6: Create additional income streams

• Passive income: Explore rental properties or dividend-paying investments.
• Part-time work: Consider how part-time work can supplement your income in early retirement.

Step 7: Optimise your investments

• Portfolio review: Regularly assess and rebalance your investment portfolio, gradually shifting to lower-risk assets as you approach retirement.
  

Step 8: Plan for healthcare costs

• Health insurance: Consider private health insurance or establish a healthcare fund for potential long-term care expenses.

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Conclusion

Saving for life’s major milestones requires careful planning, discipline, and adaptability. By breaking down your financial goals into actionable steps, you're not just dreaming about your future; you’re actively shaping it.

These plans are flexible; life can be unpredictable, and successful savers adapt their strategies to accommodate changes. Regularly reassess and adjust your plans, seeking professional advice when needed.

Whether you’re aiming for your dream home, securing your child's educational future, or planning for early retirement, the key is to start early and remain committed. With these strategies, you’re well on your way to achieving your financial aspirations.

We need to stop supporting Chip on an older version of Apple Operating System (OS), iOS 15. This is due to it no longer being supported by Apple’s security updates.

If your device is on iOS 15, and you don’t / won’t / can’t update to a newer version of iOS, you no longer be able to access your Chip app.

This is most likely to affect you if your phone is around 10 years old, and/or you don’t have automatic iOS updates switched on.

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What this means

This means after 23 July 2025 you won't be able to log in to Chip using a device running iOS 15 unless you update to a newer version of iOS.

If you use an older Apple device (i.e. around 8-10 years old) you may need access to a newer device that supports a  newer version of iOS, as older Apple devices don’t always support the newer operating systems.

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How to find which version of iOS you're on

You can double check this on your phone by navigation Settings > General > About and look for ‘iOS Version'.  

Apple offers a guide to find the software version on your iPhone, iPad or iPod touch.

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How to update

It’s easy to update your phone, simply open your device, go to Settings > General, then tap Software Update.

Apple offers a clear and simple guide here, which also covers how to switch on automatic iOS updates.  

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Why are we doing this?

If you’re confused about the above, here’s a quick explanation.

Your device’s software is powered by an Operating System (OS) called iOS, which is built and maintained by Apple.

Apple regularly releases new versions of iOS to make your phone work better and keep you safe. The latest version is iOS 18.

Apple no longer maintains or releases security updates for iOS 15.

This means we can’t guarantee the security of Chip accounts using our app on devices running iOS 15.

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What if you can't update?

After 23 July 2025 you won't be able to log in to Chip on a device running iOS 15.

You should be able to update your device to a newer version of iOS, but if your phone is 8-10 years old you may need to get access to a newer, supported device.

If this is not possible for you, you may wish to consider withdrawing your money and closing your account before 23 July 2025.

However, if you don’t withdraw, your account will remain open and secure, and you'll be able to access it at any time using a newer device.

Finally, as a Chip customer you can contact us in writing or via email to withdraw your money (note there will be additional security measures and identification you’ll need to provide).

If you have any further questions don’t hesitate to drop into your in-app customer support.

What are the biggest companies in Japan by market cap?

This list ranks the biggest public companies in the Japanese market by market capitalisation. We’ll also highlight other key figures, such as revenue, gross profit, and 1-year return. Key facts like the company's exchange, founding year, and country are also covered.

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1. Toyota Motor Corp. 

• Market cap: $246.8 billion
• Revenue: $329.03 billion
• Gross profit: $63.5 billion
• 1-yr return: +14.38%
• Exchange: TSE
• Year founded: 1937
• Country: Japan

Designs, produces, and sells a wide range of vehicles across several brands. Their philosophy is key to their success, focusing on eliminating waste and continuous improvement (“kaizen”). This has built them a reputation for quality and long-term reliability. 

• Automotive sales: Largest source of revenue generated from sales of their core Toyota brand, their luxury division Lexus, and other brands like Daihatsu (small cars) and Hino (trucks). 
• Hybrid technology: pioneer of hybrid tech with the iconic Prius, with future strategy focusing on a diverse approach to electrification, and investment in next-gen electric cars and solid-state batteries. 

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2. SoftBank Group Corp. 

