Chip’s £10k Prize Savings Account: Is it worth it? – Be Clever With Your Cash

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You would win as much as £10k every month.

Financial savings and investing app Chip provides a couple of financial savings accounts, together with one which’s usually on the prime of the speed tables for simple entry financial savings. However there’s additionally one other that gives the prospect to win prizes quite than earn curiosity.

They’re promoting it as a substitute for Premium Bonds, so is it price a punt? Right here’s the way it works and my evaluation.

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What’s the Chip Prize Financial savings Account

Chip has a reasonably respectable historical past in the case of financial savings accounts. There was the preliminary as much as 5% account, adopted later Chip+1 which paid a then market-leading 1.25% and now the Instantaneous Entry at present provides 3.71%.

That is the most recent providing, providing you with the prospect to win a prize quite than earn curiosity. This implies there’s no assure of a return in your financial savings, however there’s a probability of profitable extra.

The excellent news is there’s no tax due on any winnings you may get. Which may attraction to those that have gone over their private financial savings allowance and see curiosity gained reduce by tax funds.

What are you able to win?

The prizes on provide are one “Grand Prize” of £10,000 after which varied smaller prizes. When it began in Autumn 2022, there have been simply 250 additional prizes of £10.

That’s continued to develop, and for Could 2023 the variety of prizes has doubled from April’s degree of 1,301. so there’s now a complete prizes fund worth of £52,500 throughout 2,651 prizes. It’s damaged down as follows:

1 grand prize of £10,000 50 prizes of £100 each100 prizes of £50 each500 prizes of £25 each2,000 prizes of £10 every

And you can win a couple of. Every entry into the draw (extra on this under) can win a prize. However after all you can additionally win nothing in any respect.

The way it works

Opening the account

First up, it is advisable to have an account with Chip. That is app-only and fast to arrange. So long as you don’t go for the Chip X membership tier or activate autosaving, it gained’t price you something.

The financial savings account itself is definitely with ClearBank – however that gained’t make any distinction to you as you open and handle it by way of the Chip app. You’ll need to conform to the phrases and circumstances. As soon as it’s arrange, you’re good to start out transferring cash into it.

You do must be over 18 and a UK resident to open the account.

Getting into the draw

To enter the Chip Prize Financial savings account it is advisable to have a mean steadiness of a minimum of £100 saved within the account throughout the calendar month.

For each £10 (on common) you’ve saved you get an entry into the following prize draw. So a £100 common steadiness would imply 10 entries.

Essentially the most you’ll be able to add is £85,000, which is probably the most protected by the Monetary Providers Compensation Scheme (FSCS). By the way the cash is definitely held with ClearBank, so be sure you don’t produce other financial savings held with them that would take you over that safety restrict.

The common steadiness for the account at 11:59pm on the final day of the month dictates what number of entries you’ll have within the draw the following month.

You may add cash from different Chip accounts, by way of a related debit card, via Apple pay or instantaneous deposits from financial institution accounts. The cardboard and present account must be from the identical financial institution.

There’s no cost to enter the draw – although as I’ll come again to later there’ll could also be charges for withdrawing your cash.

How the winners are chosen

The draw is month-to-month, nevertheless it’s not proper at the beginning of the month. It’ll happen inside every week, so by the 7 of every month on the newest.

It’s all random, and what number of entries you’ve gained’t impression your probabilities of profitable a prize, although clearly the extra entries you’ve the extra doubtless it’s you’ll win one thing simpy as a result of you’ve extra entries.

Claiming your prizes

When you’re fortunate sufficient to win, you’ll be notified by electronic mail. The cash shall be paid into your Prize Financial savings Account inside seven working days of the draw. Nevertheless, it gained’t be lined by the FSCS safety and it gained’t depend in direction of entries in future attracts.

To withdraw the money you’ll have to withdraw your whole steadiness. So when you’ve got saved £1,000 and win £10,000, you’ll have to take out the entire £11,000. That’s much less of a chore for giant quantities, nevertheless it’s a ache in the event you simply need to get a £10 prize out.

Prize withdrawals ought to take only a few minutes, however permit for as much as two hours.

The way it compares to different financial savings accounts?

There’s no curiosity paid with this account, so in the event you don’t win a prize you’ll earn nothing in any respect.

I’d love to match your possibilities to the very best purchase instantaneous entry accounts, however Chip doesn’t provide a prize fee.

For curiosity paying accounts, on the time of writing, Chip’s Instantaneous Entry account itself is on the prime, with a 3.71% fee. So for £1,000 saved for a 12 months you’d earn £37.10.

I’d think about that it’s unlikely you’ll get near these returns with Chip. A grand saved in Chip’s Prize Draw account (on common) would provide you with 100 entries. So that you’d have to win 4 plenty of £10, two plenty of £25 or one lot of £50 (or a combination) to do higher.

Conclusion: Is it a superb place to your financial savings

Andy’s Evaluation

Personally I’d not maintain money in Chip’s Prize Saving Account for any lengthy durations. Sure you may win some cash, however regardless of a big improve in what number of prizes there are, your chances are high slim. And in the event you do win it’ll doubtless be only a tenner.

I feel it’s higher to get the very best potential fee you’ll be able to elsewhere – right here’s my record of the highest paying accounts. These will give assured cash paid in your financial savings each month.

And in the event you’re in a state of affairs the place you’re seeing the actual returns from financial savings hit by tax, I’d look first at Premium Bonds. Although there’s nonetheless a superb probability you gained’t win with these, there’s a printed prize fee that offers you a sign of what you can get.