I’m interested in what Monzo get’s out of the arrangement with the third party, a slice of the interest before it’s passed onto us or a referral fee etc.
Although a lot of you may be disappointed in the minimum amount… This is the first step in their vision for a marketplace where you’ll be able to choose what savings account you want to seamlessly link into Monzo.
Great first step guys! Looking forward to a lot more choice in the future 
I’m not sure why everyone is being so down on Monzo here. The initial problem they were presented with was that a number of people with significant savings were reluctant to move them to Monzo where they’d essentially see the savings lose value due to inflation. They’ve come up with a decent solution to solve this problem in the interim.
Using a partner bank means that Monzo don’t have to suddenly hire a load of fund managers (who might turn out to be inept) and they don’t have to take on the investment risk for an immature product.
The £1000 limit is simply a technical limit that I’m sure can be easily removed or worked around in the future (Monzo could even just pay the interest on up to £1000 themselves). As for using a partner bank, once Monzo are ready to stop doing this (if they choose to go down that bank), they can simply withdraw the money and reinvest it themselves elsewhere.
People are criticising Monzo for giving the money to a partner but what do they think Monzo would do with the money themselves? Monzo would likely invest it in a number of funds, i.e. give the money to one or more partners. The only difference is that putting the money with a partner bank guarantees the return.
The obvious proper answer to this issue (where it seems that one size will never fit all), is to let them get on with building the marketplace, so people can choose their own savings products for pots.
I think we need to separate the ability to save money from the ability to earn interest on said savings. People with an inability to save much money then interest on said savings is going to amount to very little anyway. As an example, the compound interest of saving £10 a month for 12 months @ a rate of 1% (as a realistic example rate) is £0.65.
Now I don’t think 65p would encourage most people to save. So I do think we need to put a little perspective on things.
And we shouldn’t forget that Monzo has already made it easy for people to save with purchase roundups and access to pots. I see this as being the encouragement to save on the small scale, but the interest on pots is about bigger scale saving and getting capital into the business which more of is needed as the business grows.
[Edit: I forgot to add the Monzo has also made it easier for people excluded from traditional banks from actually gaining access to a bank account]
I don’t think anybody is criticising Monzo for using a partner bank; I’m certainly not. I’m just interested in the thinking and decisions behind this. Monzo can manage the money however they see fit. Raising a question doesn’t make it criticism.
I just hope it’s not another pathetic <inflation interest rate.
It’ll be a standard bank offering so as good (or pathetic) as any other standard bank offering (i.e. entirely dependant on your personal opinion).
How do you see it as more complex? Third party concerns aside (although the FSCS guarantee would be enough to assure me), why would you want the hassle of opening / managing an account with a different provider when you could manage it all through the Monzo interface via Pots?
I have this “challenge” today via a Tesco savings account and whilst the overhead isn’t excessive, if I could attract a decent interest rate and manage my savings through the same interface as my primary account, I would see it as an advantage / less complex.
Minimum withdrawal amount £500? Ouch.
Presumably higher interest rate would mandate longer term commit and / or other concessions that make it less attractive in some way(s). I’d actually quite like a simple interface that gave me a slider for interest with the associated restrictions visible as I moved it around - it would certainly beat comparing tables of account options as you currently have to do in many other places. In effect, multiple different accounts options but presented through a single “savings” settings section - sounds much more Monzo like 
Hoping that interest is going to be paid monthly and will be available in joint pots!
I’d be happy with Joint Pots full stop! 
Oh me too! That’s all I really now and then Monzo can stop building new things and refine the existing 
Clueless person here. Does the £1000 just trigger the interest element, and then interest is paid on the £1000. Or does it mean that if you have £1100, you’ll only getting interest on £100 (value over £1000)?
It depends on the bank they use, presumably £1000 to open the ‘pot’. Interest is then paid on the lot.
Perhaps we could have syndicates to push the total over 1k so everyone can get interest!
For me it will depend who the partner bank is; if it isn’t someone I would bank with directly, that will be a showstopper for me.
Most interesting would be if Monzo partners with a bank I would like to bank with that offers a good rate of interest, but that I wouldn’t usually have the ability (judge ability how you will) to open such an account myself.
Maybe they get to use their bank for recieving foreign payments? Second time in a press release Monzo’s spoke of the complexities of transfering and tracking money…NatWest and Monzo - new best mates… Hmmm
@anon14294927 It’s more complex technically (the behind the scenes workings). Unnecessarily so, as I don’t see this as a function that a bank should be palming off to another bank.
I would want to manage my savings (with interest) within pots, but as has already been mentioned in this thread, not everybody can afford to have £1000 knocking around, and worse still, £1000 before you earn any kind of interest? Makes it a useless feature for most really.
Appreciate your challenge, but in fairness, with faster payments, it’s not really so much of a challenge anymore (so long as your chosen savings account has that feature), and the ability to earn interest on a sub £1000 is important to many. Placing that overhead immediately demotivates those who would like to save, as often they simply don’t have that kind of money available to them. Yes they might “if they saved up”, but then you’re back to motivating the original save in the first place.
While @Chris_R does have a point, the problem here is that for those who don’t have much money, there has to be incentive/motivation to save anyway. In this instance it’s simply a case of more benefits for those who have, which puts you back into the problem with the elitist banking industry anyway. Monzo (to my understanding) is about making banking accessible, highlighted with the introduction of the accounts for 16 & 17 year olds. Having a restriction of £1000 in place before you can earn interest makes this an inaccessible product to many.
I’m interested in how this works contractually.
Are the partner savings accounts raised in our name? Do they appear on our financial history / searches? Do we have access to interface with them directly etc.
Clearly a lot of speculation at the moment and I’ve no doubt the answers will come up in due course… looking forward to the announcement!
Kelvin