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About Chip Investments | Investments FAQ

Published on
August 8, 2022
Author
Tom
VP of Marketing
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Everything you want to know about Chip Investments and how they work; what funds we offer, if it's right for you, how it's different from savings, and more...

What is Chip Investments/the Chip Investment Platform? 

Chip Investments is an easy and low cost way to access investment funds, so you can grow your money and build a diversified investment portfolio in just a couple of taps. It’s an  ‘investment platform' to use the technical definition.

All you need to get started is your National Insurance number and confirm your nationality, the Open Banking magic of Chip means you don’t need to fill out any long forms.

Once you’re set up, you can access our full range of investment funds with a ChipX membership, or a set of three core funds with a ChipAI subscription.

The funds we offer are  from the largest fund manager in the world, BlackRock. Their funds bring you multi-asset investments that can put your money to work by investing in thousands of companies and a wide range of other assets (such as bonds) from around the world. Basically, instead of building your own investment portfolio from scratch, you can invest your money with an expert who’s already done the hard work.

But, before you start, please note investing in funds is different from savings, your capital is at risk – the value of your investments can go down as well as up and you might get back less than you put in (read more on this below).

However, investing in funds is generally less risky than trading individual shares, and offers something of a compromise between the low-risk/low-return safety of a savings account and the high-risk/high-return world of investing in individual shares.

Over the long term (i.e. 5-10 years) your returns should generally be higher than you’d see from savings interest, although this is not guaranteed.

And by spreading your investment across a wide variety of equities and bonds your exposure to the market is much broader than if you were investing in a single company, but your capital is still at risk.

If all of this sounds like jargon to you, don’t worry, we’ve pulled together a comprehensive list of FAQs that should help you understand investing.

How are investment funds different from savings accounts?

See below for the full answer, but as a brief overview:

Savings accounts:

Investment funds:

 
  • Your money is stored with a bank as cash.

  • The bank may pay you interest.

  • Many banks offer interest rates near 0%, the average easy access rate is currently just0.11% according to the Bank of England (latest release 04 May 2021).

  • Depending on the account it shouldn’t take more than a day or so to deposit or withdraw your money.

  • They are suitable for safety net funds as they are covered by the Financial Services Compensation Scheme (FSCS).

  • They are typically free to access, but accounts with a higher interest rates may  require large minimum deposits and you may be required to lock away your money for a set period of time.
 
  • You can access funds through our platform.

  • Your money is typically invested by a fund manager into a wide variety of assets (though, these may be focussed in one market, or asset class, depending on the fund).

  • Investment funds typically offer higher returns over the long term than savings accounts.

  • Investment funds offer the potential of returns ahead of inflation.

  • The trade-off is your money is at risk and you might get back less than you originally invested.

  • You buy and sell ‘units’ of the fund, instead of depositing/withdrawing cash.

  • It takes longer to move money in and out (up to a week or even longer).

  • They are not suitable for safety-net funds, or money you need for essential spending.

  • They are a place to grow for long term savings (think money you don’t want to withdraw for 5+ years).

  • Investment management and platform fees apply.


Savings accounts in detail

The savings accounts listed in Chip store your money as cash in a UK authorised bank.

Provided you are eligible for the FSCS guarantee this means your capital is not at risk up to the limits which apply to each banking licence, and other than the effects of inflation, you don’t need to worry about your money losing value.

Whilst the bank will typically lend your money to make a profit, and pass some of this back to you as interest, given the current level of UK interest rates, generally the value of your money will not increase.  Once inflation is factored in, the value of your money is likely to fall in real terms.

Investment funds in detail

The investment funds we offer are provided by a fund manager (BlackRock), you can buy ‘units’ of these funds (see more under ‘investments basics’ below).

A fund manager (in our case BlackRock) invests your money across multiple different assets, like stocks and shares, or government or corporate bonds, with the aim of earning returns.

This means when your money is in an investment fund your capital (money) is at risk, and there is always a chance you may get less money out than you put in. There are a number of measures investment fund managers take to mitigate this risk, but it is a risk of investing.

Are investment funds right for me?

Consider your financial position carefully before moving any money into investment funds from your savings. 

Generally they are only something you should consider if you have savings that you do not need immediate access to. Especially as it can take a few days to get your money in or out of an investment fund by buying or selling your units (see more under ‘access’ below). You should consider investments as a longer term commitment  (by which we mean 5-10 years, or more).

