FSCS protection with savings apps: who actually holds your money?

Who actually holds your money?

With most savings apps, a partner bank holds your savings, not the app. The Financial Services Compensation Scheme protects deposits at UK-authorised banks, so your protection depends on which bank that is, and how much else you have there.

The FSCS is the UK’s safety net for when a bank, building society or credit union fails. Its page on bank deposits says it will “automatically compensate you up to £120,000 per eligible person, per bank, building society or credit union”, and that it pays within seven working days. The limit rose to £120,000 on 1 December 2025.

That protection is attached to the bank. A savings app is usually a different kind of firm: a technology company with a regulatory permission that lets it arrange accounts or handle payments for you. Understanding that difference is most of what you need to know.

Savings apps vs banks

Some providers on our list are banks themselves. Monzo and Chase hold your savings directly: Monzo lists its protection as “Yes, up to £120,000 per person (Monzo Bank)”, and Chase as “Yes, up to £120,000 (Chase)”. If you save with a bank, the bank is the one that counts for FSCS purposes.

Most savings apps work differently. They provide the app, the automation and the customer service, and place your money with one or more partner banks. Chip, Plum and Moneybox all work this way. Plum lists its partner banks as “Easy Access: Lloyds Bank PLC. Cash ISA: Citibank and Lloyds Bank”, and Moneybox describes “A panel of banks, including Lloyds, Bank of Scotland and Santander”. Each partner bank has its own separate FSCS limit.

A third group uses a mix. Trading 212 describes where its cash goes as “Banks including Barclays, NatWest and J.P. Morgan Chase, plus money market funds”, and its protection is listed as “Partly: up to £120,000 per bank on cash held with banks”, with the note: “Money placed in a QMMF is treated as an investment, not a bank deposit, and does not get deposit protection”. Our Chip vs Trading 212 comparison goes into what that means for its Cash ISA.

The limit is per bank, not per app

The FSCS limit applies once per bank, however many apps or accounts you reach that bank through. If two apps both use the same partner bank, or you also bank there directly, all of that money shares one £120,000 limit.

The FSCS also treats banks in the same group that share a banking licence as one bank. Its guidance says the compensation limit then “applies to the total amount you hold across all these accounts, not to each separate account.” The Financial Services Register shows which brands share a licence.

Here is how that can catch people out. Say you hold £90,000 through a savings app whose partner bank is Bank X, and another £60,000 directly with Bank X. That is £150,000 at one bank, so about £30,000 sits above the limit if Bank X failed. Spread the same money across two unconnected banks and all of it would be within the limit.

Chip as an example

Chip is clear about the structure: Chip is an app, not a bank: your savings are held with partner banks. Most of its savings accounts sit with ClearBank, while the Smart Cash ISA is spread across several banks.

Chip’s Instant Access page spells out the shared limit: “deposits across these accounts and any other accounts held with ClearBank would be eligible for a total of £120,000 of FSCS protection only”. In plain terms: Chip savings are held with ClearBank and eligible deposits are protected by the FSCS up to £120,000 per person, shared across all your money at ClearBank. So if you hold Instant Access, Easy Access and Prize Savings balances with Chip, they all count towards the same ClearBank limit, together with any money you hold at ClearBank through another provider.

The Smart Cash ISA works differently, because Chip places ISA money across a panel of UK banks including Barclays, Lloyds and HSBC. Each of those banks has its own limit, which is shared with anything you hold at that bank or its banking group directly. If you already bank with one of them, it is worth asking Chip how your ISA balance is split. Our Chip Smart Cash ISA page covers the account itself, and is Chip safe? goes through Chip’s regulation and protection in more depth.

What is not covered

Not every balance you see in an app is an FSCS-protected deposit. Three things to watch for:

• Bonuses. Chip’s Group Terms say bonuses are not FSCS protected. That applies to things like the referral bonus explained on our Chip referral code page until it is paid out as ordinary money.
• Prizes. Chip says prizes are added as a bonus and become cash only when you withdraw your whole Prize Savings balance, and its Prize Savings page says prizes are “not eligible for entry calculation or FSCS protection”. The deposits you put into Prize Savings are held at ClearBank. Our Chip Prize Savings page explains how that works in practice, and the comparison with Premium Bonds covers NS&I’s different, Treasury-backed model.
• Funds and investments. Money market funds and investment accounts are not bank deposits. Trading 212’s note on its interest-paying cash is an example. Investments have their own, different FSCS rules, and with investments your capital is at risk.

E-money safeguarding vs FSCS deposits

Some apps hold part of your money as electronic money, or e-money, before or instead of placing it with a bank. E-money is not a deposit, and it is not protected by the FSCS. E-money firms must instead safeguard customer money: keep it separate from their own funds, usually in a segregated account at a bank, so it can be returned to customers if the firm fails.

Safeguarding is real protection, but it is not the same. There is no fixed compensation amount, the money comes back through an insolvency process rather than an automatic FSCS payment, and that can take longer. Plum is an example of an app that is open about the split: its protection notes read: “The limit includes money you hold directly with Lloyds. Plum's main e-money balance is safeguarded, not FSCS-protected”.

Chip’s main company, Chip Financial Group Ltd, is on the FCA register as FRN 911255, authorised under the Payment Services Regulations 2017. Its savings accounts themselves sit with the partner banks listed above. The general rule for any app: money in a named savings account at a partner bank is a deposit; money sitting in an app “wallet” or main balance may be e-money. Look for the word “safeguarded” in the app’s protection page.

Is saving through an app riskier than a bank?

For the money itself, not necessarily. If an app places your savings in a named account at a UK-authorised bank, the deposit has the same FSCS protection as if you had opened it at that bank directly. The bank failing is what triggers compensation, and the FSCS says it pays within seven working days of a bank failing, automatically.

The extra thing to think about is the app itself. If the app firm failed but its partner bank did not, your savings should still be at the bank. Getting access to them could take time while an administrator works out who owns what, because you normally reach the money through the app. That is an inconvenience risk rather than a loss risk, but it is a real one if you might need the money quickly.

So the honest answer is that an app adds a layer. Some people are happy with that in exchange for features like autosave or prize draws; others prefer to keep their emergency fund directly with a bank. Our Chip vs Monzo comparison looks at that trade-off between an app and a bank you may already use.

Joint accounts and other edge cases

• Joint accounts. The FSCS says joint accounts are protected up to the same limit per eligible person, so a joint account held by two people is covered up to twice the limit in total, shared with each person’s other money at that bank.
• Temporary high balances. Covered as above, for six months, but you need to apply.
• Savings platforms. Some services spread your money across several banks for you. The FSCS covers these on its bank deposits page, and the per-bank limit still matters, so check which banks they use and what else you hold there.
• NS&I. National Savings and Investments is not covered by the FSCS because it is backed by HM Treasury instead.

How to check your own cover

1. Find the bank behind each account. Every app should name it on its protection or product pages, or in the account terms.
2. Check the bank is UK-authorised. The FSCS says your provider must be authorised by the Prudential Regulation Authority, which you can check on the Financial Services Register. The register also shows which brands share a licence.
3. Add up what you hold at each bank. Include money held directly and through every app. Use the FSCS’s own protection checker if you are unsure.
4. Separate deposits from everything else. Bonuses, prizes, e-money balances and funds may not count.
5. Spread larger sums. If you are close to £120,000 at one bank, using a provider with a different partner bank keeps everything within the limit.

For which bank each app we cover uses, see the protection row in our best savings apps comparison.