There are certainly some neat ways to go about saving without realising it.
But if the £1,000 is an issue for people, the interest rate is kind of irrelevant.
If the £1,000 entry point doesn’t exist… Any interest on balances below £1,000 would barely be noticeable anyway.
Unless of course Monzo drop a 5% interest rate and call it a day 
That. Nigh-on instant notification on transactions as well.
But 0.25% over £2000?
I agree interest below £1000 wouldn’t change any lives whether its at 0.5% or 1.5% or indeed 5% - however I wouldn’t have thought you could “save” £600 + a year on the “penny challenge” 
I think that’s my point - There are some nice ways to go about saving, using the various tools Monzo offer, and the IFTTT integrations.
The only people who will see a difference (a real difference, not simply pennies), with a Pot that accrues interest, are those who have a shed load of money anyway… and they are likely to keep that money elsewhere regardless of what rate Monzo has.
I may be wrong of course, but I wonder if people realise just how little money they will get from this new interest pot.
I have friends that won’t move to monzo because for some reason earning £5 a year at a legacy bank is worth staying around for. 
I find this sort of argument oddly regressive.
If someone offers me 1% interest or 0% and everything else is equal why would anyone even think about which option to choose, even if they’re only getting a couple of pennies in interest?
I think the key thing is to price in functionality. I’m happy with 0% interest as the cost of the using the service as Monzo works much better for me than competitors. But if that were to change and someone offered the same functionality (and other stuff I care about) then I’d prefer interest on my balance, even if it is just pence.
Wouldn’t everyone?
My use case would be this.
Due to budgeting on YNAB, for yearly purchases, such as insurance, I put aside X/12 per month.
Now I could move it to an external bank, which has interest, so my money does something whilst waiting for the payment to be due, but I would much prefer to put it in a Monzo pot, for ease of transfer.
So if Monzo starts offering interest, I would put all this money (around £200 per month) into a pot, so it would be doing something whilst sitting around
I think a lot of people using the likes of Monzo and Starling will see a difference - its not really about interest is it when the rates are so pitiful, its about changing your personal financial behaviour , the people with loads of money as you say will have their money elsewhere , the people that have had, or are having difficulty managing their money will be the ones that benefit hopefully when at the end of the year they can see they have lived , know where their money has gone , hopefully for the first time in their lives saved a hundred or a couple of hundred or a couple of thousand without actually noticing how they have saved it
For me, this is less about interest on a current account and more about getting the model for the marketplace right. It’s looking like a deep integration, so having set the wrong expectations aside, it’s super important they get this one right.
I completely agree - But I’m not sure where interest plays a part in this? As others have said, they have used Monzo exclusively, and saved far more from the budgeting features etc, than from any interest they would have received elsewhere.
Do you think the “interest bearing Pot”, will be part of the marketplace?
Perhaps my opinions are skewed, but I’d always imagined the marketplace to be a very obvious 3rd party integration - One where the customer is aware what 3rd party service they are using.
The assumption I’ve always made with this interest Pot, is the customer will have no idea their money is not with Monzo, and it’ll just be completely seamless (in that you would put money in a Pot as normal, but it happens to gain interest).
Couldn’t agree more mate.
Botch this up and they could set back the companys main goal months and $$ as well as reputation to 3rd parties.
I assumed they would. Have to agree to the savings providers T&cs
I’m sure there will be a very small amount of friction (T’s and C’s etc), but if it’s much more than that, you may as well just sign up with the bank that is holding the money anyway.
This (IMO), is a problem Starling have with their marketplace.
There is currently zero incentive to sign up to services through Starling, if anything, it can make it more of a hassle.
Would be great if you could sweep interest earned away into a pot automagically.
In some ways that would be great, but on the other hand, it would stop earning interest!
Interesting question.
I’m reading the tea leaves here, so take this with a pinch of salt (or milk with one sugar), but the early signs that Monzo was aiming for a list from which users simply picked their products has been, I suspect, been overtaken by events and evidence.
I think that early trials may have shown that users want a more ‘legacy’ experience than Monzo (and I) might have initially wanted. By that, I mean what appear to financial products available directly by Monzo (or their partners) in a way that is more or less invisible to the user.
I suspect that the market for commoditised financial services isn’t ready yet. And it may never be as the incumbents double down on the cross selling model and seek to prevent the digital challengers getting a foothold.
I think this all points to, in the short term, a smaller range of very tightly integrated products - the first of which we’ll hopefully see very soon. In the medium term, I imagine we’ll see some competition between providers - probably the use of more sophisticated recommendation engines using the data that Monzo holds to guide you to the best deal for, say, utilities. And, hopefully, in the long term, products like Monzo will become the front end for a range of commodity services that the user can either choose, or more hopefully, automatically on the basis of data.
This is all my own observation and extrapolation, so may be wildly off. But I’m super keen to see what comes out of Monzo and partners!
tl;dr
Monzo are going to choose a select few companies to form partnerships and tightly controlled integrations with before scaling up. 
As a concept this goes beyond financial products. I think that that a number of the key industries, of which Energy is a great example, don’t yet have the processes in place to facilitate the full marketplace that Monzo envisage. In the utilities space, for example, this means faster switching in place at most providers and a huge uptake in smart meters as a minimum.
Monzo need to have a platform ready for when their vision is possible and I applaud them taking the time to build a solid and reusable model in these early days.
I wouldn’t save £1000 before putting it in to a savings account I’d rather save up in a savings account to build up my £1000 maybe for a holiday and gain interest whilst saving for it but never will I hand over £1000 to start a savings account off as min balance is £1000 it’s not something many will take up unless your the rich in society where £1000 in interest is pocket money and high balances are the norm