In essence, it is unwise to put any money into an investment fund that you may need for necessary expenses. They are a place to put your long term savings: think of your 5-10 year financial plans, not saving for a holiday. 

It’s important to understand that investment funds are not a get-rich quick scheme, and you will see times where your returns are low, stagnant, or even negative. However, over the long term it is more likely you will see a positive return on your money. 

We provide an average annual return figure as well as the full past performance data covering the history of the fund, read more about these below under the ‘Returns’ section.

What funds are Chip offering? 

We list three core multi-asset funds with the world’s largest fund manager BlackRock through our ChipAI plan.

We’re labelling them in the app:

  • BlackRock Cautious
  • BlackRock Balanced
  • BlackRock Adventurous

With a ChipX membership you have specialised BlackRock funds available.

We’re labelling these ChipX funds in the app:

  • Clean Energy
  • Healthcare Innovation
  • Emerging Markets
  • Expert Managed Cautious
  • Expert Managed Balanced
  • Expert Managed Adventurous
  • Ethical X

What are these investment funds and what assets are they made up of?

We’ve given these funds names in the app based on their risk profiles, but the names in the official documentation may differ (e.g. the BlackRock Adventurous is called the ‘Consensus 85’). See our important documents page for more detailed information.

The BlackRock consensus funds have been operating for nearly a decade and invest your money into a collection of smaller tracker funds, these contain a wide spread of equities (stocks and shares) and bonds, in markets all around the world. They are available to all users on ChipAI and ChipX.

Through our premium membership plan, ChipX, we offer further specialised BlackRock funds.

The “Expert Managed” and “Ethical X” funds are from the MyMap range, a set of funds managed by BlackRock guided by the principles of being “simple, risk-managed, cost-effective and diversified”. The MyMap range are multi-asset funds made up of exchange traded funds, index funds, stocks, bonds, commodities and cash.

Healthcare Innovation and Global Clean Energy are delivered through the iShares brand (part of the BlackRock family) specialising in exchange-traded funds (ETFs) and have been in operation for over 20 years with BlackRock acquiring iShares in 2009.

There’s also an “Emerging Markets” fund managed by Blackrock. The Fund invests at least 70% of its total assets in the equity securities (e.g. shares) of companies incorporated or listed on a stock exchange in emerging market countries.

What is ChipX?

ChipX is our premium membership plan designed to help our users level up their savings and make the most of investing with Chip.

This new plan will offer all the features included with ChipAI, additional investment funds, an exclusive app icon, early access to new features and exclusive content from industry experts.

ChipX membership costs £3 every 28 days, with an annual platform fee of 0.25% (0.5% lower than ChipAI), you can read more on our pricing page or our Eligibility and Costs guide.

Can I autosave into an investment fund?

You can’t yet send your auto-saves into your investment accounts, but it is something we’re looking at for future iterations. 

Can I directly move money from one of my cash accounts in Chip into an investment fund?

You can’t yet directly move money from any of your Chip cash accounts to an investment account in Chip.

If you would like to move money from one of your cash accounts into an investment fund you need to withdraw your money back into your linked bank account, and then move it into a fund. 

Do I get regular statements? Can I request a statement?

You will see daily performance in the app for each fund and your portfolio.

We will provide you with quarterly valuation statements for your investment funds, where you will be able to see the entire portfolio value, as well as any growth and fees on your account. You can access these using your Chip app.

Read more about investments


£0.00/28days
Basic
Tax wrappers: General Investment Account
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Access to leading saving accounts
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One of the most comprehensive wealth management tools on the market. Adds full access to our range of investment funds, with no platform fees in either a GIA or ISA, as well as exclusive access to our Alternative Assets platform.
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All the investment funds from the basic plan plus: Ethical funds, Commodity funds, thematic funds, Crypto Companies Fund and BlackRock actively managed funds
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Build your long-term wealth, at every stage of your life. Access to everything from the previous tiers, we will be looking to add JISAs, managed portfolios and more in the future.
Everything from previous tiers +
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For these plans we’ll be working closely with our communities to iron out the details. Get involved in the discussion on the community forum here
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Full, unlimited and premier access to every product, tax wrapper and feature Chip offers
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