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Chip launches Prize Savings Account, raises account fees

Chip has launched the Prize Savings Account, which will payout more than £10k in prizes each month, as it also raises the fees on some of its accounts saying it has to "review" costs and charges.

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C-Suite Simon Rabin, Alex Latham, Sharon Miles, Tom Evans/Chip.

Chip is swapping interest rates for prizes, as it looks to lure more savers to its platform, with a new type of savings account.

Chip has launched the Prize Savings Account, which will pay out more than £10k in prizes each month.

The account is based on Premium Bonds, a popular financial product in the UK.

The move comes as Chip raises the fees on some of its accounts, saying “like many businesses right now, we need to review our costs and charges”.

The Prize Savings Account was explained in a LinkedIn blog post by Chip chief marketing officer and co-founder Alex Latham.

Latham said: “‪To a lot of people (arguably myself included) interest rates don't motivate people enough to save. 

“So we wanted to design a savings account that was truly exciting. A savings account that would motivate a generation to rethink saving.”‬‬ Chip will run a monthly prize draw and will pay out over 10k in prizes each month, with one big prize of £10k and 250 smaller prizes of £10 to be won.‬ Users of the account will be entered into the draw as long as they have £100 in the account, with every £10 getting users one entry into the draw. Withdrawals are  “near-instantaneous” and the prizes will be shown in the Chip app which can be seen within a week of the draw each month.‬ The easy-access account, which is powered by ClearBank, doesn’t bear interest and requires a minimum despot of £1 with £85,000 the maximum held‬. ‬Latham added: “‪This product is fintech at its best. Looking at a user problem and thinking how we can use better technology and good UX to solve it.”‬‬ Separately, Chip is upping fees on some of its accounts.

It is raising subscription fees on its premium membership account ChipX, coming into effect from October 12.‬

Fees are increasing from £3 per 28 days to £4.99 per 28 days, but Chip says it is removing the platform fee, which currently stands at 0.25 per cent a year.

Additionally, Chip is also introducing “fair usage fees” to its standard Chip free plan. Fees will be up to 45p per auto save and up to 25p per recurring save.

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