Limiting risk, Loving reward…
This Xplainer, the second in our new series, is aimed at ChipMunks who want to know a little bit more detail about the measures in place to protect your ChipX savings. Capital at Risk, to some people, is a scary phrase. We understand that. So here at Chip HQ, Simon, Shiv and the other brains behind ChipX have done a lot of thinking into how we can limit the risk and boost your reward from our returns engine. I’m going to run through 3 risk limiting measures we’re taking to ensure your ChipX balance is being deployed wisely, safely and responsibly as you reel in those returns of up to 8%.
1 – Smart Credit is only lent to other Chip savers
That’s right, unlike other risky returns products you’ll find elsewhere, money is not invested in temperamental stocks, shares or placed in any fund outside of the Chip community. Why? As we learnt from Xplainer 1, a key feature of ChipX is Community Lending, which will power Smart Credit - our ethical alternative to overdrafts and payday loans. This Smart Credit will be only be lent to trusted Chip savers. Our data stack from Chip’s intelligent AI understands the borrower’s behaviour. Smart Credit borrowers will have had to demonstrate the ability to save responsibly and repay on time. The saver must have been able to save over £300 with Chip and been a saver for over 3 months for us to consider allowing them to borrow Smart Credit. On top of the Chip check methods, regular credit score checks will also have taken place to ensure your ChipX savings are only powering Smart Credit that will likely be repaid in-full and on-time.
2 – ChipX balance is DIVERSIFIED
A vital risk limiting (and returns maximising) factor with ChipX is that your ChipX balance will be broken down into tiny chunks. Say you move £2000 into ChipX, the money will be diversified down into chunks of no more than £10 each. If, for whatever reason, a borrower defaults a payment and the lent money is not returned, the cost of this will only be the £10 diversified amount. Compare this risk to the potential 8% returns on the rest of your £2000 in ChipX, we think, based on point 1 and 2 combined, our Smart Credit system is truly game-changing, fair and attractive.
3 - You have total control over your ChipX deposits
Like the idea of ChipX, but also want to keep some savings in Chip? No worries. You’ll be able to totally control how much money you move into ChipX account for diversification. This means if you have £500 in Chip with a 2% bonus rate, and you choose to move half of that into your ChipX, you would earn returns of up to 8% on £250 and 2% on the other £250.
By building ChipX in this way we have given the saver the ability to try and test ChipX before they commit more significant amounts of money.
Sneak peek and feedback
Loads of you have been dying to see what ChipX will look and feel like. Our dev team don’t want to give too much away but here’s a preview screen exclusively for the ChipMunks 🙈. Let us know what you think in the comment section below…
As you can see on the phone screen, this saver has £750 in ChipX earning 7.3% returns. This is only Xplainer 2, but as so many ChipMunks have said they are willing and ready to use ChipX, we were wondering how much money you would consider moving into our returns engine. Your feedback here can help us become more transparent with predictions and features moving forward.
This Xplainer outlined three three main methods we have taken to help you love rewards and limit risks. There will be more Xplainers in the coming weeks on the details of becoming a Smart Credit borrower, our data stack has identified a vast number of savers who could benefit from using Smart Credit.
There will also be an Xplainer on further opportunities and incentives we are going to propose to earn lenders the best possible returns from ChipX.
We, as always, would love your feedback, tips and questions on this Xplainer. Please join our Facebook and Slack channels! On there your feedback will help us become the best savings account in the world.
I’m gunna leave it up to you as to which Xplainer you’d like to see next, let me know below.