Accessing your money in an investment fund | Chip Investments FAQ
August 8, 2022
Head of Commercial
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Moving your money in and out of an investment fund is different to a savings account, we explain how it works and what you need to be aware of.
How is investing different to depositing/withdrawing money from a savings account? / Why is it slower?
This is a very different process from depositing cash into a savings account.
Investment funds are not accounts designed for easy access cash, these are financial products to help you grow your money over the long term.
When you put your money into an investment fund, you are not simply depositing cash you can easily access, you are actually buying units of that fund (see 'units' in investments basics for more on this).
There is a lead time to buy and sell your fund units, meaning it will take a few days to fully process.
When can I take my money out of a fund?
You can take your money out of one of the BlackRock Consensus funds whenever you like, just bear in the mind the lead times that when you sell fund units there will be a delay of a few days before the money becomes available to you (see more below). No withdrawal fees apply.
How long does it take to invest my money? (buying units)
When you move your money into a fund, you are effectively buying into it. This is not the same process as depositing cash into a savings account.
It can take 6 to 9 working days for your money to clear processing and be actively invested into a fund.
We’ve outlined the process below:
How long does it take to get my money out of a fund? (selling)
It can take 3 to 5 working days for your money to leave a fund and return to your bank account.
This is not the same process as withdrawing from a savings account. To take your money out of a fund you need to sell your fund units.
On the day you want to take your money you can select how many fund units you want to sell, we’ll give you a cash value estimate based on the day’s fund unit price.
But bear in mind your units will actually be sold within the next 2 working days, so the money you ultimately receive may be slightly lower or higher than this estimate. See more about this below.
Can I get back less or more than expected when selling fund units? / Why is my withdrawal amount estimated?
When you sell fund units we’ll show you an estimated value based on the day’s price, but you may get more or less back than this amount. This is because the sale of your fund units will take place 1-2 working days after you request to sell.
This is nothing to be worried about, fund units generally are less likely to suddenly shift significantly in value in a single day like with single stocks and shares trading.
This is because investment funds are spread across a wide variety of different assets (stocks & shares and bonds). In essence, even if one asset suddenly changed in value, other assets in the fund may have increased in value, negating some of the effect of the fall in the first asset.
If your fund is growing it’s likely you’ll receive more than our estimate. On the other hand, if your fund is falling in value, you may receive less than our estimate.
The fund you invested in has grown on average by 8% over the past year, making the daily average growth rate 0.0219% (8/365). If it continues at this rate over the withdrawal period, this is how it’d affect your withdrawal.
On the day you ask to sell the unit price is £1.00
You request to sell 100 units
We estimate you’ll get £100 in your bank
Your unit sale completes 1 working day after your request to sell
Over this 1 working day, the fund unit increases in value by 0.0219%
So a fund unit has gone up from £1.00 to £1.000219
You actually receive £100.02 in your bank (100 x £1.000219 = £100.02 rounded to the nearest whole penny)
Either £4.99 every 28 days (paid annually at £65.05) or £5.99 every 28 days (paid monthly)
Tax wrappers: General Investment Account, Stocks & Shares ISA
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For our Investment Platform business only Chip is an Appointed Representative of P1 Investment Management Ltd, which is authorised and regulated by the Financial Conduct Authority, under Firm Reference Number 752005.Your money may be protected up to £85,000 by the Financial Services Compensation Scheme (FSCS)under their Investment Scheme. This means that in the event Chip Financial Ltd is declared to be in default and cannot meet their obligations, you may be able to claim compensation. It’s important to understand that the FSCS doesn’t cover you in the event that your investments go down and you get back less than what you put in. Further information is available from the FSCS website (www.fscs.org.uk).
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