Skip to content Skip to footer

Automatic Savings Apps – choose the best one for you

Do you struggle to save? Then automatic savings apps can help you save money quickly and easily. Essentially, these savings apps use cleaver tech to analyse your spending. They use this information to calculate how much you could save. Then, they syphon off small amounts automatically on a regular basis to help you build a larger savings pot.

Automatic savings apps promise to help you start saving without really noticing. Anything that can help people save money easily gets our interest raised. We’re going to analyse how they work and which one could be best for you. 

Heads up – We aim to produce honest and accurate content, however, we are not financial advisors. If you need financial advice, Unbiased can connect you with a suitable professional for free. Some of our links may earn us a small commission to help us run the site.

Top automatic savings apps

If you are here for the best automatic savings app, here are our top picks:

Ease of Use: Plum

For us, Plum offers the easiest interface. Plus, it’s one of the most mature automatic savings apps available and offers a wide range of services. Even the free basic account offers automatic savings, roundups and unlimited withdrawals.  Also, your money is protected under the FSCS and you’ll get an alert if Plum thinks you’re spending too much on your bills.

Sign up to Plum for free today

Best Interest Rate: Chip

If you are simply looking for the best interest rate, then Chip leads the pack by a long way. Currently, you can earn 0.70% on your savings and it’s protected under the FSCS up to £85,000. You can get the best interest rate with the ChipLite plan.

Sign up for Chip for free today

What are automatic savings apps?

Many people struggle to save money. Automatic savings apps aim to help make saving easier. They do this by filtering off small amounts of money on a regular basis. As a result, this can help you build a regular savings habit with minimal effort.

Essentially, automatic savings apps work out how much you could save by looking through your bank statements. This is done automatically by granting the apps access to your bank records. Don’t worry, this is all done securely through modern open banking standards.

Handily, if you really don’t have any spare cash to save, you can pause this feature at any time.

How are savings made?

Automatic savings apps typically use two principle to collect money:

1. Round-ups – every time you spend money, the app rounds the transaction up to the nearest pound. The round-up is then deposited in your automatic savings app.

2.Affordability analysis – the app will review your spending and withdraw a small amount each week. Usually, you can control how aggressive the app behaves to increase your savings as required.

SIGN UP - IT'S FREE!

Get your FREE financial guides, plus useful updates and exclusives to grow your personal wealth.

Invest as well as save

Some automatic savings apps also let you invest your savings. This can be useful if you have already built an Emergency Fund. However, if you have relatively little saved, it is considered best to keep some cash on hand.

As a general rule of thumb, you should aim to keep around three to six months of expenses in an easy to access account. This is called an Emergency Fund and it’s designed to ensure you can weather a financial storm.

Learn more: Emergency Funds – how much is enough?

In fact, using the automatic savings app, Moneybox, is exactly how my co-author Mike got into investing. For him, it provided a light bulb moment that inspired his investing journey. You can read more about how Mike got started in our Moneybox review.

Read more: Moneybox – how I saved an epic £1500 without trying

If you’d like to learn more about investing, then check out our Beginners Guide to Investing. It covers everything you need to get started. Crucially, you’ll learn what you need to do before you start investing and the mistakes we’ve made, so you don’t do the same.

Are automatic savings apps safe?

By default, you should check that your automatic savings app is protected by the Financial Services Compensation Scheme (FSCS). All the apps we have listed in the article are covered under the FSCS. Crucially, this provides you with protection for up to £85,000.

This means if your automatic savings app provider fails for any reason, your money is safe.

Remember, any money held in investments is still subject to market fluctuations and any losses incurred are not protected. That means your investments can drop in value as well as go up.

Financial Fitness Guide - get part one FREE!

Subscribe now and get your FREE part one of the Financial Fitness Programme, designed to grow your personal wealth, reduce your money worries and give you more time.

How do automatic savings apps access my bank account?

Fundamentally, automatic savings apps require access to your current account to assess your spending. The apps use the relatively new concept of Open Banking. This new system allows third parties to connect to your accounts, as long as you grant them access. This access can be revoked at any time and approval will be periodically checked.

Each app and bank need to work together to approve the app to function for the bank’s customers. This means you will need to double-check your chosen app will work with your current account.

Plus, each app provider will require a special licence from the Financial Conduct Authority (FCA) to use Open Banking standards. This ensures a base-level of security is enforced to protect your money.

Automatic savings apps - interest rates

Heads up: automatic savings account don’t usually pay the highest savings rate. But that’s OK because firstmost and foremost, they are designed to help you build a savings habit.

In fact, interest rates matter very little when your savings are relatively low. For example, the current top easy-access savings rate is just 0.75%. If you had £1,000 saved, then you’d earn just £7.50 per year. That’s only just over 60p per month!

Furthermore, I’d argue that training yourself to start a savings habit is worth it even without earning any interest. Only Once you’ve built a good habit, is it then worth focussing on better returns.

We’ve compared the most popular automatic savings apps below:

FREE Financial Independence Guide!

Subscribe now and get your FREE Financial Independence Guide. Includes everything you needed to know about building your financial freedom.

Automatic savings apps compared

Features Cost Interest Rate Minimum deposit FSCS Protection Investing
Chip Round ups, autosave, payday Free 0.70% £1 Yes Optional
Moneybox Round ups, autosave Free 0.47% £1 Yes Optional
Plum Round ups, autosave, weekly, challenges, payday Free 0.25% £1 Yes Optional

Check out our automatic savings apps reviews:

Chip vs Moneybox vs Plum

Interestingly, all three work in slightly different ways. However, they mainly fulfil the same purpose. Each has an option to either keep your savings in cash or the opportunity to invest.

Additionally, each offer account upgrades where you can pay for additional services. The upgraded accounts usually offer some really cool features, However, you have to weigh up the cost of the account versus the value.

If you want to invest your cash, this will come at a cost. Each provider requires you to subscribe to one of the paid accounts to access investing services.

Summary

Essentially, automatic savings apps can offer a very cost-effective way to start saving with minimal time and effort. Personally, I like that they automatically take your money out of your current account. It adds a little resistance when it comes to spending that cash. This can really help those who struggle to save by hiding their money away before they get a chance to spend it.

And the paid accounts offer some great features, However, for those who are struggling with cash, I think the cost would be hard to justify. But if you’ve already built a savings habit, these accounts can help push you to the next level and maximise your savings. Just remember that when you’ve built a decent pot, review the fees accordingly.

If you are looking at getting into investing, these accounts can be a great gateway to help you get started. They are simple to use and take care of all the complexity for you. I’d say these would be great for your first £500-£1,000. Beyond this point, it’s worth considering a robo-advisor.

Learn more: what is the best robo-advisor platform in the UK.

If you still have questions, please come join our supportive UK Personal Finance club on Facebook. You will find other like-minded individuals. It’s a safe, private community where you can ask questions and learn more about making the most of your money. Best of all, it’s free! I’d love to see you there.

Here’s to Financial Fitness

EatSleepMoney.co.uk does not offer financial advice and is intended for reference/information only. Remember, you should always carry out your own research and/or take specific professional advice before choosing any financial products or services or undertaking any business or financial venture. If you need financial advice Unbiased can connect you with a suitable professional for free. Investments may go up as well as down and you may get back less than you put in.

Discover your Financial Fitness Score - for FREE!

Answer just 17 questions to receive your financial health check score with a tailored action plan.