The ceramicchips will work inside your water butt to reduce algae and smelly water. We also have another product called WaterButt Fresh which will do the same thing. This is a liquid that you add to your water butt on a regular basis.
Personally I wouldn’t use the water from your water butt on your seedlings. Any collected water will pose a risk of damping off disease on your seedlings and it is recommended that tap water is used for these. I
would use the collected rainwater on more established plants and pots. It would be a good idea to empty the butt, clean it and then start again using one of the aforementioned treatments to keep your water fresh.
I hope that helps. Please let me know if you require any further assistance.