• Market cap: $194.89 billion
• Revenue: $25.74 billion
• Gross profit: N/A
• 1-yr return: +137.88%
• Exchange: TSE
• Year founded: 1981
• Country: Japan

A multinational conglomerate holdings company renowned for making huge, bold investments in the world’s boldest and most innovative tech companies.

• Vision fund: one of the world’s largest venture capital funds, with multi-billion dollar investments in late-stage startups and public companies across sectors like Artificial Intelligence (AI), biotech, and fintech.
• Arm holdings: its most valuable asset is its huge stake in the British firm that designs chips for most of the world’s smartphones, whilst maintaining interests in telecommunications and other technology assets. 

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3. Mitsubishi UFJ Financial Group 

• Market cap: $174.52 billion
• Revenue: $81.70 billion
• Gross profit: $8.28 billion
• 1-yr return: +59.18%
• Exchange: TSE
• Year founded: 2001
• Country: Japan

Japan’s largest bank and one of the world’s leading full-service financial institutions.

• Retail and commercial banking: serving millions of customers and businesses across Japan through its main banking unit, MUFG Bank, offering a full suite of services from deposits and loans to wealth management.
• Corporate and investment banking: provides large-scale financing, treasury, and securities management services to multinational corporations and institutional investors globally. 

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4. Sony Group Corporation

• Market cap: $171.37 billion
• Revenue: $85.36 billion
• Gross profit: $25.13 billion
• 1-yr return: +60.77%
• Exchange: TSE
• Year founded: 1946
• Country: Japan

A huge Japanese conglomerate that has evolved from a legendary electronics maker into a global entertainment and technology giant. 

• Entertainment empire: Sony Gaming produces the iconic PlayStation, Sony Music is one of the world’s largest record labels, and Sony Pictures produces major Hollywood films and TV.
• Technology: leader in high-end consumer electronics like Bravia TVs and Alpha camera, but its most critical business is imaging and sensing solutions, where it is a world leading manufacturer of the camera sensors used in a majority of smartphones, including the iPhone. 

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5. Hitachi Ltd.

• Market cap: $130.93 billion
• Revenue: $85.36 billion
• Gross profit: $19.29
• 1-yr return: +18.35%
• Exchange: TSE
• Year founded: 1980
• Country: Japan

An industrial conglomerate that’s evolved from a heavy industry giant to a technology leader focused on IT and social industry.

• Digital systems and services: IT solutions for its business customers focusing on data storage, AI, and its ‘Lumada’ Internet of Things platform (connects physical machinery to digital analytics).
• Green energy, mobility and connective industries: build and maintain critical infrastructure, from high speed rail, power grids, construction machinery and advanced automotive components.

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6. Sumitomo Mitsui Financial Group 

• Market cap: $104.08 billion
• Revenue: $64.18 billion
• Gross profit: N/A
• 1-yr return: +33.19%
• Exchange: TSE
• Year founded: 2002
• Country: Japan

One of Japan’s largest ‘megabanks’, SMFG is a major global financial institution and holdings company that operates globally in retail, corporate, and investment banking.

• Sumitomo Mitsui Banking Corporation: the group's main subsidiary, providing retail and commercial banking services to millions of individual customers and corporate clients across Japan.
• Corporate and investment banking: serves multinational clients with project financing and trade finance, alongside its securities division, SMBC Nikko Securities, which handles brokerage and underwriting. 

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7. Nintendo Co.

• Market cap: $98.33 billion
• Revenue: $10.12 billion
• Gross profit: $5.04 billion
• 1-yr return: +65.57%
• Exchange: TSE
• Year founded: 1889
• Country: Japan

World famous pioneer of the video game industry. The mastermind behind the Wii, DS, Switch and a range of iconic games.

• Consoles and hardware: core focus of the business, having evolved from the iconic Nintendo 64 and GameCube, to the Switch and 3DS.
• Games: some of the world’s most valuable entertainment intellectual property, such as Super Mario, The Legend of Zelda, and Pokémon franchises, which are being expanded into movies and theme parks.

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8. Fast Retailing Co. 

• Market cap: $95.33 billion
• Revenue: $22.75 billion
• Gross profit: $10.80 billion
• 1-yr return: -2.63%
• Exchange: TSE
• Year founded: 1949
• Country: Japan

Global fashion retail holding company that owns big names such as UNIQLO, GU, Theory and Helmut Lang.

