Industry-titan Hargreaves Lansdown now offers an Active Savings product. Essentially, this product allows you access to savings’ accounts from a range of banks and building societies. You can then mix and match these to get access to the best rates currently available.
The benefit of this is that it saves you time trawling the market and it’s all in one place. However, the catch is that Hargreaves Lansdown takes a cut. So whilst the interest rates may be good (eg, 0.5% at the time of writing), there may be better out there if you’re prepared to go looking.
On the flip side, the Hargreaves Lansdown Active Savings account is also free.
Take all this in to account, then, and there appears to be a sweet spot for each option.
For balances lower than £2,000, Hargreaves Active Savings would net you £10 in annual interest, vs £25 with the Chip Lite account and only £7 for the paid-for Chip+1 account. So purely on interest returns alone without considering the other features, Chip Lite is the winner. However, it has a cap of £2,000 in savings which qualify for the 1.25%.
So, increase the savings pot to £5,000, and Hargreaves Lansdown Active Savings is now returning £25 vs. £44.50 with Chip+1 (even after the fees). So, Chip app wins. But again, there is a cap of £5,000 in savings which qualify for the 1.25%.
Now, let’s scale the savings pot to £10,000. Hargreaves Lansdown Active Savings are returning £50 per year whilst Chip+1 is already maxed out at £44.50.
In summary then, whilst they work a bit differently, Hargreaves Lansdown Active Savings generally works for bigger balances based on interest rates alone. But let’s not forget the other funky features with Chip app which may allow us to save more overall due to the AI and positive saving habits it encourages.