How we protect your money

Published on
October 18, 2021
4 min read
Head of Compliance
Join our newsletter
Sign up to hear exclusive news and product updates.
By subscribing you agree to with our Privacy Policy
Thanks! You're added to the list.
Oops! Something went wrong while submitting the form.

"Are my savings safe with Chip?" Kayne, our compliance manager walks through how we keep your money safe, he goes into all the detail.

Your savings should make you feel safe, so we work hard to make sure you enjoy the highest levels of protection.

We’re authorised by the Financial Conduct Authority (FCA) as a payments institution but we’re not a bank. This means that in different scenarios your money is protected in different ways.

Where your money is covered by FSCS

Once your money is in a savings account it’s held by a UK authorised bank and covered by the Financial Services Compensation Scheme (FSCS) should the bank or building society providing that product fail.

What is FSCS?

The FSCS is an independent organisation, set up by parliament, which can step in to pay compensation if authorised firms fail.

The compensation limit is £85,000 of eligible deposits per banking licence. If you have money with different banks and building societies who share the same licence, you’ll only have a total of £85,000 protection through the FSCS.

If you split your money across banks and building societies who don’t share a banking licence, you’ll have higher protection.

All of the savings accounts we list are covered by FSCS. You can find out more about the FSCS and your eligibility through their website.

How FSCS cover works for money held in trust accounts

For all savings accounts other than the Chip Prize Savings Account and Chip Instant Access Account, both powered by ClearBank, your money is held in a ‘segregated client trust account’ with other Chip savers’ money. By pooling all Chip savers’ money our partner (Flagstone) can negotiate better interest rates for you from the banks.

A trust account is held in the name of one of our partners, ClearBank or Flagstone, depending on the product and its terms. Once you deposit into your savings account, you are an individual beneficiary of this trust for the amount of money you have deposited (plus your interest) - you are absolutely entitled to this money.

As an individual beneficiary, your money will be FSCS eligible in the unlikely event there is an issue with one of the partner banks, and either ClearBank or Flagstone, depending on the product, will carry out the FSCS claim on your behalf provided you are eligible (see more on FSCS above).  

What is a Segregated Client Trust Account?

This refers to an account of individuals’ (clients) money that has been combined together, and is held in trust by a business and managed on behalf of those individuals.

What happens if the bank providing a savings account fails?

If the bank or building society were to fail, the FSCS will protect your money up to £85,000 per banking licence provided you are eligible.

It may take longer to receive your money from the FSCS than if you saved directly with the bank or building society. But as a guide, the FSCS aims to make all payments back to savers within three months.

What happens to my money in a savings account if Chip fails?

As your money is held by the bank who provides the account, it will not be affected in the unlikely event that we go out of business and will still be covered by FSCS.

Does FSCS cover work for money I have in an investment account?

You are covered by FSCS for money you have in an investment account.

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

For our investment platform, 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.

Seccl Custody Limited acts as the custodian for the money held in a Stocks and Shares ISA or General Investment Account (GIA) with Chip. We use Seccl to provide the behind the scenes technology that powers our investment Platform, and Seccl is responsible for holding your cash and investments.

However, you won’t need to liaise with them, and Chip’s support team can handle all your queries. You don’t pay any fees to Seccl. Seccl Custody Limited is authorised and regulated by the Financial Conduct Authority under Firm Reference Number 793200. You can read more about them here:

If you are eligible, you could make a claim for up to £85,000 by the Financial Services Compensation Scheme (FSCS) under their Investment Scheme.

This means that in the event Seccl, P1 Investment Management Limited or Chip Financial Ltd is declared to be in default and cannot meet our obligations, you may be able to claim compensation.

Further information is available from the FSCS website (

How we protect your money that isn’t covered by FSCS

Money that we are moving for you is protected through the FCA’s ‘safeguarding’ rules, but it isn’t protected by the FSCS if we fail.

How are pending transactions (deposits, autosaves, recurring saves, and withdrawals) protected?

This money is not covered by FSCS, but it is protected through the FCA’s safeguarding rules.

Your money is kept separately from our own company money in a safeguarded account with an approved bank (currently ClearBank Ltd) that creditors can’t access.

There’s no limit to the amount protected through safeguarding, but some costs could be taken by the administrator or liquidator if we were to fail. This could impact the amount that you receive, and it could take longer to get your money back than if it were held directly with a bank.

What is safeguarding?

Safeguarding is another way of protecting your money. It’s a set of rules, governed by the FCA, which are designed to ensure your money is kept safe. It requires firms to either keep your money separate from their own, or protect it with an insurance policy or similar guarantee. All authorised payment institutions must safeguard your money.

You can find out more about safeguarding on the FCA’s website.

What would happen if the safeguarding bank fails?

In the unlikely event that ClearBank Ltd were to fail, and your funds were in the safeguarding account, then your funds would not be FSCS eligible. You would have a contractual debt claim against the bank for your outstanding funds, but there is no guarantee that they will be returned to you.

UK banking rules require banks to hold sufficient capital to meet their costs and ensure against creditor calls in the event of liquidation, but your funds would not be protected by FSCS.

Tax wrappers: General Investment Account
Build your long-term wealth, free of charge. For those who want great savings accounts, and access to basic investment funds.
Access to leading saving accounts
General Investment Account with a selection of funds
FTSE 100, S&P 500 and BlackRock Mixed Investment Funds (annual platform fee of 0.5%)
Investment Funds managed by BlackRock (annual platform fee of 0.5%)
Prize Savings Account 
Save without feeling it with our award winning AI-powered automatic saving (45p per autosave)
Build wealth yourself and program recurring saves into any account in our new Savings Plans (25p per save)
Get started
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
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.
Zero platform fees
Zero trading fees
Zero withdrawal fees
Additional entries into our Prize Savings Account (TBC)
Stocks & Shares ISA
General investment account with a selection of funds
Access to leading saving accounts
All the investment funds from the basic plan plus: Ethical funds, Commodity funds, thematic funds, Crypto Companies Fund and BlackRock actively managed funds
Unlimited free usage of our AI-powered autosaving and recurring saves
Unlimited withdrawals
Unlimited access to Alternative Assets like whisky, wine and classic car investing
Get started
Chip Wealth
Tax wrappers: General Investment Account, Stocks & Shares ISA, Junior ISA
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 +
More complex investment products, more tax wrappers, managed portfolios, Income Funds and much more
Early access to Alternative Assets like whisky, wine and classic car investing.
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
The ChipX savings account
Coming 2023
Chip Private Banking
Tax wrappers: Everything from the previous tiers
We’re building an invitation-only Private Banking experience. Supercharge your experience with professional account managers, wealth coaching services, and elite rewards programs for our most exclusive tier.
Everything from previous tiers +
Access to an account manager who helps you get the most out of your accounts
Full, unlimited and premier access to every product, tax wrapper and feature Chip offers
Access to exclusive events and talks with high profile investment experts
Metal membership card that unlocks airport lounges, queue jumps at every UK airport, free Uber upgrades… and much more
Coming 2023