• UNIQLO: core business offering, operating thousands of stores worldwide. They focus on producing high-quality, functional and affordable basic apparel for a mass audience.
• Other brands: focus on greater affordability through GU, and more premium offering through Theory.

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9. Keyence Corporation 

• Market cap: $92.19 billion
• Revenue: $7.27 billion
• Gross profit: $6.08 billion
• 1-yr return: -12.61%
• Exchange: TSE
• Year founded: 1972
• Country: Japan

A global leader in the development and manufacturing of factory automation sensors, measurement systems, and other industrial electronics.

• Tech: its core business involves creating high-tech products like sensors, vision systems, and laser markers that are essential for automating production lines in industries such as automotive, electronics, and food packaging.
• Sales: the company is renowned for its unique direct-sales business model, where a highly-trained salesforce works directly with customers on-site to solve complex engineering problems, leading to exceptionally high profit margins and a deep understanding of market needs.

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10. Mitsubishi Corporation

• Market cap: $88.25 billion
• Revenue: $123.26 billion
• Gross profit: $11.27 billion
• 1-yr return: +15.42%
• Exchange: TSE
• Year founded: 1950
• Country: Japan

Japan’s largest general trading company, Mitsubishi is a vast conglomerate that trades in nearly everything and acts as a major global investor.

• Commodities and products: traditional business trades everything from sourcing and distributing energy, metals and chemicals to food and machinery.
• Strategic investor: takes significant ownership stakes in businesses and develops large-scale industrial projects, such as power plants, mining operations, and retail enterprises around the world.

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What are the biggest companies by total annual revenue?

• Toyota Motor Corp.: $320.52 billion 
• Honda Motor Co Ltd.: $144.71 billion 
• Mitsubishi Corporation: $124.23 billion 
• Itochu Corporation: $98.18 billion 
• Mitsui & Co Ltd.: $97.78 billion

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What are the biggest companies by workforce?

• Toyota Motor Corp.: 383,850
• NTT Inc.: 341,320 
• Sumitomo Electric Industries Ltd.: 288,140
• Hitachi Ltd.: 282,740 
• Japan Post Holdings Ltd.: 218,720

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Summary

Understanding a company's performance is crucial; it's how you truly know what you own. These metrics directly drive the value of your stocks and funds. When you understand these key drivers, you can navigate market changes with confidence, rather than just reacting to headlines.

Next we’ll be looking at the biggest companies in the USA by market cap.

All market data sourced from TradingView and company reports as of 06.10.2025.

What is Open Banking?

Open Banking is a set of rules that require banks to let you share your financial data with authorised providers, such as money management apps or websites.

By doing so, you can give these providers read-only access to your spending transactions, regular payments, and account balance. 

The idea behind this is to make it easier for other organisations to use your data to personalise their products or provide suggestions on areas where you can save.

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How is Open Banking Used?

Open Banking has paved the way for a variety of useful ‘money management’ websites and apps. These can use your financial data to offer you a personalised service or make recommendations on ways to save based on your spending habits. 

For example, automatic savings apps analyse your current account data, such as your available balance, and calculate how much you can afford to save. The app then moves the calculated amount into a savings account automatically.

Additionally, Open Banking has made online payments more convenient and secure. Certain online retailers can now connect directly to your bank, eliminating the need to fill out your card details. 

HMRC also offers a ‘pay by bank account’ Open Banking option for a number of tax bills, such as self-assessment tax returns, Capital gains, and Stamp duty. Learn more here.

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Is Open Banking Safe?

With all the data being accessed and payments being made, it's natural to wonder if Open Banking is safe. 

As long as providers are authorised and have the relevant FCA permissions, they can only access data needed for the service you’ve signed up to.

This means that if you've asked a provider to look at your current account with one bank, they wouldn’t be able to look at your credit card details with that bank without your permission.

Moreover, all providers must comply with data protection rules, including UK GDPR. Before you sign up, the provider should tell you which data they will use, how long they will keep it, and what they will do with it. 

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How does Open Banking work?

Each provider will ask for your consent to access your information when you sign up. They will then send a request to your bank, which will process and share your details through secure technology called application programming interfaces (APIs). 

