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.
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.
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.
For all savings accounts other than the Chip Savings Account 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).
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.
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.
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.
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: https://seccl.tech/
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 (https://www.fscs.org.uk/what-we-cover/investments/).
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.
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.
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.
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.
Money held in older Chip "e-wallets" is stored as e-money and is not covered by FSCS.
You can no longer deposit into these e-wallets and we strongly encourage all customers with money in an e-wallet to move their balance to one of our savings accounts covered by FSCS.
When we first built Chip we offered an e-wallet powered by Prepaid Financial Services (PFS) to our customers. Until 2020 this was the only account available with Chip, and has had a few names over the years, most recently ‘Chip - Instant Access’. This is how many other fintechs and challenger banks started (Monzo, Revolut etc…) because they’re very easy to set up and grow with.
However, while PFS is authorised by the Financial Conduct Authority, and the money in an e-wallet is safeguarded and never used for lending or business purposes, it’s not covered by the FSCS guarantee and doesn’t pay interest.
Remember your Capital is at Risk and past performance is not a reliable guide to future returns. The value of your investment can go down as well as up and you might get back less than you originally invested.