How we calculate balances 🧮

We’ve got even more Tech Blog posts for everyone to have a read of :eyes: :gear:

Today we’ve just launched a blog from @Basmamataha, who is one of our Backend Engineers within IFS, who has written an in-depth explanation about how we calculate balances at Monzo.

Basma has also offered up some of her time to jump in and answer any questions on the back of the blog contents or general questions about her Monzo world :earth_africa:

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Before I jump in, what’s IFS, please? :pray:

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Internal Finance System squad. We maintain and develop the infrastructure for the finance collective.
Finance collective is the department where we take care of all thing related to “Money” name it reporting, accounting related stuff and statements.

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Resistance is futile.

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Does the above edit help? :slight_smile:

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Thank you for the blog post - fascinating stuff!

I’ve always felt that these different balances should be visible somewhere within the app. I had a go at a mock up last year but I do think that it’s a big shame that, to use the blog’s terminology, the interest-chargeable-balance isn’t available in the app anywhere. It’s pretty important as that’s what drives overdraft and interest payments - yet is completely invisible to the user.

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Thank you for your feedback Peter.

I think if you have an arranged overdraft in Monzo then you will find this balance named in the post “interest chargeable” below the “available balance” which is the main one you see for your main account.

If you don’t have arranged overdraft and you’ve gone over limit then it will appear as a negative amount in the main account balance.

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Thank you, but I’m not sure I follow. Are you saying that interest-chargeable is in the app? Where do I find it exactly? (Sorry if I’ve misunderstood - it’s late!)

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Sorry I misinterpreted the answer. No the interest chargeable is not visible in the app.
What I meant is that the balance with arranged/unarranged overdraft is visible.

Interest chargeable is just used in the backend to calculate interest for overdrafts.

Can you please explain more why you think the visibility of this balance to the customer is beneficial?

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Do you really think that needs an explanation?

Interest is a paid-for benefit of plus/premium. I would say it’s pretty prima facie that we should have visibility of the benefits we’re paying for, and therefore the actual balance we will receive interest on.

Practically, this would allow us to fully understand/confirm the amount of interest received from our side. In the same way a full ledger is provided to allow us to confirm our balances, this figure is necessary to confirm the amount of interest owed and earned. Banks and organisations are not infallible and we should have access to this information.

This would also accord with Monzo’s oft-repeated mantra of transparency-first, although this seems to have been fully abandoned at this point(?), a la google dropping its ‘don’t be evil’ motto.

Edit to add that clearly knowing what interest we are paying (as well as receiving) is obviously beneficial for the same reasons.

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It’s very simple. If I’m overdrawn I want to know if I’ll be paying fees on that money or if I need to move money out of pots. Right now I don’t know if I’m actually overdrawn because of pending payments.

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This is interesting. I will ask the team if we have a plan for this in the future.
Thank you again for your feedback!

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Thank you! Always lovely when Monzo folk pop in. :wave:

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