APIs simply allow two providers to ‘talk’ to each other and pass on the information you’ve given permission to share, such as your bank balance and regular payments.

You can also withdraw your permission at any time. Additionally, providers are required to get renewed permission from you every 90 days, which gives you the opportunity to rethink whether you want to continue using that provider.

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Open Banking Summary

In conclusion, Open Banking is generally considered to be a safe and convenient way to share your financial data with authorised providers. 

With the variety of useful apps and websites available, it can help you manage your money more effectively and make online payments more secure. Remember, if you’re unsure about anything, always ask before giving access.

How does a Savings Account Work?

‍Banks tend to offer a range of savings accounts with various interest rates. When you deposit money into a savings account, the bank will usually pay a small amount of interest on that money, which means that your balance will grow over time.

You can usually withdraw money from a savings account at any time unless it’s an account which requires you to send a notice to withdraw funds.

In general, savings accounts are a safe and easy way to help save money and earn interest on that money too. Learn some money saving tips.

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What Types of Savings Accounts are available in the UK?

‍There are a variety of savings accounts available in the UK. Some of the more common accounts are:

1. Easy Access Savings Account: This type of savings account allows you to deposit and withdraw money at any time, typically with no notice period or penalty for withdrawals. They usually have no minimum deposit requirements. Learn more.
2. Notice Savings Accounts: These accounts require you to give notice before making a withdrawal, usually 30, 90 or 120 days. Notice accounts tend to have a higher interest rate than easy access accounts.
3. ISA (Individual Savings Account): ISAs are tax-free savings or investment accounts that allow you to save money without paying tax on the interest earned. There are different types of ISAs, such as cash ISA or stocks and shares ISA.

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

It’s always important to do your own research into the various savings accounts available and find one that best fits your needs.

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Opening up a Savings Account

‍It’s typically very simple to open up a savings account. However, you should make sure you do your research to ensure you open a savings account that’s right for you. Some tips for finding the right savings account include:

1. Interest Rate: Look for savings accounts that have a high AER (annual equivalent rate). The higher the AER, the more interest you can earn through deposits and the account balance. Learn more about interest rates.
2. Fees: Some savings accounts may come with fees, which could be for monthly maintenance or fees for withdrawing. Make sure you check the terms and conditions to ensure you don’t have to pay unexpected fees.
3. Accessibility: You should consider whether your cash can be instantly accessed or you need to give notice to withdraw funds. As a general rule you shouldn’t put savings you may need to access instantly in notice or fixed term savings accounts.
4. Minimum Deposit Requirement: Some savings accounts require a minimum deposit to open the account, while others don’t. Choose an account that best fits your financial situation.

It’s a good idea to shop around and compare the different savings accounts available, to find the one that best fits your needs.

‍Interest rates reflect the cost of borrowing money. When you take out a loan you are charged interest on the amount borrowed.

AER stands for "Annual Equivalent Rate" and it is a way to express the interest rate on a savings account or other type of deposit account in a way that makes it easy to compare the effective rate of interest you will receive. 

AER takes into account the effect of compound interest and expresses the rate as if interest were paid and compounded once per year. So AER is a standardised way to compare the interest rates across different accounts, and make sure you understand the interest you earn.

Interest rates are also relevant to savings accounts but for this, they are usually referred to as the “yield” or “return” on your deposits. 

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Why Do Interest Rates Change?

There are several factors as to how interest rates are determined. This includes the monetary policy of the central bank (such as the Bank of England), the strength of the economy and the overall level of inflation.

1. Inflation: When inflation is high, it means the purchasing power of money is decreasing and requires more money to purchase goods and services. Raised interest rates make borrowing more expensive which can slow economic growth whilst reducing inflation.
2. Economy: If the economy is struggling and unemployment is high, central banks, such as the Bank of England, could lower interest rates to encourage borrowing and spending. This can help stimulate economic growth.
3. Monetary Policy: Central banks can use a variety of tools to control the money supply and interest rates in the economy. For example, buying or selling government bonds on the open market can influence interest rates and the supply of money. Governments can also have an influence on interest rates through policy decisions.

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What Types of Interest Rates Are There? 

There are several different types of interest rates which can apply to different types of financial products. The two common types of interest rates are:

1. Fixed Interest Rate: A fixed interest rate is when an interest rate remains the same over the life of a fixed term or other financial product. For example, a fixed-notice account means it’ll have the same interest rate for the entire fixed term period. 
2. Variable interest Rate: A variable interest rate is when an interest rate can change over time. This is typically based on an underlying index such as the prime rate, market conditions and is dictated by the bank's strategy and control.

There are different types of interest rates that can impact the overall cost of a loan. It’s important to understand the type of interest rate that applies to any given product before making a financial decision.

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How Do Interest Rates Affect My Savings?

Interest rates can affect and benefit your savings account by increasing the amount of money you earn on your deposits. Often, when you deposit money into a savings account, the bank pays you interest on that money. This is expressed as an annual percentage of the total deposit. 

When interest rates are high, it means you can earn a higher return on your savings. This can help your money grow faster. High-interest rates can also help you protect the value of your cash against inflation. This means that your savings lose less value over time. 

Interest rates can vary widely between different types of savings accounts and between banks. It’s always important to do your research into savings accounts and banks to ensure you’re getting  a competitive interest rate and that your money is protected by initiatives such as the FSCS (Financial Services Compensation Scheme).

How do Stock Markets Work?

Stock markets are essentially auction houses for shares. Companies list shares to raise money – this is called an Initial Public Offering (IPO), and investors can then buy and sell those shares with each other on an exchange.

Prices change in real-time, depending on how many people want to buy or sell a stock. 

The major stock exchanges (like the NYSE or London Stock Exchange) have set opening hours and are highly regulated to try and ensure trading is fair and transparent.

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How do Stocks Work?

When you buy a stock, you’re buying a small piece of a company – a share in its ownership. If the company performs well and becomes more valuable, so do your shares – and you! 

You can also earn money through dividends, which are portions of the company’s profits paid out to shareholders. 

Of course, the value of stocks can go down too. If the business performs poorly or market conditions shift, your investment can lose value. More information about how stocks work.

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Understanding the Stock Market

The stock market isn’t a singular place where all stocks are traded –  it’s made up of lots of exchanges, sectors, industries, and regions. Tech, healthcare, energy, retail all react differently depending on the economy, news and investor sentiment.

That’s why most investors don’t just pick one stock and hope for the best. Instead, they build a diversified portfolio to spread their risk (more on that in the next section). Learn about investment portfolio management.

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Why does the Stock Market go up and down?

In short: confidence and expectation. When investors are optimistic about a company or the economy, they tend to buy, which pushes prices up. When uncertainty hits (interest rate hikes, political instability, global events, natural disasters), investors might panic and sell, which drives prices down.

These ups and downs are part of the deal when you’re investing. They’re known as market fluctuations or volatility.

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What is Market Volatility?

Volatility refers to how much – and how quickly – the price of an investment changes. High volatility means big up and down price swings. Low volatility means steadier, more predictable price movements.

Volatility is normal and often driven by short-term news, but it doesn’t always reflect the long-term value of a company. That’s why many investors focus on time in the market rather than trying to time it perfectly.

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Global Stock Market Indices

Market indices track the performance of a specific group of companies, giving you a snapshot of how that part of the market is doing. Some of the most well-known include:

• FTSE 100 – Top 100 companies listed in the UK
  
  
• S&P 500 – 500 of the biggest companies in the US
  
  
• Nasdaq – Primarily tech companies in the US
  
  
• Nikkei 225 – Major companies listed in Japan
  
  

You can’t invest in an index directly, but you can invest in index funds or ETFs that aim to track them, which is a great way to get broad market exposure. What are asset classes?

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How to Invest in the Stock Market?

You can access the stock market through an investment platform or app (like Chip), and typically you’ll invest via one of the following:

• Stocks & Shares ISA – for tax-efficient investing
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• General Investment Account (GIA) – flexible, no contribution limits

You can invest in popular stock market indices by investing in index funds that track their performance directly, such as the S&P 500, FTSE 100 and the Nasdaq.  

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Investment Portfolio Management

Once you’ve got to grips with the basics of the stock market, and the different asset classes available to invest in, you’ll want to figure out the type of investment portfolio management style to suit you. 

The next guide in our series takes you through the options in more detail. 

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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.